Embattled UK-based Cineworld Group has confirmed that it has filed for Chapter 11 bankruptcy protection with the United States Bankruptcy Court for the Southern District of Texas.
In a statement, the company said: “Cineworld, with the expected support of its secured lenders, will seek to implement a de-leveraging transaction that will significantly reduce the group’s debt, strengthen its balance sheet and provide the financial strength and flexibility to accelerate, and capitalise on, Cineworld’s strategy in the cinema industry.
“The group has entered Chapter 11 cases with commitments for an approximate $1.94 billion debtor-in-possession (DIP) financing facility from existing lenders, which will help ensure Cineworld’s operations continue in the ordinary course while Cineworld implements its reorganisation.”
The statement adds that the process will impact “entities that are engaged in Cineworld’s US, UK and Jersey businesses; businesses in all other territories remain unaffected.”
Cineworld said the impending restructure will enable it to “pursue a real estate optimisation strategy” in US and that it intends to discuss improving lease terms with landlords.
The exhibitor stressed that it is still “business as usual”, with operations continuing without interruption.
Cineworld said that, if approved by the court, the $1.94 DIP financing will help provide liquidity for Cineworld to pay vendors, suppliers and employee wages, and honour all existing customer membership programs.
Cineworld is based in 10 counties with 747 sites and 9,139 screens, and owns US giant Regal as well as boutique UK chain Picturehouse.
Cineworld’s debt was at $4.84bn in March and the company is facing a massive fine in its ongoing dispute with Canada’s Cineplex, following the abandoned takeover of the company by Cineworld in mid-2020. The company’s share price tumbled after the Wall Street Journal first broke the news that it was considering filing for bankruptcy in August.
Cineworld CEO Mooky Greidinger said: “This latest process is part of our ongoing efforts to strengthen our financial position and is in pursuit of a de-leveraging that will create a more resilient capital structure and effective business. This will allow us to continue to execute our strategy to reimagine the most immersive cinema experiences for our guests through the latest and most cutting- edge screen formats and enhancements to our flagship theatres. Our goal remains to further accelerate our strategy so we can grow our position as the ‘Best Place to Watch a Movie’.”
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