Cineworld shareholders wiped out in restructuring plan

Filing for a Chapter 11 bankruptcy means a company intends to reorganise its debts and assets to have a fresh start, while remaining in business. But the restructuring plan “does not provide for any recovery for holders of Cineworld’s existing equity interests”, it confirmed on Tuesday, meaning shareholder investments will not be rescued.

Its share price plunged by more than a quarter on Tuesday morning to historic lows of just 1.25p.

Its shares have plummeted by almost 99 per cent over the past five years, after being hit hard by the pandemic which forced it to close some of its cinemas.

Cineworld’s lenders had already agreed to plans revealed last week to raise 2.26bn US dollars (£1.8bn) in new funding.

It followed a failed attempt to find an acceptable offer after launching a sales process for its businesses in the UK, US and Ireland.

But the chain stressed that cinemas would run as usual during its restructuring process.

The firm said: “During the restructuring process, Cineworld continues to operate its global business and cinemas as usual without interruption.

“Cineworld and its brands around the world – including Regal, Cinema City, Picture House and Planet – are continuing to welcome customers to cinemas as usual.”

Cineworld Group plc was founded in 1995 and has grown to become one of the largest cinema groups in Europe. Originally a private company, it re-registered as a public company in May 2006 and listed on the London Stock Exchange in May 2007. The group's primary brands are Cineworld and Picturehouse in the United Kingdom and Ireland, Cinema City in Eastern and Central Europe, Yes Planet in Israel, and Regal Cinemas in the United States.