LONDON (CelebrityAccess) — Cineworld Group, the world’s second largest cinema operator with 747 locations and 9,139 screens in 10 countries, has filed for Chapter 11 bankruptcy in the United States.
The London-based company, which operates the Regal Cinemas chain in the U.S., reported outstanding debt of $8.9 billion at the end of 2021, including approximately $4 billion owed on leases.
As part of their bankruptcy filing, Cineworld, with support from their secured creditors, will seek to restructure and reduce debt and create a viable path for the company to continue to operate going forward.
According to Cineworld’s bankruptcy filing, they enter Chapter 11 with commitments for an approximate $1.94 billion in financing from existing lenders which will help Cineworld’s cinemas to continue to operate during the bankruptcy process.
The Group Chapter 11 Companies will remain in possession and control of their assets, existing management and the board of directors will stay in control of the business amid the restructuring. Cineworld currently anticipates emerging from Chapter 11 during the first quarter of 2023
“We have an incredible team across Cineworld laser focused on evolving our business to thrive during the comeback of the cinema industry. The pandemic was an incredibly difficult time for our business, with the enforced closure of cinemas and huge disruption to film schedules that has led us to this point. This latest process is part of our ongoing efforts to strengthen our financial position and is in pursuit of a de-leveraging that will create a more resilient capital structure and effective business. This will allow us to continue to execute our strategy to reimagine the most immersive cinema experiences for our guests through the latest and most cutting-edge screen formats and enhancements to our flagship theatres. Our goal remains to further accelerate our strategy so we can grow our position as the ‘Best Place to Watch a Movie’,” said Mooky Greidinger, Chief Executive Officer of Cineworld.
Cineworld, like other cinema operators, has faced significant challenges in recent years. The rise of streaming services and a concordant drop in the number of new releases led to a steady decline in ticket sales that predated the pandemic.
According to data compiled by Nash Information Services, ticket sales have been declining for years, down from a peak of 1.575 billion in 2002 to 1.229 billion in 2019. COVID proved to be a nail in the coffin for many cinemas with more than 600 locations in the U.S. closing permanently during the last two years.
Unlike the live music sector, a recovery for cinemas does not appear to be taking place. On Labor Day weekend in the U.S., which should be prime time for cinemas, the top grossing movie was “Top Gun: Maverick” a remake of an 1980s classic that’s already spent 15 weeks in theaters.
“Top Gun” faced little competition over the weekend, with no new movies debuting in the top 10. For Labor Day weekend, Top Gun grossed just $7.9 million domestically and the total gross of the top ten domestic movies was just $52.8 million, according to Comscore.
