Movie theater operator Cineworld Group has filed for Chapter 11 bankruptcy protection in the U.S. as it deals with billions of dollars in debt and lower-than-expected attendance at screenings. The company and its subsidiaries have commitments for an approximate $1.94 billion debtor-in-possession financing facility from existing lenders, which will help ensure Cineworld’s operations continue as usual while it undergoes a reorganization. The parent of Regal Cinemas previously said admissions have been below expectations and a “limited film slate” further threatened its operations.
An Aug. 24 Associated Press article had reported that the company was anticipated to file as it is contending with billions of dollars in debt and more empty seats in front of its screens than expected.
The British company, which owns Regal Cinemas in the United States including the ones in Augusta and Aiken, had said its theaters remain “open for business as usual” as it considers options for relief from its debt load. Cineworld said it expects to continue operating even after any potential filing, though its stock investors could face steep or total losses on their holdings.
Cineworld faces challenges specific to itself after building up $4.8 billion in net debt, not including lease liabilities. But the entire industry is navigating a tenuous recovery after the pandemic shut theaters worldwide. To be sure, moviegoers have streamed back into theaters this year to see blockbusters like “Spider-Man: No Way Home,” “Top Gun: Maverick,” and ”Jurassic World: Dominion.” Industry giant Warner Discovery has said it’s doubling down on theaters and moving away from debuting films on its HBO Max streaming service.
But this summer’s $3.3 billion in ticket sales is still running nearly 20% behind the summer of 2019, before the pandemic, the Aug. 24 article said.
