(CNN) — Cineworld Group — the world’s second largest movie theater chain and owner of Regal Cinemas — said Wednesday that it has filed for Chapter 11 bankruptcy protection.
The British company, which owns more than 500 movie theaters across the United States, said that it commenced Chapter 11 proceedings in the United States Bankruptcy Court for the Southern District of Texas to shed company debt. It also expects the action will “strengthen its balance sheet and provide the financial strength and flexibility to accelerate, and capitalize on, Cineworld’s strategy in the cinema industry.”
The company added that it has access to nearly $2 billion in financing from existing lenders to keep operating. Cineworld also said in the filing that it “expects to operate its global business and cinemas as usual throughout this process.”
The company warned late last month that a voluntary Chapter 11 filing was one of the options it was reviewing to reduce its debt.
“We have an incredible team across Cineworld laser focused on evolving our business to thrive during the comeback of the cinema industry,” Mooky Greidinger, Cineworld’s CEO, said in a statement on Wednesday. “The pandemic was an incredibly difficult time for our business, with the enforced closure of cinemas and huge disruption to film schedules that has led us to this point.”
Greidinger added that the bankruptcy filing is “part of our ongoing efforts to strengthen our financial position and is in pursuit of a de-leveraging that will create a more resilient capital structure and effective business.”
“This will allow us to continue to execute our strategy to reimagine the most immersive cinema experiences for our guests through the latest and most cutting-edge screen formats and enhancements to our flagship theatres,” he added. “Our goal remains to further accelerate our strategy so we can grow our position as the ‘Best Place to Watch a Movie.'”
Like many theaters, Cineworld has struggled during the pandemic, which devastated the industry and is still impacting exhibition. The global health crisis caused theaters around the world to close and the company lost $2.7 billion in 2020 and another $566 million in 2021.
The economics have improved for theaters, but a return to normal is still far off.
The domestic box office rebounded this summer thanks to big hits like “Top Gun: Maverick” and “Jurassic Park: Dominion” as well as smaller hits like “Elvis” and “The Black Phone.” Yet, movie attendance has dried up in recent weeks amid a dearth of new films and supply chain issues hitting Hollywood and many features going straight to streaming.
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