Agencies-Gaza post
Cineworld files for bankruptcy in Texas
The Sunworld Group, a British movie theater group, filed for bankruptcy in the US state of Texas, in an attempt to reduce $5 billion of its accumulated debt.
Bloomberg news agency reported that the British-based group, which generates most of its revenues from the US market since its acquisition of Regal Cinemas in 2018, filed for bankruptcy under Chapter 11 of the US Companies Act on Wednesday.
Chapter 11 of the law allows a company to continue operating while it develops a plan to pay creditors.
The company said in a statement that it has commitments of $ 1.94 billion from existing lenders, to finance the bankruptcy exit plan. The company expects to write off a large portion of its debt with the support of creditors in accordance with Chapter 11.
Cineworld surprised investors last month by announcing that it was seeking to restructure its balance sheet, a move that “is likely to lead to a significant reduction in the value of current equity” for shareholders.
The company’s debts accumulated as a result of a series of acquisitions, which it executed during the past years, while the revenues of theaters declined as a result of the emerging Corona virus pandemic during the past two years.
