Cineworld to emerge from bankruptcy in July – but still nothing for shareholders
Cineworld, the bruised and battered cinema chain which has been going through Chapter 11 bankruptcy in the US for months, has announced this morning it believes it will re-emerge as a going concern in July.
The chain, which has been able to keep its cinemas open throughout, has agreed a restructuring agreement with lenders, it told markets in an update this morning.
Shareholders however appear set to be wiped out, however.
“In light of the level of existing debt that is proposed to be released under the Group Chapter 11 Companies’ plan of reorganisation, the Proposed Restructuring does not provide for any recovery for holders of Cineworld’s existing equity interests,” the statement read.
The chain failed to recover from the Covid-19 pandemic’s impact on the leisure and hospitality industry, with rolling lockdown restrictions severely restricting trade over a two-year period.
Chapter 11 is effectively a process which allows firms a grace period to work through alternative arrangements when in financial difficulty.
The group operates cinemas under the brand name Cineworld, Regal, Cinema City, Planet and London middle-class favourite Picturehouse.
The cinemas will remain open as usual.
Earlier this year Cineworld announced plans to sell either its UK and US operations or its rest-of-world operations, but both plans were eventually ditched.