Cineworld, the second-largest cinema chain globally, has announced that it will file for administration in the United Kingdom to address its significant debts while keeping its screens open. Cineworld plans to reduce its USD $5 billion debt pile through the administration process. It assured customers that it would be “business as usual” and that the operations of its cinemas worldwide, including the Picturehouse chain in the UK, would not be affected. Despite the reopening of theaters and the release of major films like Spiderman: Across the Spider-Verse and The Little Mermaid, the company anticipates that admissions will remain below pre-pandemic levels in both 2023 and 2024.
With over 28,000 employees across 751 sites globally, including 128 locations in the UK and Ireland, Cineworld has faced significant challenges in the past year. It previously filed for bankruptcy protection for its Regal division in the United States, but hopes to emerge from this phase in the near future after restructuring its finances. The administration filing is a technicality stemming from coming out of the bankruptcy. The company will apply for administration in July, leading to the suspension of its shares and the erasure of existing shareholders. The restructuring process will reduce Cineworld’s debts by approximately $4.5 billion. The company has already generated $800 million through the sale of rights and will have access to an additional $1.46 billion if needed.
Cineworld had attempted to sell its businesses in the US, UK, and Ireland but was unable to find a buyer. Despite the challenges, Cineworld reported sales of $4.4 billion in 2019, the last full year before the pandemic, indicating the potential for recovery in the future.