The Regal Cinemas owner is having a tough time — its shares plunged as much as 80% on Friday after reports that its parent company was preparing to file for bankruptcy, CNN reported.
According to a Wall Street Journal report, British company Cineworld Group has spoken to lawyers from Kirkland & Ellis LLP to advise on bankruptcy proceedings in the United States and the United Kingdom.
The stock has recovered slightly but is still 60% down from where it opened Friday.
Earlier this week, Cineworld said in a press release that admissions have fallen short of expectations despite a “gradual recovery in demand” since last spring.
The company blamed a limited slate of films for the lack of box office admissions, a situation that is expected to last through late November.
The chain, which owns more than 500 theaters in the US, is evaluating how to reduce its debt obligations, which it warned would “likely result in a very significant dilution of existing equity interests” for shareholders.
Cineworld has struggled to stay afloat during the pandemic as it has been forced to close its cinemas worldwide. It suffered a loss of $2.7 billion in 2020 and a loss of $566 million in 2021.
The same applies to other cinemas. According to Comscore, a media data company, US box office receipts so far this year are nearly 30% lower than before the pandemic.
Cineworld declined to comment to CNN Business on reports that it is considering filing for bankruptcy. Kirkland & Ellis LLP did not immediately respond to CNN Business’ request for comment.
– Frank Pallotta contributed to the coverage.
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