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Cineworld Group PLC (CINE.L), a leading global operator of movie theaters, is considering bankruptcy protection, including a Chapter 11 filing in the United States. Based in the United Kingdom, Cineworld is the second-largest cinema business in the world, based on the number of screens. It operates in 10 countries with 751 sites and 9,189 screens. Cineworld’s U.S. segment includes three cinema chains: Regal, United Artists, and Edwards Theatres.
The announcement from Cineworld acknowledges that theater admissions have been unexpectedly slow to recover in the aftermath of lockdowns imposed during the COVID-19 pandemic and that the sluggish recovery is likely to persist at least until November 2022, due to a slowdown in new film releases. Press reports indicate that, as a result, the company is straining to keep up with its debt payments.
Cineworld’s announcement may be a bellwether for the film theater industry, including other major operators such as AMC Entertainment Holdings, Inc. (AMC), the worldwide leader. Earlier in 2022, AMC made the surprise announcement that it was diversifying into gold and silver mining.

In its most recent fiscal year, which ended on Dec. 31, 2021, Cineworld reported a net loss after tax of $565.8 million. While this was an improvement from the loss of nearly $2.7 billion recorded in 2020, it compares unfavorably with positive net income of $180.3 million posted in 2019.
Also indicative of a weak rebound in admissions following pandemic lockdowns, Cineworld's revenue in 2021 was $1.8 billion, down by 59% from the figure of $4.4 billion recorded in 2019. In 2020, revenue had sunk to $852.3 million.
Meanwhile, long-term debt incurred by Cineworld has ballooned from nearly $3.5 billion at the end of 2019 to slightly over $5.0 billion at the end of 2021. This represents an increase of 44%.
Besides a possible voluntary Chapter 11 filing in the United States, Cineworld is considering similar proceedings in other jurisdictions. Cineworld also is in discussions with many of its major stakeholders. including its secured creditors. Additionally, it is undertaking initiatives to manage costs and to enhance liquidity.
Moreover, Cineworld is evaluating options to “restructure its balance sheet through a comprehensive deleveraging transaction.” In this vein, the company warns: “Any deleveraging transaction will likely result in very significant dilution of existing equity interests in Cineworld.”

Cineworld Group PLC. "Response to Media Speculation."
Cineworld Group PLC. "Update Regarding Current Trading, Liquidity Position and Capital Structure."
Reuters. "About Cineworld Group PLC (CINE.L)."
Cineworld Group PLC. "Key Facts."
The Wall Street Journal. "Regal Owner Cineworld Nears Bankruptcy as Theater Comeback Lags."
Cineworld Group PLC. "Annual Report 2021."
Reuters. "Cineworld Income Statement."
Reuters. "Cineworld Balance Sheet."
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