Cineworld Group filed for bankruptcy protection in the US as the debt-laden company seeks to restructure.
According to the British company, it filed for Chapter 11 bankruptcy in the United States. This allows it to continue to operate while it works to solve its problems.
The operator of the second-largest cinema chain in the world stated that it believes a complete financial restructuring is in the group’s best interests and those who are involved in it long-term.
Cineworld acknowledged that current shareholders may see their shares diluted, but shares will continue trading on London Stock Exchange.
The company plans to emerge from bankruptcy within the first quarter of next year. It stated that it will use the restructuring process to try and negotiate better terms with US landlords.
Cineworld Group employs approximately 28,000 people and has 751 locations, including 127 in the UK. It also operates in 10 other countries with more than 9,000 screens and 751 sites. It is the owner of the Picturehouse chain in the UK and Regal Cinemas in America.
It was in debt of £4bn at the close of the previous financial year. To help recover from the COVID-19 pandemic, it had placed its hopes on blockbusters like Top Gun; Maverick, The Batman and Thor: Love And Thunder.
Cineworld was also affected by several legal disputes.
It reached an agreement last September to pay £141m for disgruntled Regal shareholders, who were upset about the 2017 purchase price.
It was ordered by a court to pay £720m in December over a decision to not go ahead with the takeover of Canadian rival Cineplex.
Chief executive Mooky Gridinger appealed against the court decision, claiming that the company acted in good faith.
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