Regal Cinemas’ owner is preparing to file bankruptcy according to a recent report. The Wall Street Journal details how Cineworld is handling the current moment. The company is reportedly planning to file a chapter 11 petition in the United States. Over in the United Kingdom, they are considering filing for an insolvency proceeding. Their sources indicated that the chain is having trouble getting attendance all the way back up from the lows of the pandemic. Cineworld itself mentioned the troubles stretching back to theater reopening. Admission aren’t up to where projections had them at this point in the year. The limited slate of films certainly has something to do with it. But, the movie industry has fared better than expected since the doom and gloom proclamations of early 2020. The chain’s lender will likely fund the costs of this bankruptcy process. Strategic options to cut costs would include generating luquidity through selling off assets and restructuring debt. It’s unclear what would step into the void if the second biggest United States movie chain ended up shutting its doors for good.
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Back in 2020, Cineworld avoided bankruptcy due to an investment from creditors that saved the chain. But, if things are going like this now, the path forward becomes murky. Over at AMC, things are going a little bit better. The meme stock craze of the mid-pandemic injected some life into the company. But, Cineworld Chief Executive Mooky Greidinger told The Wall Street Journal that every company didn’t have the good fortune to be lifted out of trouble by Internet goofiness.
“I think what happened to them is a very good thing for AMC. And you know, we are traded in the U.K. market. Not every stock in the U.S. market is a meme stock. And I think that AMC did well with it,” he began. “They handled the situation in a good way. And I think that investors will see the conduct of the industry and will see the way we are performing, and we will see this in our share price. Are we going to become a meme stock? I don’t think so.”
“There are pluses and minuses in every thing in life. I will not give you a straight answer. Of course I would love my shares to be much higher than they are today. But you know, in everything like this there is also an element of risk,” Greidinger continued. “I am happy for AMC that they are doing well. At the end of the day, with all of the competition in the industry, I don’t think that any industry wants to see one of the huge players of the industry falling down. This isn’t positive news for anyone.”
What do you think will happen to Regal Cinemas? Let us know down in the comments!
