Shares crash 60pc as Cineworld teeters on brink of bankruptcy
SHARES in Cineworld fell almost 60pc amid reports the world’s-second biggest cinema chain is just weeks away from filing for bankruptcy.
The London-listed stock hit an alltime low of 1.8p after the Wall Street Journal said it was expected to file a chapter 11 petition in the US and is also considering insolvency proceedings in the UK. Shares closed down 58.3pc, or 5.68p, at 4.07p.
The chain, which has 127 cinemas in the UK, is combating falling sales and a £4bn debt pile.
Its problems have escalated since Wednesday when it said a lack of big-budget movies was hitting admissions. It had hoped to bounce back this year with films such as Tom Cruise’s Top Gun: Maverick, The Batman, and Where the Crawdads Sing, starring Daisy Edgar-Jones.
But Hollywood has released fewer movies than it usually does, largely due to filming disruptions. Cineworld also warned that it needed more cash and was considering a large capital restructuring to save the business. The firm is also paying the price for a string of botched takeovers and must pay hundreds of millions in damages linked to past acquisition deals.
Former shareholders of Regal sued over the price Cineworld paid for the US chain in 2018. Cineworld has agreed to pay £141m in settlement.
It also faces paying more than £700m damages to Canadian rival Cineplex, after a bungled takeover in 2019. A legal fight is ongoing.
Boss Moshe Greidinger has continued to take home bumper pay. Last year he earned £1.48m, fuelling a fat-cat pay revolt by shareholders.