- UK bankruptcy filings possible as well
- Management says operations will continue
London-listed Cineworld (CINE), the second-largest cinema business in the world after AMC (US:AMC), confirmed it is looking at bankruptcy options after revealing last week that shareholders should expect a “significant dilution” of their interests as the company attempts to deal with balance sheet problems and weak trading.
Cineworld’s “restructuring objectives include a possible Chapter 11 filing in the United States and associated ancillary proceedings in other jurisdictions”, the company said in an update after publications including the Wall Street Journal reported on Friday that the business was in discussions with lawyers and consultants over the bankruptcy process.
But the company, which reiterated last week’s dilution warning to shareholders, also said that it expects operations to continue after a filing “and ultimately to continue its business over the longer term”.
Admission levels have been weaker than expected by management, which it pinned in last week’s update on a lack of blockbusters and said this would hit both trading and liquidity. The company has struggled with significant debt levels since before the pandemic, and was fined an eye-watering C$1.23bn (£792mn) by the Ontario Superior Court (a fine Cineworld has appealed) over its withdrawal from a deal to buy Cineplex (CA:CGX).
Half-year results to 30 June are scheduled for 22 September, but investors hoping for a miracle will likely be disappointed. The shares are trading at around 4p, having lost over 98 per cent of their value over the last 5 years.
