Cineworld, the UK cinema chain, is set to file for administration as part of a restructuring plan that will result in its shareholders losing their investments. This move comes after the company filed for bankruptcy protection in the US last year due to mounting debts and declining audience numbers following the pandemic. Although Cineworld’s UK operations will be affected by the administration process, the company assures that its cinemas will remain open.
A spokesperson for Cineworld stated, “Cineworld continues to operate its global business and cinemas as usual without interruption and this will not be affected by the entry of Cineworld Group plc into administration. The group’s various brands, including Regal, Cinema City, Picturehouse, and Planet, are still providing their usual cinema experiences to customers.”
To address its $5 billion (£3.9 billion) debt burden, Cineworld has initiated a debt restructuring plan. This plan involves raising $800 million through a rights offering and securing an additional $1.46 billion in new debt financing. The company’s lenders are taking over control of the business as a result.
Over the past five years, Cineworld’s shares have experienced a significant decline of over 99%. This decline accelerated during the pandemic when the company was forced to close numerous cinema locations.
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