British company Cineworld Group said in a statement that a “voluntary Chapter 11 filing in the United States” was one of the options it was reviewing in an attempt to reduce its debt burden.
Meanwhile, Cineworld and Regal theaters were open for “business as usual,” it added, and would remain so.
“Cineworld would expect to maintain its operations in the ordinary course until and following any filing and ultimately to continue its business over the longer term with no significant impact upon its employees,” the company said in the statement issued in response to reports last week.
Cineworld said earlier last week that, despite a “gradual recovery of demand” since last spring, admissions were below expectations.
A Chapter 11 filing would give the company more time to restructure its debt and make a proposal to the bankruptcy court, while continuing to operate. Many large American companies have used Chapter 11 successfully to put their businesses on a firmer financial footing.
Cineworld, which owns more than 500 movie theaters across the United States as well as Picturehouse Cinemas in the United Kingdom, reiterated Monday that any “deleveraging transaction” would result in “very significant dilution of existing equity interests” for Cineworld shareholders.
“Cineworld’s evaluation of these strategic options remains ongoing. A further announcement will be made if and when appropriate,” it added.
Cineworld stock has recovered slightly since Friday’s rout but is still trading nearly 60% below its closing level on Thursday.
— Anna Cooban and Frank Pallotta contributed reporting.
