2:39 PM August 22, 2022
3:57 PM August 22, 2022
The company behind cinemas in north and east London is considering bankruptcy as it faces heavy debts – but says it would expect to continue business as usual.
Cineworld has cinemas in Wood Green, Wembley, Ilford and West India Quay.
It also owns the Picturehouse chain, which has venues in Crouch End, Finsbury Park, Hackney and Stratford.
It is the second largest cinema chain in the world but it is looking at options for restructuring the business, which is struggling its debts.
This might lead to a Chapter 11 bankruptcy filing in the US. Chapter 11 is often referred to as reorganisation bankruptcy and does not mean the end of the line for the company.
Firms including General Motors and Marvel Entertainment have in the past made Chapter 11 filings, only to bounce back later.
The announcement from Cineworld came days after the Wall Street Journal first reported that the company was on the verge of declaring it is bankrupt.
– Credit: PA
A Chapter 11 gives companies a chance to propose a reorganisation, and the banks, suppliers and employees they owe money to are allowed to vote on the plan.
After the filing is made, the company remains in control of its assets and does not have to shut down or liquidate its business to pay off debts.
It is also protected from foreclosure and repossessions.
“Cineworld and Regal theatres globally are open for business as usual and continue to welcome guests and members,” the company told shareholders.
“The strategic options through which Cineworld may achieve its restructuring objectives include a possible voluntary Chapter 11 filing in the United States and associated ancillary proceedings in other jurisdictions as part of an orderly implementation process.
“Cineworld is in discussions with many of its major stakeholders, including its secured lenders and their legal and financial advisers.”
The company’s cinemas would be able to continue trading.
It brings some respite for workers at the 127 cinemas that Cineworld runs in the UK, which include the Picturehouse chain.
It has been a tough couple of years for anyone in the cinema business, despite recent blockbuster releases such as Top Gun: Maverick, The Batman and Thor: Love And Thunder. Last week Cineworld told investors that, while demand has recovered a little following the pandemic, recently customers have not been flocking to cinemas in the numbers that had been expected.