Cineworld considers bankruptcy but ‘no significant effect’ on employment

Bosses at Cineworld are weighing whether to send the world’s second-largest cinema chain into bankruptcy.

hey confirmed on Monday that it is looking at options to restructure the business, which is already struggling with mounting debts.

This can lead to filing for Chapter 11 bankruptcy in the United States. Chapter 11 is often referred to as bankruptcy reorganization and is by no means end of line for the company.

Companies including General Motors and Marvel Entertainment previously made Chapter 11 filings, but will later bounce back.

The announcement from Cineworld comes days after the Wall Street Journal first reported that the company was on the verge of declaring bankruptcy.

Chapter 11 allows companies to propose a reorganization and the banks, suppliers and employees to whom they owe money to vote on the plan.

After filing, the company remains in control of its assets and does not have to close or liquidate its business to pay its debts.

It is also protected from foreclosure and forfeiture.

“Cineworld and Regal cinemas globally remain open for business as usual and continue to welcome guests and members,” the company told shareholders.

“Strategic options through which Cineworld can achieve its restructuring goals include possible voluntary Chapter 11 filings in the United States and related ancillary procedures in other jurisdictions. other jurisdictions as part of an orderly implementation process.

“Cineworld is in discussions with many key stakeholders, including secured lenders and their legal and financial advisors.”

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It is important that the company’s cinemas will be able to stay in business throughout the entire process.

It offers some respite for workers at the 127 cinemas Cineworld operates in the UK, including the Picturehouse chain.

Globally, the movie giant employs around 28,000 people in 10 countries.

“Cineworld expects to maintain its operations in accordance with the normal process until and after any filing and ultimately to continue in business for a longer period of time without significantly impacting its employees. its members,” the business said.

But it added that shareholders are likely to see their stake in the cinema chain drop as a result of the filing.

It’s been a rough couple of years for anyone in the movie theater business, despite recent blockbuster releases like Top Gun: Maverick, The Batman and Thor: Love And Thunder.

Last week, Cineworld told investors that, while demand has recovered a bit from the pandemic, customers haven’t been flocking to cinemas in the numbers expected recently.

“These lower enrollment levels are due to a limited drama that is anticipated to continue through November 2022 and is expected to negatively impact the group’s trading and liquidity position during this period. next time,” it said. Cineworld considers bankruptcy but ‘no significant effect’ on employment

Fry Electronics Team

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