Regal Cinema chain is preparing to file for chapter 11 bankruptcy.
According to the Wall Street Journal, the chain’s owner Cineworld Group is filing for bankruptcy in the United States and insolvency in the United Kingdom. Since the COVID-19 pandemic, the London-based company has struggled to recover the losses.
The bankruptcy protection will allow Regal to continue to operate while securing capital needed to recover box office revenue.
“As we announced earlier this week. We are proactively evaluating strategic options to ensure we have the balance sheet strength and flexibility to adapt to market conditions, and that process remains ongoing. We are committed to our customer’s experience and to being the ‘Best Place to Watch a Movie,’” Cineworld says.
Cineworld was hopeful that they could recover with a slew of 2022 blockbusters, including The Batman, Top Gun: Maverick, Thor: Love and Thunder, and Minions: The Rise of Gru. However, the ticket sales were lower than what they had anticipated.
“Despite a gradual recovery of demand since re-opening in April 2021, recent admission levels have been below expectations,” the company adds. “These lower levels of admissions are due to a limited film slate that is anticipated to continue until November 2022 and are expected to negatively impact trading and the group’s liquidity position in the near term.”
Cineworld had an extremely high-debt for years. At the end of 2021, Cineworld’s debt was roughly $5 million.