Cineworld’s future in doubt as it files for bankruptcy in the US

Cineworld’s future was thrown into doubt yesterday after it filed for bankruptcy in the US following weeks of speculation about its finances.

The troubled cinema chain announced that it had applied for Chapter 11 bankruptcy protection, which will allow it to keep operating and protect it from lenders while it attempts to restructure the business.

The British group had pinned its hopes on blockbusters such as Top Gun: Maverick, The Batman, featuring Robert Pattinson and Zoe Kravitz, and Thor: Love And Thunder to aid its recovery from the Covid-19 pandemic, but audience numbers have been well below expectations. 

As a result, the firm – which employs around 28,000 people worldwide and operates 751 cinemas in ten countries, 127 of which are in the UK – is seeking to ‘significantly’ reduce its massive debt pile of £7.5billion.

But it warned any transaction was likely to result in a ‘very significant dilution’ for its investors, who could see many of their positions completely wiped out.

Despite this, Cineworld shares were expected to continue trading in London while its cinemas around the world would remain open and continue operating as normal during the process. 

But shares have tanked over the last two years after it entered the pandemic with huge debts and was then forced to shut its cinema complexes for months at a time.

And the collapse threatens to completely wipe out the holdings of chief executive Mooky Greidinger and his brother Israel who together own just over 20 per cent of the group through their family vehicle Global City.

Despite the bankruptcy filing, Cineworld appeared to be upbeat, predicting it would emerge from Chapter 11 in the first three months of next year and that the process was ‘in the best interests’ of the firm and its investors.