Cineworld admits it is thinking about filing for bankruptcy

•  As the movie Theatre Company continues to struggle with $5 billion in debt.
• Cineworld has acknowledged that it is thinking about declaring bankruptcy in the US. The Corporation, which also owns the Picturehouse chain in the UK
• Although Cineworld has a market value of about $69 million, it is nearly $5 billion in debt.

As the movie theatre company continues to struggle with $5 billion in debt, Cineworld has acknowledged that it is thinking about declaring bankruptcy in the US.

The corporation, which also owns the Picturehouse chain in the UK, stated that there would be “no significant impact” on employees and that its theatres would “stay open for business.”

Around the world, Cineworld has more than 28,000 employees.

Cineworld, like other movie theatre businesses, suffered greatly from the pandemic.

Due to social distance laws, several theatres had to close for protracted periods of time during the lockdowns or operate at a reduced capacity.

Streaming services, whose popularity skyrocketed during the lockdowns, also posed a serious threat to movie theatre chains.

However, more recently, Netflix reported a dramatic decline in subscriptions as a result of consumers making budget cuts due to the rising cost of living.

• Cineworld shares plunge on bankruptcy fears

The latest Bond movie, Top Gun: Maverick, and Thor: Love and Thunder were among the blockbusters that theatre owners had hoped would entice customers back when lockout restrictions were relaxed.

Top Gun: Maverick is one of the top 10 highest-grossing movies of all time with box office receipts of $1.8 billion.

However, Cineworld cautioned last week that there weren’t enough blockbuster movies being released to draw moviegoers and that this was hurting admissions.

In comparison to the same period in 2019, prior to the pandemic, box office receipts this year are down overall by 32% or more than a third.

After The Wall Street Journal reported that Cineworld was poised to file for bankruptcy “within weeks,” the company’s shares fell 60% on Friday.

Cineworld announced on Monday that it was considering a number of business restructuring options, including filing for Chapter 11 in the US.

This enables a business to carry on operations as it bargains with its creditors.

The business declined to comment on whether it was also considering declaring bankruptcy in the UK or what effect it could have on its 4,600 UK workers.

“Cineworld would plan to retain its activities in the ordinary course until and following any filing,” the company said in a statement. “Cineworld would hope to continue its business over the long term with no substantial impact upon its workers.”

In the UK and Ireland, Cineworld operates 128 theatres. It has 9,189 screens total, spread over more than 750 venues.

It is active in ten nations, including the United States, Poland, and Israel.

Although Cineworld has a market value of about $69 million, it is nearly $5 billion in debt.

The company has grown by making acquisitions all across the world. However, it abandoned a proposal to acquire Cineplex two years ago, sparking a protracted legal dispute in which the Canadian company demanded significant compensation from Cineworld.

On Monday morning, Cineworld’s stock price slightly increased. However, the share price is still far from where it was at the beginning of 2020, when it hit 220p before the pandemic struck, at just over 4p.

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