Cineworld has filed for bankruptcy in the United States, as things go from bad to worse for the beleaguered cinema chain.
The cinema chain announced last month that it was voluntarily seeking a Chapter 11 bankruptcy filing in the US, sending shares down 25 per cent.
Shares in Cineworld have been in freefall in the past few weeks, with shares down nearly 80 per cent in the past month, as it struggles with nearly $4.8bn of debt taken on prior to the pandemic.
The company has total debt of £7.5bn, as well as a £800m legal bill over a deal to buy Canadian rival Cineplex.
City A.M. reported last week that a major shareholder in Cineworld has shed almost the entirety of his stake.
According to filings on the London Stock Exchange, the firm’s second largest shareholder, Chinese tycoon Zai Wang Liu’s firm Jangho Group, slashed its stake from 11.6 per cent to just 1.6 per cent last week.
Wang Liu previously amassed a stake of 13.8 per cent of the firm in 2020 when he took advantage of its depressed share price to scoop up shares.
Cineworld, which has 127 branches in the UK and also owns the Picturehouse chain, was revealed last week to have also misidentified its largest shareholder in its latest set of accounts as it struggles to keep track of its complex and changing investor base.
Its largest shareholder is the family of Mooky and Israel Greidinger, who serve as chief executive and deputy chief executive respectively.
Shares jumped 10 per cent this afternoon following the news of the bankruptcy.