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Regal Cinemas' parent company, Cineworld Group PLC, filed for Chapter 11 bankruptcy Wednesday.
The London-based company filed a Chapter 11 petition in the U.S. Bankruptcy Court in the Southern District of Texas.
All told, Cineworld has more than $5B in debt, The Wall Street Journal reported. It is also expected to pay $1B in damages for backing out of a merger with Canadian theater chain Cineplex.
Movie theaters have struggled to regain what they lost during the pandemic, first from extended closures due to public health restrictions and the boost those closures gave to streaming media.
As part of its bankruptcy, Cineworld "will seek to implement a de-leveraging transaction that will significantly reduce the group’s debt, strengthen its balance sheet and provide the financial strength and flexibility to accelerate, and capitalize on, Cineworld’s strategy in the cinema industry," the company said in a release.
The process will also include what Cineworld called a real estate optimization strategy in the U.S., including "collaborative discussions" with its American landlords for better lease terms, Cineworld said.
The company already has commitments for about $1.9B in debtor-in-possession financing, "which will help ensure Cineworld’s operations continue in the ordinary course while Cineworld implements its reorganization," according to a written statement.
Cineworld has about 750 locations in the U.S. and UK. As of Dec. 31, 2021, it had 511 theaters in the U.S.
Though movie theaters in the U.S. have gotten closer to pre-pandemic levels of attendance, they have yet to fully catch up or eclipse them.
Cineworld's main competitor, AMC Entertainment Holdings, has emerged from the pandemic in a slightly better position, acquiring new theaters and benefiting from becoming, briefly, a meme stock.
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