Cineworld confirms it is considering bankruptcy

Cineworld has confirmed it is considering filing for bankruptcy in the US, as the cinema chain continues to struggle with $5bn worth of debt.

But the company, which also owns the Picturehouse chain in the UK, insisted its cinemas "remain open for business" and that there would be "no significant impact" on jobs.

Cineworld employs more than 28,000 people globally.

Like other cinema chains, Cineworld was hit hard by the pandemic.

Many theatres were forced to close for extended periods during the lockdowns, or had to operate at a reduced capacity due to social distancing rules.

Cinema chains had hoped blockbusters such as the latest Bond film, Top Gun: Maverick and Thor: Love And Thunder would draw audiences back in after lockdown restrictions eased.

Top Gun: Maverick, starring Tom Cruise, has taken $1.8bn at the global box office, making it one of the top 10 highest grossing films of all time.

But last week, Cineworld warned there had still not been enough major releases to attract cinema audiences and said this was hitting admissions.

In 2019 before the pandemic, global box office takings hit a record $42.5bn according to Comscore, buoyed by films such as Avengers: Endgame and Frozen 2.

So far in 2022, films such as Jurassic World Dominion and Minions: The Rise of Gru have performed strongly.

But box office takings this year are down by around a third, or 32%, compared with 2019.

Cinema chains have also been facing tough competition from streaming services, which soared in popularity during the lockdowns.

In 2020, a row broke out when Cineworld and rival AMC, which owns the Odeon Cinemas chain, criticised Universal Pictures for releasing Trolls: World Tour online at a time when theatres were forced to close because of coronavirus.

Cineworld subsequently signed a deal with Warner Bros to show films in theatres before they are streamed.

More recently, Netflix reported a sharp fall in subscribers, as the rising cost of living leads to people cutting back.

On Friday, shares in Cineworld plunged 60% after The Wall Street Journal reported that the firm was preparing to file for bankruptcy "within weeks".

Cineworld said on Monday it was looking at various options for how to restructure the business, including a Chapter 11 filing in the US.

This allows a company to continue to operate while it negotiates with its creditors.

The company would not comment on whether it was also considering entering liquidation in the UK, or what the potential impact could be on its 4,600 employees there.

It also would not be drawn on what will happen to people who pay for Cineworld or Picturehouse membership, or who have vouchers, in the event of it filing for bankruptcy.

In a statement, the firm said: "Cineworld would expect to maintain its operations in the ordinary course until and following any filing and ultimately to continue its business over the longer term with no significant impact upon its employees."

Cineworld has 128 cinemas in the UK and Ireland. Globally, it has 9,189 screens across more than 750 sites.

It operates in 10 countries, including the US, Poland and Israel.

Cineworld currently has a market value of around $69m but is carrying close to $5bn of debt.

The firm has expanded through acquisitions around the world. However, two years ago it ditched a plan to take over Cineplex, leading to a protracted legal battle as the Canadian firm sought substantial damages from Cineworld.

Shares in Cineworld recovered slightly on Monday morning. But at just over 4p, the share price is still a long way off from where it was at the start of 2020 when it reached 220p before the pandemic struck.