Cineworld, the world’s second-largest cinema chain and parent company of Regal Cinemas and Picturehouse, is reportedly preparing to file for bankruptcy, according to The Wall Street Journal.
The major exhibitor, which operates 751 branches and 28,000 employees across ten countries, has reportedly run up a debt of more than $4.8 billion U.S. dollars after losses soared whilst cinemas were shut down during the pandemic.
Despite the success of several recent blockbuster hits like “Top Gun: Maverick” and “Jurassic World: Dominion,” the company is failing to see a quick enough recovery in movie-going.
They have now reportedly hired lawyers from Kirkland & Ellis and consultants from restructuring experts AlixPartners to advise on the process. It is expected to file a chapter 11 petition in the US and is considering insolvency proceedings in the UK.
Before the pandemic, the company’s stock was trading at £1.97, in the wake of this news it has fallen to £0.02 according to The Guardian. The company’s market value, at one time worth as much as £4.4 billion before the pandemic, is now worth less than £50 million.
Whilst the lack of summer blockbusters and the overall audience shift to streaming platforms is partly to blame, analysts suggest the company’s aggressive acquisition plans did not help.
This is in stark contrast to the performance of AMC Entertainment, the world’s largest cinema group which has a $12.6 billion market value and recently had its highest monthly attendance in US cinemas since before the pandemic.
