Cineworld Group Plc explored options including a secondary US listing, selling non-US assets, merging with a rival, and a SPAC deal, but ultimately had no choice but to file for bankruptcy with less than $4 million cash on hand, according to Deputy Chief Executive Officer Israel Greidinger.
(Bloomberg) — Cineworld Group Plc explored options including a secondary US listing, selling non-US assets, merging with a rival, and a SPAC deal, but ultimately had no choice but to file for bankruptcy with less than $4 million cash on hand, according to Deputy Chief Executive Officer Israel Greidinger.
The world’s second-largest cinema chain filed for Chapter 11 bankruptcy protection in Texas on Wednesday to pay off heavy debts, finance future operations, and “rationalize its theater portfolio,” Greidinger said in the court documents. Enforced Covid-19 theater shutdowns froze the group’s income stream and its ability to pay for costs including billions of dollars in debts incurred when it bought US company Regal in 2018.
Cineworld’s biggest rival, AMC Entertainment Holdings, Inc., had a very different pandemic, benefiting from a more-than-2,500% surge in its share price in the first half of 2021, fueled by retail investors on social media platforms like Reddit piling into so-called ‘meme’ stocks. The US theater chain replenished its coffers by issuing equity at heightened prices, and although AMC has now lost a lot of the gains from that rally, the business remains more valuable than before the pandemic struck.
London-based Cineworld publicly floated the idea of a secondary US listing in August 2021, but never went ahead with the possible plan.
“While Cineworld would, of course, have welcomed the liquidity of becoming a ‘meme stock’ like AMC, we were never so lucky!” Greidinger said in the filing.
Greidinger’s family owns about 20% of Cineworld and has lost more than £1 billion ($1.15 billion) held in trust, he added in a statement which tells the story of his family’s history in the cinema business going all the way back to 1930.
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