The world’s second largest movie theater chain is in trouble
By Anna Cooban, CNN Business
(CNN) — The owner of Regal Cinemas going through a difficult time — its stock tumbled as much as 80% on Friday after reports that its parent company is set to file for bankruptcy.
British company Cineworld Group has spoken to lawyers from Kirkland & Ellis LLP to advise them on the bankruptcy process in the US and UK, according to a report by the Wall Street Journal.
The stock has recovered slightly, but remains 60% below its price at the start of Friday’s session.
Earlier this week, Cineworld said in a press release that despite a “gradual recovery in demand” since last spring, admissions were below expectations.
The company accused a limited list of movies for the lack of moviegoers, a situation which should continue until the end of November.
The chain, which owns more than 500 movie theaters across the United States, is considering how to reduce its debt, which it says would “likely result in a very significant dilution of existing holdings” for shareholders.
Cineworld has struggled to stay afloat during the pandemic, when it was forced to close its movie theaters around the world. It suffered a loss of $2.7 billion in 2020 and $566 million in 2021.
It’s a similar story for other movie theaters. So far this year, US box office revenues are nearly 30% lower than before the pandemic, according to Comscore despite a strong rebounda media data company.
Cineworld declined to comment to CNN Business on reports that it was considering filing for bankruptcy. Kirkland & Ellis LLP did not immediately respond to CNN Business’ request for comment.
— Frank Pallotta contributed reporting.
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