Regal Cinemas owner Cineworld says shareholders will be wiped out

By Olesya Dmitracova, CNN

Regal Cinemas owner Cineworld, which filed for Chapter 11 bankruptcy protection last year, said Friday that it expected shareholders to be wiped out entirely, meaning they should not expect to recover any funds from a restructuring or sale of the business.

The world’s second-largest movie theater chain — hit hard by the pandemic, like many cinema operators — has been in talks with its “key stakeholders” to develop “a plan of reorganization” that would allow it to emerge from bankruptcy, it said in a statement.

Cineworld said it had also received a number of non-binding proposals to buy some or all of its business, but none of them involved an all-cash bid for the entire company.

“Based on the proposals received to date, it is not expected that any sale transaction will provide any recovery for the holders of the company’s equity interests,” it said.

The same would apply to a restructuring “in light of the level of existing debt that is expected to be released under any plan,” it added.

Cineworld shares have lost nearly 98% of their value over the past two years. The stock plunged more than 40% in early trading in London. By 7 a.m. ET, it was down 29%.

The British company continues to operate its theaters around the world as usual, it reiterated in its statement on Friday. Last month, Cineworld announced it was closing 39 more movie theaters in the United States. Around 500 remain across the country.

The pandemic forced movie theaters around the globe to close, dealing a devastating blow to Cineworld and others in the industry, and is still affecting visitor numbers. The company lost $2.7 billion in 2020 and another $566 million in 2021. It reported another loss, of $294 million, in the six months ending in June 2022.

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