The Cineworld Group has confirmed that filing for bankruptcy in the United States is a possible option as it continues to struggle with $5 billion in debt, according to the BBC report.
Like many cinema chains in the world, Cineworld was severely affected by the pandemic. Cinemas were forced all around the world to close for longer period or to reduce the operational capacity due to social distancing rules. The strong competition and the increased popularity of streaming providers made the situation of the sector even more difficult by the pandemic period.
A couple of weeks ago, after The Wall Street Journal reported the company is close to bankruptcy, the share price fell by 60 percent. It is not yet known whether the bankruptcy proceedings will be extended by the company to its interests operating in the United Kingdom.
The company said there will be expectedly no significant impact upon its employees. More than 28,000 employees work at the company globally.
The company has operation in 10 countries including the United States and the United Kingdom, its net debt was $5 billion at the end of 2021, which still does not include $4.84 million lease liabilities. Additionally, Cineworld might face billion dollars liable due to the failure of the Cineplex deal.
Cineworld said possible financing or restructuring of its balance sheet is under discussion, because of which the shareholders are at risk due to significant dilution.