Cineworld has unveiled a restructuring plan that is set to wipe out shareholders after the cinema chain went bankrupt last year.
The debt-ridden business said it had filed a reorganisation plan with the US bankruptcy court but insisted it would be “business as usual” across its 750 global cinemas.
It intends to restructure its roughly $5 billion (€4.58 billion) debt pile in order to exit the chapter 11 bankruptcy during the first half of this year.
Filing for a chapter 11 bankruptcy means a company intends to reorganise its debts and assets to have a fresh start, while remaining in business.
Wills without residuary clauses can see people inherit even if you didn’t want them to
Ireland needs to oppose EU proposals to cut patent protection on medicines
Negotiation is a fact of life, whether you are trying to buy a house, close a deal or squeeze a pay rise
AIB offloads risk and obesity drug boss calls on Ireland to step up to the plate
But the restructuring plan “does not provide for any recovery for holders of Cineworld’s existing equity interests”, it confirmed on Tuesday, meaning shareholder investments will not be rescued.
Its share price plunged by more than a quarter on Tuesday morning to historic lows of just 1.25p.
Its shares have plummeted by almost 99% over the past five years, after being hit hard by the pandemic, which forced it to close some of its cinemas.
Cineworld’s lenders had already agreed to plans revealed last week to raise $2.26 billion in new funding.
It followed a failed attempt to find an acceptable offer after launching a sales process for its businesses in the UK, US and Ireland (the Cineworld Dublin complex on Parnell Street).
But the chain stressed that cinemas would run as usual during its restructuring process.
The firm said: “During the restructuring process, Cineworld continues to operate its global business and cinemas as usual without interruption.
“Cineworld and its brands around the world – including Regal, Cinema City, Picture House and Planet – are continuing to welcome customers to cinemas as usual.”
