Cineworld Group PLC (US:CNWGY, GB:CINE), the world’s second-largest movie theater group and parent of Regal Cinemas, said it filed for Chapter 11 bankruptcy in a Houston court and would look to reorganize as ticket sales never recovered from the COVID-19 pandemic closings.
The Wall Street Journal reported last month that Cineworld was preparing to file for bankruptcy in the U.S.
The London-based company, which is second in size to AMC globally, listed more than $6 billion in liabilities and said the filing gives it a path to survival. It said it plans to cut debt and seek concessions from theater landlords.
It said it’s secured almost $2 billion in loan commitments to operating during bankruptcy and would keep operating while it restructures.
Cineworld Chief Executive Mooky Greidinger noted as long ago as last year that its path diverged from AMC’s during the pandemic and specifically noted the retail interest and the capital it allowed its rival to raise.
“British retail investors just aren’t as cultish as U.S. retail investors are,” Michael Pachter, an analyst at Wedbush Securities, told The Wall Street Journal on Wednesday.
AMC (US:AMC) reported better than expected financial performance in the second quarter in early August but posted a loss nonetheless. Interest payments and capital spending consumed $117 million in the quarter.
Its shares tumbled 37.4% in August.
Cineworld fell too last month after warning about a likely bankruptcy filing.
Cineworld has 800 theaters worldwide and bought Regal for $3.6 billion in 2015. The Greidinger family owns the largest stake in the company, about 20%.
Cineworld’s fate starkly contrasts to rival AMC, which faced similar issues during the pandemic; however, it became a favorite of meme traders and the marketing experience of its management team led by Adam Aron.
Aron commented on his rival’s bankruptcy on Twitter, thanking its army of retail trading fans and assuring them AMC is on solid financial ground.
“Cineworld/Regal just filed for Chapter 11 bankruptcy protection for its theatres in the U.S.and U.K. Fortunately, AMC is in a very, very different situation — because retail investors embraced us and let us raise boatloads of cash. Thank you to retail! You did save AMC,” Aron wrote.
This article originally appeared on Fintel
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