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The world’s second largest movie theater chain and owner of Regal Cinemas, UK-based Cineworld Group, saw its stock plunge over 60% on Friday after The Wall Street Journal reported that the company will soon file for bankruptcy as the business struggles amid declining admissions.
A Regal Cinemas theater in New York which was temporarily closed during Covid lockdowns.
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British movie theater company Cineworld is preparing to file for bankruptcy as its business struggles to recover from the pandemic, The Wall Street Journal first reported on Friday.
Movie theater attendance has been slow to recover from pandemic lows, with Cineworld narrowly avoiding bankruptcy in 2020 after taking on debt to stay afloat– over 800 of its theaters were closed during Covid lockdowns.
Cineworld has since struggled to generate liquidity and repay that debt, recently warning that a lack of big-budget films in the fall is likely to further impact depressed attendance numbers.
Shares of Cineworld tanked on the bankruptcy report, falling over 50% to around $0.15 per share, down nearly 90% so far in 2022 and dropping significantly from a high of nearly $2 per share earlier this year.
The company is negotiating with lenders as it explores bankruptcy options, also engaging lawyers from Kirkland & Ellis LLP and consultants from AlixPartners to advise on the process, sources told the journal.
Shares of other movie theater chains took a hit on the news as well: Cineworld’s largest competitor, AMC Entertainment, saw its stock tank over 7%, now down more than 30% so far in 2022.
