Cineworld has filed for bankruptcy protection in the US after being unable to recover from the devastating pandemic.
The Guardian reports the world’s second-biggest cinema chain is looking to restructure after years of low audience numbers.
Cineworld has 751 theatres, including 500 in the US.
It is based in Britain and has more than 100 cinemas in the United Kingdom, as well as more across Europe and Israel.
The company also owns the Picturehouse and Regal cinema chains in the US.
Cineworld has filed for Chapter 11 protection – which is used for companies to devise a plan of reorganization with to keep the company alive and to negotiate with creditors to reduce their debts.
Cineworld said it “will seek to implement a deleveraging transaction that will significantly reduce the group’s debt, strengthen its balance sheet and provide the financial strength and flexibility to accelerate, and capitalize on, Cineworld’s strategy in the cinema industry.”
The company said it hoped to emerge from bankruptcy proceedings in the first quarter of 2023 and had $1.94bn in financing from existing lenders to help it through.
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Eric Snyder, a bankruptcy expert at Wilk Auslander, said Cineworld’s creditors were not giving it “a lot of time to make the decision between reorganizing or selling it”.
“Travelling to a movie theatre to watch a movie for two to three hours, and spending $20 to $25, is just not attractive any more for a lot of people, especially young people.”
Shares in Cineworld have been falling since the start of 2022 as people didn’t return to going to the movies after Covid lockdowns were lifted.
Shares rose 10 percent on Wednesday to 4.29p, but were still down 87 percent from the start of the year.
Image credit: Elliott Brown Flickr