Cinema operators have been struggling to bounce back from the pandemic with a weak release schedule and rising competition from online streaming services.
. On August 17, Cineworld surprised investors with an announcement that it was looking to restructure its balance sheet, in a move that would “likely result in a very significant dilution of existing equity interests”.Another British group, Vue Cinemas, is seeking to restructure its debt in court and transfer ownership from a pool of Canadian pension funds to its lenders.
Cineworld amassed a heavy debt load after buying Regal. Its adjusted earnings before interest, tax, amortisation and depreciation were just $US455 million in the last financial year, according to its latest annual report. It also faces nearly $US1 billion in damages to Canada’s Cineplex over a takeover bid that was aborted in 2020.
Chapter 11 bankruptcy allows a company to continue operating while it works out a plan to repay creditors. The company was also considering to start “ancillary proceedings” in other jurisdictions, Cineworld said in the statement.
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