By Yadarisa Shabong
(Reuters) -Cineworld said on Friday its shareholders may see the value of their equity wiped out as it looks to exit from Chapter 11 bankruptcy protection after it failed to find a buyer for the whole of the world's second biggest cinema chain.
It said it had received initial proposals from a number of counterparties but none offered an all-cash bid for the entire company.
"In light of the level of existing debt that is expected to be released under any (reorganisation) plan, the Company does not believe that there will be sufficient creditor support for a Plan that contemplates any recovery for equity interests," it said in a statement.
"No bid came near the $6 billion of secured indebtedness that exists on the company's balance sheet today," Kirkland & Ellis lawyer Joshua Sussberg, representing Cineworld, had said on Tuesday.
Cineworld said talks with certain stakeholders about a possible plan of reorganisation were ongoing in parallel with a potential sale of assets, but neither path would see shareholders recover their equity interest.
Its already battered shares - 99% off their peak above 310 pence in May 2017 - were down 29% on Friday at 2.98 pence by 0922 GMT.
Cineworld expects to emerge from Chapter 11 bankruptcy in the first half of 2023.
It had proposed an April 10 deadline for final bids, with an auction, if necessary, to follow on April 17.
Cineworld filed for U.S. bankruptcy protection in September to try to restructure its debt after being hurt by the pandemic and a lack of blockbuster movies.
Its finances were already under strain by debt it took on to purchase U.S. Regal Entertainment in 2017.
Cineworld had a net debt of $8.81 billion as of June 30, 2022, including lease liabilities, while its cash reserves had dwindled to $131 million.
Cineworld in the past few years has also faced tussles with disgruntled former investors of Regal and legal claims from its scrapped $1.65 billion takeover of Canada's Cineplex.
There has also been discontent over bonuses paid out to CEO Mooky Greidinger and his brother and deputy, Israel.
Larger rival AMC Entertainment Holdings in December had said its talks to buy some theatres owned by Cineworld had fallen through.
Sky News reported earlier this month that London-based cinema operator Vue International, with support from two funds, would be among the bidders for Cineworld.