UK’s Cineworld Group, the world’s second largest cinema chain, is preparing to file for bankruptcy as footfalls at its properties have reduced dramatically after the pandemic lockdowns. The chain, which also operates Regal Cinemas in the US, has reportedly engaged lawyers and consultants to advise it on the bankruptcy process.
Just recently, the cinema chain had warned that a lack of big-budget films was hitting admissions and this was likely to persist till November. The growing debt of the chain was pushing it towards bankruptcy.
Reportedly, the company, listed on the London stock exchange, is expected to file a Chapter 11 petition in the United States and is considering filing an insolvency proceeding in the UK.
It may be recalled that individual investors helped a similarly indebted AMC Entertainment cinema chain recently raise more than $2 billion from stock sales and thereby reduce its debt, thus averting its own trip down the bankruptcy lane.
News of Cineworld’s impending filing took down shares of AMC nearly 7% on August 19 while smaller chains like Cinemark and IMAX saw their shares fall by 4.5% and 3% respectively. None of the three chains are facing financial stress like Cineworld, but the latter’s move underlines that the exhibition industry in the US and UK is still working its way out of the huge hole the pandemic created in its pocket.