The debt-riddled Regal Cinemas owner Cineworld Group on Wednesday filed for Chapter 11 bankruptcy in the U.S.
In a statement, the troubled London-based cinema chain said it was setting up “a $1.94 billion debtor-in-possession financing facility from existing lenders which will help ensure Cineworld’s operations continue in the ordinary course while Cineworld implements its reorganisation.” The filing the United States Bankruptcy Court for the Southern District of Texas covers multiple subsidiaries of Cineworld, which operated 505 theaters in the U.S. alone.
That new financing should help the company to keep the doors open at its movie theaters while it seeks “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 company added.
The filing, which has been reviewed by TheWrap, places Cineworld’s assets between $1 billion and $10 billion. Its debts are listed as falling in the $10 billion to $50 billion range. The Bank of New York is the largest debt holder at $213 million.
According to the statement, affiliates and subsidiaries not involved with the U.S., U.K. or Jersey businesses were left out of the filing. The group expects “business as usual” for its global business and cinema operations throughout the Chapter 11 process, meaning there will be no disruption “as much as practicable” where its vendors, suppliers and employees are concerned.
Cineworld says it expects current investors to take a big hit but that it hopes to remain on the London Stock Exchange.
“We have an incredible team across Cineworld laser focused on evolving our business to thrive during the comeback of the cinema industry. The pandemic was an incredibly difficult time for our business, with the enforced closure of cinemas and huge disruption to film schedules that has led us to this point,” 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’.”
Regal’s parent company has been expected to file for bankruptcy since mid-August, when its stock price fell by more than 50 percent after reports of low ticket sales. At the time, a spokesperson for Cineworld told TheWrap that talk of a bankruptcy filing was premature.
Pamela Chelin contributed to this report.