Cineworld, the parent company based in the U.K. of Regal Cinemas filed for bankruptcy in the U.S. Cineworld is the second-largest cinema operator, only falling behind AMC entertainment. However, following the COVID-19 lockdown, the acquisition of Regal, and the failed acquisition of a Canadian movie chain, Cineworld buckled under the debt it accrued.
CEO Mooky Greidinger said that the pandemic was incredibly difficult for their business as film schedules were disrupted and cinemas throughout the world were forced to remain closed.
Even now, months after the reopening of the theatres, the levels of admission were far lower than expected. This in part was also driven by the limited film releases. These factors have not allowed the industry to recover fast.
The group is now saying that they are hoping to resume their global business and cinemas without much interruption as they anticipate recovering from Chapter 11 during the first quarter of 2023.
The group had also initially warned about the possibility of filing last month when they had said they were examining their restructuring options and looking at a possible voluntary Chapter 11 filing in the U.S.A.
This bankruptcy filing will allow Cineworld greater liquidity, and it relates to commitments of approximately $1.94 billion debtor-in-possession financing facility from existing lenders.
As part of their restructuring, Cineworld will also try to negotiate better lease terms with U.S. landlords for their cinemas.
The news of Cineworld’s bankruptcy has led to many questions about AMC entertainment. AMC CEO Adam Aron has specified however that the situation is fundamentally different as AMC has “Ape” investors that own a large part of the business.