Cineworld to file for administration as part of financial restructuring
The chain stressed the move will not affect the British operations for the holding company, with cinemas continuing to remain open as usual.
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Troubled cinema chain Cineworld has said it will file for administration in the UK as part of a restructuring plan that is set to wipe out shareholders.
The world’s second-largest cinema chain said it will apply for administration for the London-listed company in July, which will see shares in the firm suspended.
But it stressed the move will not affect the British operations for the holding company, with cinemas continuing to remain open as usual.
It has 128 cinemas across the UK and Ireland.
The group and its brands around the world – including Regal, Cinema City, Picturehouse and Planet – are continuing to welcome customers to cinemas as usual
Cineworld filed for Chapter 11 bankruptcy in the US last year after being weighed down by its mammoth debts and weaker-than-hoped audience numbers.
The group, which also owns the Picturehouse brand, is moving forward with plans to restructure its roughly five billion US dollars (£3.9 billion) debt pile to allow it to exit bankruptcy.
It aims to reduce debts by around 4.53 billion US dollars (£3.6 billion) with a plan to raise 800 million US dollars (£628 million) through a rights offering, while also securing 1.46 billion US dollars (£1.1 billion) of new debt financing.
The restructuring plan is set to wipe out shareholders in the cinema chain in order to support its lenders and creditors.
Shares fell by more than a quarter in Monday morning trading on news of the administration plans, although the stock has already plummeted by almost 99% over the past five years, after being hit hard by the pandemic which forced it to close some of its sites.
Cineworld said: “Cineworld continues to operate its global business and cinemas as usual without interruption and this will not be affected by the entry of Cineworld Group plc into administration.
“The group and its brands around the world – including Regal, Cinema City, Picturehouse and Planet – are continuing to welcome customers to cinemas as usual.
“The group continues to honour the terms of all existing customer membership programmes, including Regal Unlimited and Regal Crown Club in the United States and Cineworld Unlimited in the UK.”
In April, the group also scrapped plans to sell its businesses outside the UK, US and Ireland after potential bidders failed to meet the value desired by Cineworld’s lenders.
It hopes to emerge from bankruptcy protection in July after receiving backing for its overhaul from most of its lenders.