The second cinema chain in the world is on the verge of bankruptcy

According to the Wall Street Journal, Regal Cinemas, the world’s second largest movie theater chain, is on the verge of bankruptcy as its shares fell 80% last Friday.

The crisis began after its parent company, CineWorld Group, announced it was preparing to close.

Apparently, the UK company has contacted the legal team of Kirkland & Ellis LLP to formalize the bankruptcy process in the US and UK.

The company’s delicate situation has dragged on since 2020, when it was forced to close due to isolation decrees due to the coronavirus pandemic.

At the time, the network had a loss of US$2.7 billion. Last year the loss was around $566 million.

This year, CineWorld aimed to recover 1/3 of its capital value before the pandemic, but it remains 60% below expectations.

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With 500 rooms spread across the United States alone, the chain has failed to stabilize and is exploring ways to reduce debt, which “would likely result in a very significant dilution of existing profit shares” for shareholders.

In a statement, CineWorld blamed a limited slate of films for the lack of moviegoers, a situation that could last until the end of November.

For now, the negotiations between the company and the lawyers are still in their early stages, so all that remains is to wait to find out the outcome of the situation.

Recalling that other cinema chains are also facing similar problems as the US North American box office was nearly 30% lower in the first half of this year compared to the same period before the pandemic.

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