British cinema chain Cineworld Group PLC CNNWF is expected to file for Chapter 11 (bankruptcy) in the United States and will do the same with insolvency proceedings in the United States, the Wall Street Journal reported.
Law firm Kirkland & Ellis LLP and consultants AlixPartners would advise the company in the bankruptcy proceedings.
The company was hit hard in 2020 as around 800 of its theaters were closed following the spread of the COVID-19 pandemic and were helped by creditors to manage operations.
“Despite a gradual recovery in demand since reopening in April 2021, recent admission levels have been below expectations,” the company said.
He added that despite blockbuster movies like Top Gun: Maverick, not enough big movies were hitting theaters to make his operations viable.
Cineworld had net debt of $8.9 billion at the end of 2021 against tax revenue of $1.8 billion.
On the other hand, the CEO of AMC Entertainment Holdings Inc. CMAAdam Aron, while noting Cineworld’s situation, said he was quite optimistic about growing demand for AMC’s theatrical portfolio at 4Q FY22. He said AMC ended the second quarter of FY22 with $1 billion in cash.
“Our new AMC Preferred Equity Security, which begins trading on the New York Stock Exchange on Monday, August 22, 200, should also make us a much stronger company,” he added.
Price Action: CNNWF shares are trading down 46.35% to $0.063 when last checked on Friday.
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