Cineworld is preparing to file for bankruptcy “within weeks,” putting around 100 cinemas in the UK at risk of closure, according to reports.
Shares in the cinema chain dived by two-thirds within minutes of the news in the Wall Street Journal saying the world’s second biggest cinema business has hired lawyers and consultants to advise the bankruptcy process. It comes two days after Cineworld said it is assessing options to shore up its finances after it blamed a “limited” film slate for weak audience numbers in recent months.
The company, which also owns the Picturehouse chain in the UK and Regal Cinemas in the US, had pinned its hopes on releases such as Top Gun: Maverick, The Batman and Thor: Love and Thunder to aid its recovery from the heavy impact of the pandemic. However, it told the London Stock Exchange on Wednesday: “Despite a gradual recovery of demand since reopening in April 2021, recent admission levels have been below expectations.
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“These lower levels of admissions are due to a limited film slate that is anticipated to continue until November 2022 and are expected to negatively impact trading and the group’s liquidity position in the near term.”
The business, which was saddled with $4.8 billion (£4 billion) of debt at the end of the last financial year, said it was considering restructuring its balance sheet to protect its future. Cineworld has declined to comment.
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