Cineworld is heavily indebted and faces a drop in box office earnings this quarter.
The statement follows today’s reports that Regal Cinemas’ UK parent company is preparing to file for bankruptcy. Cineworld earlier this week noted “active discussions with various stakeholders,” adding that it “has the potential to acquire additional liquidity and restructure its balance sheet through comprehensive deleveraging deals. “Strategic Options” and foretold the possibility of Chapter 11.
“All Cineworld and Regal theaters are operating as normal and continue to welcome guests and members to cinemas around the world,” Cineworld added today.
“As announced earlier this week, we are actively evaluating strategic options to ensure the strength and flexibility of our balance sheet to adapt to market conditions, and that process continues. We are committed to our guests’ experience and to being the “Best Place to See a Movie”. “
Huge debt combined with a soft box office, and possibly a possible payment to a Canadian cineplex, is weighing down.Canadian court rules in favor of Cineplex in breach of contract lawsuit, seeking $1 billion in damages
No one believes bankruptcy means saying goodbye to Cineworld. Alamo Drafhouse (albeit on a very small circuit) is expanding rapidly, establishing a new kind of post-Covid theater experience after going bankrupt a year ago.
The exhibition has a history of liquidation through bankruptcy. In the early 2000s, Regal merged with United Artists and Edward Theaters.
“We’ve seen job cuts like this in the past. It’s not about the death of the exhibition business,” said one industry executive.
The Chapter 11 chatter, first reported by the WSJ, hit the film’s share hard, whether it’s fair or not. Worst to Best of the Day: National Cinemedia plunges 8.7% to $50. AMC Entertainment is down 7% to $17.91. Cinemark fell 4% to $16.35, while Imax and Marcus fell 3.2% to $15.76 and 1.61% to $17.25, respectively.
AMC is also facing a downtrend in meme stocks today after iconic retail investor Ryan Cohen unexpectedly sold his stake in another stock, Bed Bath & Beyond. Having narrowly avoided bankruptcy many times during Covid, its cash position is now significantly strengthened and it is about to start trading a new class of preferred securities called APES on Monday.
A theatrical apocalyptic is quick to show up at any sign of trouble.
“The story is very over the top. There will be restructurings. Cineworld will not go out of business. Cineworld will probably keep its best assets and have the least impact on the industry,” said MKM Partners analyst Eric Handler.
“I think we’ll have to see how much change our creditors want. Maybe they’ll force the sale of some theaters. ‘, he said.
He and others said Cineworld is eyeing bankruptcy because it over-utilized its balance sheet with Regal, which it bought for $3.6 billion in 2017.
“AMC has ample liquidity, as do Cinemark and Marcus. It’s very self-serving,” Handler said.
Imax and National Cinemedia may get more exposure. Imax because the screen is installed in the Regal Theater. But bankruptcy to rebuild means closing the most unproductive theaters, usually not where the Imax Auditorium is located.
Executives from AMC, Cinemark and Marcus recently acknowledged a current shortage of new wide-release studio products, but said they could weather the August-September drought caused by post-production delays. indicated in the report. This year has proven that audiences are happy to return to theaters.Downtime is black adam, Black Panther: Wakanda Forever, When Avatar: Path of Water Released in October, November and December.
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