Cineworld Group – the world’s second-largest movie theater chain and owner of Regal Cinemas – announced on Wednesday that it has filed for Chapter 11 bankruptcy.
The British company, which has more than 500 cinemas across the United States, said that he started chapter 11 proceeding in the United States Bankruptcy Court for the Southern District of Texas to get rid of the company’s debt. He also expects the stock to “strengthen its balance sheet and provide the financial strength and flexibility to accelerate and capitalize on Cineworld’s strategy in the motion picture industry.”
The company added that it has access to nearly $2 billion in financing from existing lenders to continue operating. Cineworld also said in the filing that it “plans to operate its global business and theaters as usual throughout this process.”
The company warned late last month that a voluntary Chapter 11 filing was one of the options it was considering to reduce its debt.
“We have an incredible team across Cineworld laser who are focused on evolving our business to thrive as the movie industry returns,” Cineworld CEO Mooky Greidinger said in a statement on Wednesday. “The pandemic has been an incredibly difficult time for our business, with the forced closure of cinemas and a huge disruption to movie times that has gotten us to this point.”
Greidinger added that the bankruptcy filing is “part of our ongoing efforts to strengthen our financial position and is aimed at deleveraging that will create a more resilient capital structure and an efficient business.”
“This will allow us to continue executing our strategy to reinvent the most immersive cinematic experiences for our guests through the latest and most advanced screen formats and enhancements to our flagship cinemas,” he said. added. “Our goal remains to further accelerate our strategy so that we can strengthen our position as the ‘best place to watch a movie’.”
Like many cinemas, Cineworld has struggled during the pandemic, which has devastated the industry and is still impacting exhibition. The global health crisis has caused the closure of cinemas around the world and the company lost $2.7 billion in 2020 and another $566 million in 2021.
The economy has improved for cinemas, but a return to normal is still a long way off.
The domestic box office rebounded this summer thanks to big hits like “Top Gun: Maverick” and “Jurassic Park: Dominion” as well as smaller hits like “Elvis” and “The Black Phone.” Still, movie attendance has dried up in recent weeks amid a dearth of new films and supply chain issues hitting Hollywood and many features going straight to streaming.
— Mark Thompson and Anna Cooban contributed reporting.