(Alliance News) - Cineworld Group PLC on Wednesday late afternoon confirmed it was beginning Chapter 11 filing in US Bankruptcy Court in Texas.
The Picturehouse chain owner hopes the restructuring process will "significantly reduce" its debt, and strengthen its balance sheet and liquidity.
"As previously announced, it is expected that any de-leveraging transaction will result in very significant dilution of existing equity interests in the group and there is no guarantee of any recovery for holders of existing equity interests," it confirmed.
More positively, however, the firm does not expect to have to suspend trading of its shares on the London Stock Exchange.
It also noted it enters the Chapter 11 cases with commitments for around USD1.94 billion debtor-in-possession financing facility from existing lenders.
When combined with operational cashflow, and Cineworld's cash reserves, the financing facility is expected to "provide sufficient liquidity for Cineworld to meet its ongoing obligations, including post-petition obligations to vendors and suppliers, as well as employee wages, salaries and benefits programs".
It expects its businesses and cinemas across the globe "as usual without interruption" during the restructuring process.
"Cineworld currently anticipates emerging from Chapter 11 during the first quarter of 2023 and is confident that a comprehensive financial restructuring is in the best interests of the group and its stakeholders, taken as a whole, in the long term," Cineworld said.
It had first announced it was considering a Chapter 11 filing on August 22, and any deleveraging would likely result in a "very significant dilution" of its shares.
Cineworld shares saw some lively trading before the close on Wednesday afternoon, rising 11% to 4.33 pence each in London. The stock is down 79% over the past 30 days.
By Elizabeth Winter; elizabethwinter@alliancenews.com
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