The world’s second-largest chain of cinemas, Cineworld, continues to fall in the UK stock market by more than 80% after the Wall Street Journal (WSJ) reported that the company plans to seek protection, citing sources that familiar with the case against creditors in the US in the coming weeks.
According to the US publication, Cineworld has already hired the law firm Kirkland and Ellis ELP and the consulting firm AlixPartners to trigger the “chapter 11”. The Wall Street Journal also adds that the company wants to start a similar process in the United Kingdom.
Cineworld’s official source, contacted by the WSJ, forwarded all clarifications to the statement released this Wednesday by the world’s second-largest chain of movie theaters. In the note, the company led by Mooky Greidinge says a restructuring process is underway to alleviate debt.
The company is “in discussions with various stakeholders and is evaluating the various strategic options to obtain liquidity and potentially restructure its balance sheet,” the statement clarified. “Any unleveraged transaction will result in a significant dilution of Cineworld’s interests,” the statement added.
The number of acquisitions, combined with the removal of spectators from cinemas in the wake of the pandemic, led Cineworld to build up debt.
Shares in the world’s second largest cinema chain continue to fall 69.24% to 2,999 pounds (about 3.53 euros at the current exchange rate), after falling 82% during the session. Since the start of Friday’s session, Cineworld has lost 9,272 million pounds (10.9 million euros) on the stock market.