The pandemic has seemingly affected some theater chains far worse than others.
Per sources with The Wall Street Journal, Cineworld Group Plc, the owner of Regal Cinemas, is preparing to file for bankruptcy “within weeks” following its struggle to “rebuild attendance from pandemic lows.” Cineworld is expected to not only file a chapter 11 petition in the U.S., but it may also file an insolvency proceeding in the U.K., according to people familiar with the matter.
Cineworld has blamed what is supposedly a lack of films for its decrease in attendance.
Cineworld said on Wednesday that despite a gradual recovery in attendance since reopening theaters last year, recent admissions have lagged below expectations due to a limited film slate. The company is evaluating strategic options to generate liquidity and potentially restructure its balance sheet through a comprehensive deleveraging transaction, it said. Any such deleveraging likely will be highly dilutive to shareholders, Cineworld said.
Cineworld was already in danger of going bankrupt in 2020 due to COVID-19 restrictions that forced the company to shut down its nearly 800 theaters, but it was able to keep afloat thanks to creditors.
AMC has apparently managed to fair better, having raised more than $2.2 billion of equity during the pandemic, not to mention its new reputation as a meme stock.
Source: The Wall Street Journal (alternate)