Cineworld is to file for administration in the UK as part of the world’s second-largest cinema chain’s restructuring plan to reduce its debt levels.
The move will see Cineworld’s London-listed shares suspended and will wipe out shareholders in the company.
Cineworld insists its cinemas will continue to operate as usual and that its restructuring plan will “provide it with significant additional liquidity to fund its long-term strategy.”
The exhibitor said today that administrators, once appointed, will transfer its assets to a wholly-owned subsidiary called Crown. A newly incorporated company controlled by the group’s lenders will then become the sole owner of Crown, with Cineworld ceasing to have any interest in the parties.
Cineworld filed for bankruptcy protection in the US in September last year after grappling with heavy debts and being hit hard by the Covid crisis and the growth of streaming platforms. Its debts were reported at $5.2bn in June 2022.
Cineworld said it continues to expect to emerge from the bankruptcy protection in July, adding that approval from certain creditors will need to be obtained before the US Bankruptcy Court confirms its restructuring plan.
This will allow the release of about $4.53bn of the group’s debt, a rights offering to raise $800m and the provision of $1.46bn in new debt financing, Cineworld said.
In a statement, the company said: “Cineworld continues to operate its global business and cinemas as usual without interruption and this will not be affected by the entry of Cineworld Group plc into administration.”
The exhibitor said its brands – including Regal, Cinema City, Picturehouse and Planet – continue to welcome customers to cinemas as usual and that it will honour the terms of all existing customer membership programmes, including Regal Unlimited and Regal Crown Club in the United States and Cineworld Unlimited in the UK.
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