By Aby Jose Koilparambil
(Reuters) -Cineworld will focus on a sale of the group as a whole rather than individual assets, the British cinema operator said on Tuesday, sending the troubled company's shares sharply lower.
The world's second-largest cinema group filed for U.S. bankruptcy protection in September to try to restructure its debt and strengthen its balance sheet as the industry navigates a bumpy road to recovery after COVID-related restrictions and shutdowns battered the sector.
The company, the finances of which were also bled by aggressive expansion including its move into the United States, has warned that any restructuring or sale will result in significant dilution of equity interests with no guarantee of recovery for existing investors.
"Shareholders have been told on numerous occasions that their investment could be significantly diluted ... so the situation is more about getting back pennies in the pound rather than waiting for a big payday," AJ Bell investment director Russ Mould said in a note.
Cineworld shares plunged 20% to a more than two-month low of 2.9 pence.
The company, which announced a settlement agreement with its landlords and lenders in October, said it expects to begin approaching potential buyers this month.
Global market leader AMC Entertainment last month said it was no longer in talks to buy some theatres owned by Cineworld. Shares in the New York-listed group gained about 3% in early trade on Tuesday.
Cineworld forecast in September that admissions would remain below pre-pandemic levels over the next two years.