Britain’s Cineworld Group (CINE) has filed for bankruptcy, citing $5 billion U.S. in debts.
The global movie theater chain that is headquartered in London, England filed for Chapter 11
bankruptcy protection in Texas. The filing enables Cineworld to continue operating while it
works out a plan to repay its creditors and restructure its debt.
Cineworld draws most of its revenues from its U.S. subsidiary, Regal Cinemas, which it
acquired in 2018. The company has been embroiled in a legal battle with Canada’s Cineplex
(CGX) after it backed out of a planned takeover in 2020.
Toronto-based Cineplex was awarded $1.24 billion in damages after Cineworld walked away in
2020 from its $2.18 billion deal to buy the Canadian movie theatre chain. Cineplex said it still
plans to pursue the court judgement despite Cineworld filing for bankruptcy.
Cineworld says it plans to cut its debt load with the support of its lenders, according to a written
statement from the company. Cineworld added that it will keep its movie theatres open as it
seeks to restructure its debts.
Earlier in August, Cineworld surprised investors with an announcement that it was looking to
restructure its balance sheet.
Movie theatre chains have struggled to recover from the pandemic amid competition from online
streaming platforms.
Cineworld took on a hefty debt load after buying Regal Cinemas in 2018 and becoming the
world’s second biggest movie theatre chain. Its adjusted earnings were $455 million U.S. in its
last financial year, according to its annual report.
Cineworld stock is down 90% this year and trading at $0.05 U.S. per share.
