Britain’s Cineworld Group said Wednesday it has filed for bankruptcy protection in the United States as the world’s second-largest cinema chain operator struggles to find other ways to rebuild its indebted balance sheet. did.
The Chapter 11 filing, which allows companies to continue operations and restructure debt, includes Cineworld’s US, UK and Jersey operations.
Regal Cinema owners have repeatedly warned that a deleveraging transaction would result in a significant dilution of their existing equity stake.
While the film industry has struggled to recover from the pandemic, leading to fewer blockbusters, less theater attendance, and a growing popularity of streaming, Cineworld’s specific problems have accumulated over the years. is the amount of debt incurred.
The company took on debt to fund part of its $3.6 billion acquisition of Regal in the U.S. in 2017 and raised more to weather the pandemic. It was poised to merge with Canada’s Cineplex in 2019, but that deal fell apart.
Net debt, including lease liabilities, was $8.9 billion at the end of 2021. Excluding lease liabilities, net debt was $4.84 billion at that time. The company’s market value was just $62 million at Tuesday’s close.
Cineworld operates over 9,000 screens in 10 countries and employs approximately 28,000 people.