(Alliance News) – Shares of Cinewood Group PLC fell on Tuesday as the beleaguered cinema chain put itself up for sale in hopes of securing its future.
Cineworld operates more than 700 locations worldwide, including over 100 in the UK and Ireland.
Shares fell 6.9% to 3.39p each in London on Tuesday morning. In the past 12 months, the stock has fallen 90%.
In response to recent media reports, Cineworld said that neither it nor its lenders and advisors were involved in discussions with US rival AMC Entertainment Holdings Inc. over the sale of its assets. AMC, incorporated in New York, owns the Odeon movie chain.
However, starting this month, Cineworld will begin a marketing process aimed at making proposals for the group as a whole. This will run in parallel with the development of a plan to reorganize Chapter 11, according to Cineworld.
The company said the reorganization is “focused on maximizing value for the benefit of moviegoers and all other stakeholders”.
Cineworld has not initiated nor intends to initiate a separate sale to sell any of its assets on an individual basis. In addition, any sales transaction of the group as a whole would not include the sale of Cineworld itself, and therefore would not be subject to the Cineworld rules. [Britse] A symbol of acquisition,” Cineworld confirmed.
In September 2022, Cineworld confirmed that it would file for bankruptcy (Chapter 11) in the United States Bankruptcy Court in Texas.
On August 22, the company announced for the first time that it was considering filing under Chapter 11, and any deleveraging would likely result in “very significant dilution” of its stock.
Since then, there have been reports that Cineworld is in talks with London-based Vue International and Toronto-based Cineplex. Prior to the Covid-19 pandemic, Cineworld had agreed to buy Cineplex, but later reversed that decision and ordered a Canadian court to pay Cineplex damages.
Cineworld warned on Tuesday that the potential sale likely won’t benefit existing shareholders. “Any restructuring or sale deal agreed upon with stakeholders is expected to result in a very significant dilution of existing equity stakes in Cineworld, and there is no guarantee that Cineworld shareholders’ equity will be recovered,” the company said.
By Sophie Rose, Alliance News correspondent
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