Cineworld files for bankruptcy after battling to survive post-covid

CINEWORLD has filed for bankruptcy in the US after struggling with a dearth of blockbusters and a huge $5bn (£4.35bn) debt pile.

The world’s second biggest cinema operator filed for bankruptcy in the US as it seeks to buy time to restructure its business. Cineworld’s chief executive and its largest shareholder Mooky Greidinger is expected to take a significant hit in the restructuring. He owns about 20pc of the business.

He said the process will help strengthen the chain’s financial position and allow it to eventually return to growth. Cineworld has commitments for almost $2bn of bankruptcy financing lined up from existing lenders, the company told investors, and it plans to keep theatres open as it restructures the debt. Its largest lenders include Centerbridge Partners, Eaton Vance, Invesco and State Street Corporation.

It is reviewing its estate in the US, where it now draws most of its revenues, and is in discussions with landlords to secure better terms for leases.

Mr Greidinger said: “We look forward to continuing to provide guests and members with the best cinematic experiences for years to come.”

The Uk-based company was loaded with debt after buying US rival Regal for $3.6bn in 2018.

Income collapsed during the coronavirus pandemic, as theatres were forced to shut and competition from online streaming platforms intensified. Cinemas experienced a bounceback after restrictions were eased globally and thanks to blockbusters such as Spiderman: No Way Home, No Time to Die, Top Gun: Maverick, and Dune. But executives have complained there were too few of these big hits to sustain business.

Cineworld brands include Picture House, Cinema City and Yes Planet. It has 747 sites and 9,139 screens globally.

No major impact on the UK business is anticipated at present and shares will continue to trade in London, the company said.

It plans to emerge from bankruptcy in the first three months of next year.

Cineworld has paid $100m fees to bankers and lawyers in the past two years in the fight for survival,

analysis revealed recently.