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Cineworld Share Prices Hit Record Low After Bankruptcy Plan Filing





Date Published:
Author: CML News

Lede

Cineworld’s stock plummeted after it announced a plan to reorganize its business, which would leave shareholders with no hope of recovering their funds.

 

Summary

  • Cineworld’s stock dropped 36% to an all-time low after the company announced a final version of its plan to restructure and reorganize its business, leaving shareholders without any hope of recovering their funds.
  • The plan, which was submitted to a US bankruptcy court in Texas, will see Cineworld's lenders cut its debt by $4.5 billion in exchange for equity in the reorganized company.
  • The company's February announcement already confirmed that shareholders would be entirely wiped out by the bankruptcy process, even if it sold some of its businesses.
  • The pandemic hit the world's second-largest movie theater operator hard, resulting in a combined loss of $3.3 billion in 2020 and 2021.
  • Cineworld shares have lost 98% of their value since the company listed on the London Stock Exchange in 2007.
  • The company’s announcement of its reorganization plan on April 3 led to a 33% drop in its stock prices and halted its efforts to sell its US, UK, and Irish businesses.
  • The plan, which has yet to be approved by the court and some of the company’s creditors, is hoped to help Cineworld emerge from Chapter 11 bankruptcy by the first half of this year.
  • Despite the restructuring, Cineworld said its movie theaters would continue to operate as usual without interruption.

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