Cineworld, one of the largest cinema chains, is preparing to file for bankruptcy

The sign of a cinema belonging to the Cineworld cinema chain in Manchester, October 4, 2020. © PHIL NOBLE / REUTERS

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2 mins

British cinema chain Cineworld, owner of Regal Cinemas, is preparing to file for bankruptcy within weeks, according to people familiar with the matter.

After this announcement, its title on the London Stock Exchange fell by almost 70% on Friday.

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Cineworld is the second largest cinema chain in the world after the American AMC.

And it has failed to recover, despite the gradual recovery in attendance since the reopening of cinemas last year.

The number of admissions was clearly lower than expected, due to an insufficient supply of films.  

Founded in the UK in 1995, Cineworld bought Régal Cinema in 2018 for $3.6 billion.

He was in bad shape two years ago, at the height of the pandemic, when nearly 800 cinemas had to close.

But he then managed to escape bankruptcy thanks to the support of creditors.

The distributor, based in London, is therefore currently evaluating how to restructure itself so as not to completely close.

Faced with this news, the group's share price collapsed (-58%) reaching barely four pence around 5:30 p.m. UT.

Avoid total bankruptcy

The British film company has hired lawyers from Kirkland & Ellis LLP and consultants from AlixPartners to advise them on this process, under Chapter 11 of the US bankruptcy law, which allows companies to reorganize under the protection of this same law in an attempt to avoid permanent bankruptcy.

Cineworld also plans to file insolvency proceedings in the UK.

AMC, its arch-rival, saw its attendance and offers for new movies plummet, but it managed to raise more than two billion in equity to stay afloat.

For this, he appealed largely to individual investors.

In addition, AMC for its part “

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►To listen also: Chronicle of the media - The cinema of the post-Covid

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