Cineworld, the world’s second-largest cinema chain, is preparing to file for bankruptcy within weeks, the Wall Street Journal reports, after struggling to rebuild attendance following the COVID pandemic.
The UK-based group, which operates in 10 countries with 751 sites and more than 9,000 screens, has engaged lawyers from Kirkland & Ellis LLP and consultants from AlixPartners to advise on the bankruptcy process, the report added.
The business, which was saddled with £4bn of debt at the end of the last financial year, previously said it was in talks with stakeholders over potential funding or considering restructuring its balance sheet.
Around 28,000 people are employed by Cineworld across 10 countries, with the report casting uncertainty over the future of thousands of workers at its 127 UK cinemas.
Philippa Childs, head of entertainment and media union Bectu, said: “This is very worrying news, not least for the UK’s Cineworld and Picturehouse workforce who have already been through a tumultuous time during the pandemic.
“The UK’s cinema industry suffered an incredible blow due to COVID-19 and this latest news will be very unsettling for cinema workers.
“We will do everything we can to support our members during this challenging time and will be looking to Cineworld to mitigate the impact of any bankruptcy arrangements on its employees.”
Cineworld, which also owns the Picturehouse chain in the UK and Regal Cinemas in the US, had pinned its hopes on big-budget releases such as Top Gun: Maverick, The Batman and Thor: Love And Thunder to aid its recovery from the devastating impact of the pandemic.
But in a statement earlier this week, the firm said a lack of blockbuster films hit audience numbers.
The company has also been dogged over the past year by separate legal disputes.
In September, the London-listed business struck an agreement to pay £141m to disgruntled Regal shareholders who were frustrated with the price it purchased the US cinema chain, although it has subsequently sought to delay some payments.
Meanwhile, in December it was ordered to pay £720m by a court after it decided not to go through with a takeover of Canadian rival Cineplex as the pandemic broke out.
Chief executive Mooky Greidinger appealed against the court ruling and claimed the company acted in “good faith”.