The world’s second largest cinema chain is on the verge of bankruptcy
According to the Wall Street Journal, the Regal Cinemasthe world’s second-largest industry chain, is on the brink of bankruptcy now that its shares have plummeted into 80% last Friday (19).
The fall began after its parent company, CineWorld Groupannounced that it is preparing to close down its activities.
Apparently, the British company has contacted the legal team at Kirkland & Ellis LLP to formalize the bankruptcy process in the United States and the United Kingdom.
The company’s delicate situation has been extending since 2020, when it was forced to close its doors due to isolation decrees due to the Coronavirus pandemic.
At the time, the network had a loss of $2.7 billion. Last year, the loss was approximately US$566 million.
This year, the CineWorld intended to recover 1/3 of the value that its capital was valued before the pandemic, but continues 60% below expected.
With 500 rooms spread across the United States alone, the chain has failed to stabilize and is studying ways to reduce its debt obligations, which “would likely result in a very significant dilution of existing profit shares” for shareholders.
Through a statement, CineWorld blamed a limited list of films for the lack of viewers, a situation that could remain until the end of November.
For now, negotiations between the company and the lawyers are still in the early stages, so we just have to wait to know the outcome of the situation.
Recalling that other cinema chains also face similar problems, because the North American USA box office was almost 30% lower in the first half of this year compared to the same period before the pandemic.
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