KNOXVILLE, Tenn. — Cineworld Group, the parent company of Regal Cinemas, confirmed Wednesday it's proceeding with financial reorganization plans.
The United Kingdom-based global theater chain said it's seeking what's called a Chapter 11 restructuring in federal court in Texas.
Cineworld has struggled with mounting debt made worse by the global pandemic.
Business is expected to carry on as usual, including Cineworld and Knoxville-based theater operations, the firm said Wednesday.
It has secured nearly $2 billion in "debtor-in-possession" commitments as it proceeds with reorganization.
The company noted it expected "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 capitalise on, Cineworld’s strategy in the cinema industry."
It anticipates emerging from reorganization in the first quarter of 2023. Employees are expected to continue getting paid as usual, according to the company announcement.
"As previously announced, it is expected that any de-leveraging transaction will result in very significant dilution of existing equity interests in the Group and there is no guarantee of any recovery for holders of existing equity interests. The Company does not expect the Chapter 11 filing to result in a suspension of trading in its shares on the London Stock Exchange," the firm said.
Another sign of what's to come: Cineworld said it anticipates "a real estate optimisation strategy" in the U.S. and intends to engage in collaborative discussions with U.S. landlords to improve US cinema lease terms in an effort to further position the Group for long-term growth."
Cineworld operates more than 9,100 screens globally at 751 sites. Subsidiary Regal is one of the largest movie chain companies in the United States. Its headquarters sits along Fort Loudoun Lake just south of downtown.
Regal's local theaters include Regal Riviera downtown, the art house Downtown West center and the Pinnacle center in Turkey Creek.
"We continue to welcome our guests to cinemas around the world, which will not change during the Chapter 11 cases, and expect that all membership programs, including Regal Unlimited and Regal Crown Club in the United States and Cineworld Unlimited, should continue as usual," Cineworld said in a note to customers Wednesday.
