Cineworld shares have built a base around 3p following the announcement of chapter 11 proceedings earlier in September as they attempt to bring a $5 billion debt pile under control.
The filing for chapter 11 bankruptcy covers a $1.94 billion debtor-in-possession financing facility from existing lenders to ensure the group can continue to restructure the business while operations remain uninterrupted.
Cineworld operate 747 sites and 9,139 screens globally following the ambitious acquisition of Regal Entertainment.
A slow return to the cinemas by an audience adapted to consuming movies during COVID-19 has ravaged the business hoping for a strong bounce back from the pandemic.
In addition, a low number of blockbuster releases meant cinema goers had little impetus to return to the cinemas in a world now dominated by streaming services.
Cineworld reported $1.8bn revenue in 2021, up from $852m in 2020, but this hasn’t been enough to provide the necessary cashflow to support their debt commitments.
Indeed, a growing trend of films to going straight to streaming services such as Netflix, Disney and Amazon Prime has long signalled trouble for cinemas.
However, those cinemas providing and more rounded entertainment and leisure experience such as Everyman have managed to grow by focusing on food offerings in a more intimate setting.
