Regal Owner Cineworld Nears Bankruptcy as Theater Comeback Lags

Cineworld Group Plc, the owner of Regal Cinemas, is preparing to file for bankruptcy within weeks after struggling to rebuild attendance from pandemic lows, WSJ Pro Bankruptcy reported. The British cinema company has engaged lawyers from Kirkland & Ellis LLP and consultants from AlixPartners to advise on the bankruptcy process, these people said. Cineworld is expected to file a chapter 11 petition in the U.S. and is considering filing an insolvency proceeding in the U.K., they said. Cineworld said on Wednesday that despite a gradual recovery in attendance since reopening theaters last year, recent admissions have lagged below expectations due to a limited film slate. The company is evaluating strategic options to generate liquidity and potentially restructure its balance sheet through a comprehensive deleveraging transaction, it said. Any such deleveraging likely will be highly dilutive to shareholders, Cineworld said. The company is negotiating with its lenders to fund the costs of the bankruptcy process, according to a person familiar. Cineworld and Kirkland didn’t immediately respond to requests for comment. AlixPartners declined to comment. The London-based chain narrowly escaped bankruptcy in 2020 after landing a lifeline from creditors while its nearly 800 theaters were shut due to Covid-19 restrictions. (Subscription required.) Read more.