British Cineworld Group, the world’s second-largest cinema operator, is expected to file for bankruptcy, according to a report from The Wall Street Journal. The parent company of United States-based Regal Cinemas will file a chapter 11 petition in the U.S., with insolvency proceedings expected to follow in the United Kingdom.
Reportedly, the move was prompted by the company’s struggles to recover from losses it suffered during the pandemic. Cineworld reached $4.8 billion in debt, and there is the belief that expected low attendance due to the lack of blockbuster releases later this year would cripple them even more. Law firm Kirkland & Ellis LLP and consultant firm AlixPartners was hired to guide the company through the bankruptcy process.
Shortly after the report went public, the Cineworld stock slumped as much as 58.27% on Friday compared to the £9.57 close on Thursday. The company’s shares are 87.55% down year to date.
Reacting to the news about Cineworld’s bankruptcy, the CEO of AMC, Adam Aron, tweeted that his company isn’t facing similar problems and remains “optimistic and confident in our future.”
Cineworld Group operates 9,518 screens on 790 locations in 10 countries. In the United States, Cineworld is present through Regal Cinemas, which has 7,200 screens on 549 sites.