Sat. Oct 1st, 2022

As the movie theatre company continues to struggle with $5 billion in debt, Cineworld has acknowledged that it is thinking about declaring bankruptcy in the US.

The corporation, which also owns the Picturehouse chain in the UK, stated that there would be “no substantial impact” on employees and that its theatres would “stay open for business.”

Around the world, Cineworld has more than 28,000 employees.

Cineworld, like other movie theatre businesses, suffered greatly from the epidemic.

Due to social distance laws, several theatres had to close for protracted periods of time during the lockdowns or operate at a reduced capacity.

Tom Cruise’s Top Gun: Maverick, one of the top 10 highest-grossing movies of all time, has earned $1.8 billion worldwide.

However, Cineworld cautioned last week that there weren’t enough blockbuster movies being released to draw moviegoers, and that this was hurting admissions.

According to Comscore, worldwide box office receipts in 2019 reached a record $42.5 billion before the outbreak, helped by movies like Avengers: Endgame and Frozen 2.

Movies like Jurassic World Dominion and Minions: The Rise of Gru have done well so far in 2022.

But when compared to the same period in 2019, box office receipts are down by around a third, or 32%.

Streaming services, whose popularity rose during the lockdowns, have also been posing a serious threat to movie theatre chains.

When Universal Pictures released Trolls: World Tour online at a time when theatres had to close due to the coronavirus in 2020, Cineworld and rival AMC, which controls the chain of Odeon Cinemas, got into a spat.

In order to screen movies in theatres before they are streamed, Cineworld and Warner Bros later came to an agreement.

More recently, Netflix reported a steep decline in subscribers as a result of consumers making budget cuts due to the growing cost of living.

After The Wall Street Journal reported that Cineworld was poised to file for bankruptcy “within weeks,” the company’s shares fell 60% on Friday.

Cineworld said on Monday that it was considering a number of corporate restructuring alternatives, including filing for Chapter 11 in the US.

This enables a business to carry on operations as it bargains with its creditors.

The business declined to comment on whether it was also considering declaring bankruptcy in the UK or what effect it could have on its 4,600 UK workers.

It also declined to comment on what would happen to customers who paid for memberships at Cineworld or Picturehouse or who had gift cards in the event that the company declared bankruptcy.

“Cineworld would plan to retain its activities in the usual course until and following any filing,” the company said in a statement. “Cineworld would hope to continue its business over the longer term with no substantial impact upon its workers.”

In the UK and Ireland, Cineworld operates 128 theatres. It has 9,189 screens total, spread over more than 750 venues.

It is active in ten nations, including the United States, Poland, and Israel.

Although Cineworld has a market value of only $69 million, it is over $5 billion in debt.

The company has grown through making acquisitions all across the world. However, it abandoned a proposal to acquire Cineplex two years ago, sparking a long legal dispute in which the Canadian company demanded significant compensation from Cineworld.

On Monday morning, Cineworld’s stock price marginally increased. However, the share price is still far from where it was in the beginning of 2020, when it hit 220p before the pandemic struck, at little over 4p.

By adele rose

Adele Rose is the senior editor and employee of WGBS Pvt Ltd Digital wing.

Leave a Reply

Your email address will not be published.