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Wall Street Journal: Cineworld, Owner of Regal Cinemas, is Expected to File for Bankruptcy

posted on by Adriana Hazra
Company is expected to file Chapter 11 petition in U.S; is considering filing for insolvency in U.K.

The Wall Street Journal reported on Friday that the Cineworld, owner of Regal Cinemas, has met with lawyers from Kirkland & Ellis LLP and consultants from AlixPartners for advice on the bankruptcy process. According to the news outlet, the company is expected to file a Chapter 11 petition in the United States and is considering filing for insolvency in the United Kingdom.

According to Reuters, the company's share prices dropped by 81% after the announcement.

Indiewire reported that the company issued a statement announcing it is filing the petition “due to a limited film slate that is anticipated to continue until November 2022 and [is] expected to negatively impact trading and the group's liquidity position in the near term. Any deleveraging transaction will likely result in very significant dilution of existing equity interests in Cineworld.”

Entertainment news source Variety reported on Monday that Cineworld has made a statement regarding its earlier announcement, letting patrons and employees know that its theaters will remain open for business. The company stated, "Cineworld would expect to maintain its operations in the ordinary course until and following any filing and ultimately to continue its business over the longer term with no significant impact upon its employees.”

Cineworld reportedly had a net debt of approximately US$5 billion by the end of 2021. The company had secured US$200 million of incremental loans in July 2021.

Regal is the second-largest theater chain in the United States, while Cineworld is the largest theater chain in the United Kingdom and second-largest in the world (when combined with Regal and other national brands it owns).

Cineworld was founded in 1995 and it acquired Regal chain in 2018. The company's performance is still below pandemic levels.

Sources: Wall Street Journal (Alexander Gladstone), Indiwire (Samantha Bergeson), Variety (Naman Ramachandran)


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