In response to recent speculation, Cineworld has provided an update to its August 17 announcement regarding an evaluation of strategic options to both obtain additional liquidity and potentially restructure its balance sheet through a comprehensive deleveraging transaction.
Reiterating that Cineworld’s theaters, including the Regal chain in the U.S., are “open for business as usual and continue to welcome guests and members,” the world’s second largest exhibitor said that the strategic options through which it may achieve its restructuring objectives “include a possible voluntary Chapter 11 filing in the United States and associated ancillary proceedings in other jurisdictions as part of an orderly implementation process.”
Further, “Any such filing would be expected to allow the group to access near-term liquidity and support the orderly implementation of a fully funded deleveraging transaction,” the company statement said. It added, “Cineworld would expect to maintain its operations in the ordinary course until and following any filing and ultimately to continue its business over the longer term with no significant impact upon its employees.”
Under heavy debt and amid a dip in box office this quarter — as well as facing a soft slate during August and September — Cineworld asserted Friday that it’s business as usual for the giant while it explores options. This followed a WSJ report that it was prepping to file for bankruptcy, and came after it had earlier presaged a potential Chapter 11 last week when it noted “active discussions with various stakeholders” as it evaluates “various strategic options.”
Today’s statement again noted that any deleveraging transaction would “result in very significant dilution of existing equity interests in Cineworld.”
The group’s evaluation of these strategic options remains ongoing, the company said.
As Deadline reported Friday, no one believes a bankruptcy means goodbye to Cineworld, rather a slimmed down and tidied up chain. Exhibition has a history of rightsizing through bankruptcy.
The sector has been one of the industry’s hardest hit as Covid forced closures of cinemas across an agonizingly volatile and lengthy period for bosses, workers and audiences. Cineworld is not alone in assessing its future. Vue International is being restructured and AMC has been maneuvering to lessen survival risk.