Owner of Regal Cinemas chain preparing to file for bankruptcy
Regal Cinemas at the Riverside Plaza. The owner of Regal Cinemas is preparing to file for bankruptcy.
The owner of Regal Cinemas is having a tough time — its stock crashed as much as 80% Friday after reports that its parent company is preparing to file for bankruptcy.
British company Cineworld Group has spoken to lawyers at Kirkland & Ellis LLP to advise on the bankruptcy process in the United States and United Kingdom, according to a report by The Wall Street Journal.
The stock recovered slightly but was still nearly 60% below its price at the start of Friday trading.
Earlier last week, Cineworld said in a news release that, despite a “gradual recovery of demand” since last spring, admissions were below expectations. The company blamed a limited roster of films for the lack of moviegoers, a situation it expects to continue until the end of November.
The chain, which owns more than 500 movie theaters across the U.S., is exploring how to reduce its debt obligations, which it warned would “likely result in very significant dilution of existing equity interests” for shareholders.
Cineworld has struggled to stay afloat during the pandemic, when it was forced to close its movie theaters worldwide. It suffered a $2.7 billion loss in 2020 and $566 million loss in 2021.
It is a similar story for other movie theaters. So far this year, revenues at the U.S. box office are nearly 30% lower than before the pandemic despite a big rebound, said Comscore, a media data company.
Cineworld declined to comment to CNN Business on the reports that it is considering filing for bankruptcy. Kirkland & Ellis LLP did not immediately respond to CNN Business’ request for comment.
Regal has 32 locations in Los Angeles, Orange, Riverside and San Bernardino counties, according to its website.