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Cinewold Group PLC shares fell on Tuesday, as the beleaguered cinema chain put itself up for sale in hopes of securing its future.
Cineworld operates over 700 sites across the globe, including over 100 in the UK and Ireland.
Its shares were down 6.9% to 3.39 pence each in London on Tuesday morning. Over the last 12-months the stock has dropped by 90%.
Saying it was responding to recent media reports, Cineworld said that neither it, nor its lenders and advisors, have participated in discussions with US rival AMC Entertainment Holdings Inc regarding any sale of its assets. New York-listed AMC is the owner of cinema chain Odeon.
Starting from this month, however, Cineworld will run a marketing process, focused on proposals for the group as a whole. This will run in parallel to the developing of a plan for a Chapter 11 reorganisation, Cineworld said.
The company said that the reorganisation ‘seeks to maximise value for the benefit of movie goers and all other stakeholders.’
‘Cineworld has not initiated and does not intend to initiate a separate marketing process for the sale of any of its assets on an individual basis. Furthermore, any sale transaction for the group as a whole would not include the sale of Cineworld itself and would therefore not be subject to the rules of the [UK] Takeover Code,’ Cineworld confirmed.
Back in September 2022, Cineworld confirmed it was beginning Chapter 11 filing in US Bankruptcy Court in Texas, as it grappled with liquidity woes.
It had first announced it was considering a Chapter 11 filing on August 22, and any deleveraging would likely result in a ‘very significant dilution’ of its shares.
Since then, there have been reports that Cineworld has been in discussions with London-based Vue International and Toronto-based Cineplex Inc. Before the Covid-19 pandemic, Cineworld had agreed to buy Cineplex, but later backed and was ordered to pay damages to Cineplex by a Canadian court.
Cineworld warned on Tuesday that any sale is unlikely to benefit existing shareholders. ‘It is expected that any restructuring or sale transaction agreed with stakeholders will result in a very significant dilution of existing equity interests in Cineworld,’ it said, ‘and there is no guarantee of any recovery for holders of Cineworld’s existing equity interests.’
By Sophie Rose, Alliance News reporter
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