- Cineworld set to file for administration in the UK in July
- Cinemas will continue to remain open as usual, it said
- Cineworld shares are now practically worthless at just 0.6p today
Cineworld will file for administration in the UK next month and its shares will be suspended as the cinema chain moves forward with its restructuring plan.
However, the world’s second largest operator behind Picturehouse, Regal, Planet and Cinema City told investors on Monday its cinemas will continue to remain open as usual.
The group filed for Chapter 11 bankruptcy in the US last year to restructure its roughly $5billion (£3.9billion) debt pile in a move that is set to wipe out shareholders.
Filing for a Chapter 11 bankruptcy means a company intends to reorganise its debts and assets to have a fresh start, while remaining in business.
It aims to reduce debts by around $4.5billion (£3.6billion), with its lenders pumping in fresh funds in exchange for ownership of the reorganised group as it emerges from Chapter 11 bankruptcy protection.
However, Cineworld previously said that the plan ‘does not provide for any recovery’ for shareholders.
Cineworld shares are worth just 0.6p today after falling another 15 per cent. They were changing hands at 300p just four years ago.
The cinema chain said the shares ‘will be suspended shortly following any decision by the board to make an application to appoint administrators […] currently expected to take place in July 2023’.
Cineworld was devastated by pandemic lockdowns forcing it to shut down its cinemas, having already racked up enormous debts through the costly takeover of US rival Regal Cinemas in 2018.
In April, it scrapped plans to sell some or all of its businesses after failing to find a buyer.
It told shareholders today: ‘Cineworld continues to operate its global business and cinemas as usual without interruption and this will not be affected by the entry of Cineworld Group plc into administration.
‘The group and its brands around the world – including Regal, Cinema City, Picturehouse and Planet – are continuing to welcome customers to cinemas as usual.
‘The group continues to honour the terms of all existing customer membership programmes, including Regal Unlimited and Regal Crown Club in the United States and Cineworld Unlimited in the UK.’
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