The world’s second-largest movie theater chain is in trouble
LONDON– The owner of Regal Cinemas is having a tough time – its stock crashed as much as 80% on Friday after reports that its parent company was preparing to file for bankruptcy.
British company Cineworld Group has spoken to lawyers at Kirkland & Ellis LLP to advise on bankruptcy proceedings in the United States and the United Kingdom, according to a Wall Street Journal report.
The stock has recovered a bit, but is down 60% from its price at the start of Friday’s trading.
Earlier this week, Cineworld said in a press release that admissions were lower than expected, despite a “gradual recovery in demand” since last spring.
The company blamed a limited roster of films for the lack of moviegoers, a situation expected to persist till the end of November.
The chain, which owns more than 500 movie theaters across the US, is exploring how to reduce its debt obligations, warning that “existing equity interests are likely to be significantly diluted” for shareholders.
Cineworld has struggled to stay afloat during the pandemic as theaters around the world have been forced to close. It lost $2.7 billion in 2020 and $566 million in 2021.
It’s a similar story for other theaters. So far this year, U.S. box office revenue is down nearly 30% from before the pandemic, according to ComScore, a media data company, despite a big rebound.
Cineworld declined to comment on reports that CNN Business is considering filing for bankruptcy. Kirkland & Ellis LLP did not immediately respond to CNN Business’ request for comment.