September 7, 2022
Regal Cinemas owner Cineworld Group Sept. 7 announced it had filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court for the Southern District of Texas. Cineworld is the No. 2 theatrical distributor, operating in 10 countries, including the U.S. and the U.K. with 747 sites and 9,139 screens globally.
Through the filing, Cineworld, with expected $1.94 billion debtor-in-possession fiscal support of its secured lenders, will seek to implement a de-leveraging transaction that could significantly reduce its debt, strengthen its balance sheet and provide the financial flexibility to accelerate ongoing operations.
Regal will continue business as normal during the bankruptcy proceeding, with the intention of paying all vendors and suppliers in full and on normal terms for valid amounts for goods and services received during the Chapter 11 process. In addition, Cineworld expects that employees will continue to receive their usual wages and benefits without interruption.
It is expected that any de-leveraging transaction will result in very significant dilution of existing equity interests in Cineworld and there is no guarantee of any recovery for holders of existing equity interests. The company does not expect the filing to result in a suspension of trading in its shares on the London Stock Exchange.
Cineworld anticipates emerging from Chapter 11 during the first quarter of 2023 and contends a comprehensive financial restructuring is in the best interests of the company and stakeholders in the long term. As part of its restructuring process, Cineworld expects to engage in collaborative discussions with U.S. landlords to improve its theater lease terms.
“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,” CEO Mooky Greidinger said in a statement.
Greidinger said the filing would allow the company to restructure theatrical operations, including rolling out cutting-edge screen formats and enhancements to existing “flagship” theaters.
“Our goal remains to further accelerate our strategy so we can grow our position as the ‘best place to watch a movie,’” he said.