LONDON, Sept 8, 2022 (BSS/AFP) - Britain's Cineworld, the world's second
biggest cinema chain, announced Wednesday that it has filed for bankruptcy
protection in the United States as it seeks to restructure after facing low
audience numbers.

The group, which operates hundreds of movie theatres in the United States,
said in a statement that it filed for Chapter 11 at a bankruptcy court in
Texas.

Chapter 11 of the US bankruptcy code is a court-supervised restructuring
process that provides companies time to negotiate with its creditors to reach
a settlement on the reduction of debts.

Cineworld said it "will seek to implement a de-leveraging transaction that
will significantly reduce the Group's debt, strengthen its balance sheet and
provide the financial strength and flexibility to accelerate, and capitalise
on, Cineworld's strategy in the cinema industry."

The statement said it hoped to emerge from bankruptcy proceedings in the
first quarter of next year, and had $1.94 billion in financing from existing
lenders to help it
through that period.

The company also warned existing shareholders that their holdings would
likely be considerably diluted as part of the bankruptcy process.

Eric Snyder, a bankruptcy expert at Wilk Auslander, said Cineworld's
creditors aren't giving them "a lot of time to make the decision between
reorganizing or selling it".

A big problem for the company is that "travelling to a movie theatre to watch
a movie for two to three hours, and spending $20 to $25, is just not
attractive anymore for a lot of people, especially young people," Snyder
added.

Cineworld's shares had been sliding since the beginning of the year as the
company's position deteriorated when people didn't return to cinemas in
droves after Covid lockdowns were eased.

They plummeted last month when the company acknowledged it was considering
filing for bankruptcy.

Cineworld shares rose 10 percent on Wednesday to 4.29 pence, but were still
down 87 percent from the start of the year.

Analysts argue that Cineworld's 2018 takeover of American peer Regal left it
saddled with too much debt, putting it in a poor position to weather the
pandemic.