Cineworld to file for administration but screens will remain open

Cineworld Credit: PA

Cineworld is to file for administration in the UK but screens will remain open.

The troubled cinema chain said it will apply for administration for the London-listed company in July, which will see shares in the firm suspended.

It stressed cinemas will remain open as usual in Britain.

It has 128 branches across the UK and Ireland, and is the world’s second-largest cinema.

Cineworld filed for Chapter 11 bankruptcy in the US last year after being weighed down by huge debts and lower than expected audience numbers.

The group, which also owns the Picturehouse brand, is moving forward with plans to restructure its roughly $5billion (£3.9 billion) debt pile to allow it to exit bankruptcy.

It aims to reduce debts by around $4.53billion (£3.6 billion) with a plan to raise $800million dollars (£628millio) through a rights offering, while also securing $1.46billion (£1.1 billion) of new debt financing.

The restructuring plan is set to wipe out shareholders in order to support its lenders and creditors.

Shares fell by more than a quarter in Monday morning trading following the news of the administration plans.

The stock has already plummeted by almost 99% over the past five years, after being hit hard by the pandemic which forced it to close over 100 of its sites.

Cineworld said: “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 and its brands around the world – including Regal, Cinema City, Picturehouse and Planet – are continuing to welcome customers to cinemas as usual.

“The group continues to honour the terms of all existing customer membership programmes, including Regal Unlimited and Regal Crown Club in the United States and Cineworld Unlimited in the UK.”

In April, the group also scrapped plans to sell its businesses outside the UK, US and Ireland after potential bidders failed to meet the value desired by Cineworld’s lenders.

It hopes to emerge from bankruptcy protection in July after receiving backing for its overhaul from most of its lenders.

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