SHARES in Cineworld have been further routed today as the struggling cinema chain responded to media reports about its future.
The chain, which has cinemas in Glasgow’s Renfrew Street and at Silverburn shopping centre on the south side of the city, lost a further 30 per cent of its stock market worth after the company warned investors would lose out in the event it concludes “any deleveraging transaction”.
Cineworld was responding this morning to media reports circulating on Friday that it was poised to file for bankruptcy in the US, which caused shares to tumble by around 60%.
The speculation came after it told the City last Tuesday that recent audience numbers had been “below expectations”, with the company blaming a “limited film slate that is expected to continue until November”.
It warned then that the lower admission levels were “expected to negatively impact trading and the group’s liquidity position in the near term”, adding that it was evaluating options to “both obtain additional liquidity and potentially restructure its balance sheet through a deleveraging transaction”.
It said on Tuesday: “Any deleveraging transaction will likely result in very significant dilution of existing equity interests in Cineworld.”
Cineworld, which owns the Regal cinema chain in the US, said today that its options for restructuring could include a voluntary chapter 11 filing for bankruptcy in the US, alongside “ancillary proceedings in other jurisdictions as part of an orderly implementation process”.
It said it was holding talks with major stakeholders, including lenders and their advisers.
The company said it expects to continue trading throughout the process with “no significant impact upon its employees”. However it reiterated that “any deleveraging transaction would… result in a very significant dilution of equity interests in Cineworld”.
Shares in the London-listed chain have lost 90% of their worth in the year to date, and at 13.45pm were down nearly 29% on the day at 3p.
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