Cineworld shares gained 3.9% to 4.23p in early morning trading on Monday, despite confirmation the company was considering bankruptcy proceedings.
The popular cinema chain announced it was currently searching for options to salvage the company, and were evaluating avenues to obtain additional liquidity and potentially restructure its balance sheet via a comprehensive deleveraging transaction.
Cineworld pinned the blame for its lacklustre balance sheet on a poor supply of big screen offerings, with major releases including Thor: Love and Thunder and Top Gun: Maverick failing to attract audience numbers back to the cinema post-Covid.
The Wall Street Journal reported the chain was considering a voluntary Chapter 11 filing for bankruptcy in the US and similar proceedings in other jurisdictions on Friday last week, citing sources close to the issue.
Cineworld commented: “Any such filing would be expected to allow the Group to access near-term liquidity and support the orderly implementation of a fully funded deleveraging transaction.”
“Cineworld would expect to maintain its operations in the ordinary course until and following any filing and ultimately to continue its business over the longer term with no significant impact upon its employees.”
“As previously announced, any deleveraging transaction would, however, result in very significant dilution of existing equity interests in Cineworld.”
Meanwhile, the franchise confirmed its Cineworld and Regal theatres would remain open for business, and would “continue to welcome guests and members.”