British cinema chain Cineworld Group (LON:CINE) PLC (OTC: CNNWF) is expected to file a chapter 11 (bankruptcy) petition in the U.S. and will follow suit with an insolvency proceeding in the U.S., the Wall Street Journal reported.
Law firm Kirkland & Ellis LLP and consultants from AlixPartners are said to be advising the company on the bankruptcy proceedings.
The company was badly hit in 2020 as about 800 of its theaters were shut following the spread of the COVID-19 pandemic and was helped by creditors to manage operations.
“Despite a gradual recovery of demand since re-opening in April 2021, recent admission levels have been below expectations,” the company said.
It added that despite the hit films like Top Gun: Maverick, not enough big films were hitting the cinemas to make its operations viable.
Cineworld had a net debt of $8.9 billion at the end of 2021 against a fiscal revenue of $1.8 billion.
In contrast, the CEO of AMC Entertainment Holdings Inc (NYSE: AMC), Adam Aron, while noting Cineworld’s situation, said he is quite optimistic about the increasing demand for AMC’s portfolio of movie theatres in 4Q FY22. He said AMC ended 2Q FY22 with $1 billion in liquidity.
“Our new AMC Preferred Equity Security, which begins trading on the New York Stock Exchange on Monday, August 22, 200, should also make us a much stronger company,” he added.
Price Action: CNNWF shares are trading lower by 46.35% at $0.063 on the last check Friday.
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