Cineworld, the U.K.-based parent company of Regal Cinemas, on Monday confirmed that the debt-laden company is considering bankruptcy in the U.S. as one of several “strategic options to both obtain additional liquidity and potentially restructure its balance sheet.”
The world’s second-largest movie theater chain, responding to a report published in Friday’s Wall Street Journal, said that it remains “in discussions with many of its major stakeholders including its secured lenders and their legal and financial advisers.” The company also stressed that its theaters “are open for business as usual and continue to welcome guests.”
Last Wednesday, the company announced that it was in the midst of a liquidity crisis exacerbated by what it called lower-than-expected ticket sales over the last several months due to limited new studio content.
Cineworld’s stock price dropped by more than half last Wednesday. Shares have cratered since then, falling from £20.80 at market close on Tuesday to £2.99 in early trading Monday on the London Stock Exchange.
Regal Cinemas was hit hard in the pandemic, losing $3 billion in 2020 and nearly $710 million before tax in 2021. Through the end of May this year, only 28 films debuted in wide release as compared to 42 films through the same span in 2019.
While the year-to-date U.S. box office ($5.12 billion) is up 176% compared to pandemic-starved 2021, ticket sales are still nearly 32% behind the record-setting 2019 and 36% behind 2018 in the same span. Even blockbusters like “Top Gun: Maverick” have not been enough to improve the exhibitors’ revenue picture.
