British company Cineworld, which owns the U.S. Regal cinema chain, said it was looking at the option of filing for bankruptcy in the United States as it struggled to cut debts
also flagged a tough third quarter due to a slim film slate. Its shares plunged 38% in early U.S. trading on Monday.Cineworld shares, which hit a record low on Friday after the Wall Street Journal first reported its potential bankruptcy, were down 26% to 3 pence at 1340 GMT. That compares with a peak of more than 310 pence in 2017.
While Cineworld's specific issue is its debt pile, the broader change in how audiences want to watch movies is a trend unlikely to reverse or get any easier for cinema chains, Hargreaves Lansdown analyst Sophie Lund-Yates said.A Chapter 11 filing can allow a company to stay in business and restructure its debt.
Cineworld, which declined to comment on the hedge fund's remarks, said it was in talks with many of its major stakeholders, including lenders and legal and financial advisers, and reiterated any deleveraging transaction would lead to very significant dilution of existing equity interests.and is in the midst of a legal dispute with the Canadian company, which has sought C$1.23 billion in damages for walking away from the deal.
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