Cineworld confirmed on Monday that it is considering filing for bankruptcy in the US as it looks to access near-term liquidity.
Responding to press speculation, the company said: “The strategic options through which Cineworld may achieve its restructuring objectives include a possible voluntary Chapter 11 filing in the United States and associated ancillary proceedings in other jurisdictions as part of an orderly implementation process. Cineworld is in discussions with many of its major stakeholders including its secured lenders and their legal and financial advisers.
“Any such filing would be expected to allow the group to access near-term liquidity and support the orderly implementation of a fully funded deleveraging transaction. Cineworld would expect to maintain its operations in the ordinary course until and following any filing and ultimately to continue its business over the longer term with no significant impact upon its employees. As previously announced, any deleveraging transaction would, however, result in very significant dilution of existing equity interests in Cineworld.”
Shares tumbled on Friday after the Wall Street Journal reported that Cineworld, which owns Regal Cinemas in the US, was preparing to file for bankruptcy within weeks after struggling to rebuild attendance from pandemic lows.
The WSJ cited sources as saying that Cineworld had engaged lawyers from Kirkland & Ellis LLP and consultants from AlixPartners to advise on the bankruptcy process. It said Cineworld was expected to file a chapter 11 petition in the US and was also considering filing an insolvency proceeding in the UK.
The company said on Monday that its Cineworld and Regal theatres globally are open for business as usual.
