Regal cinemas' parent company Cineworld Group, has filed for bankruptcy protection, blaming lower movie admissions and delayed film schedules on the pandemic. File photo by John Angelillo/UPI | License Photo
Sept. 7 (UPI) -- The company that operates Regal cinemas throughout the United States has filed for bankruptcy, blaming lower admissions and delayed film schedules on the COVID-19 pandemic.
Cineworld Group, the world's second-largest movie theater chain, announced Wednesday it has "commenced Chapter 11 cases" in the U.S. Bankruptcy Court for the Southern District of Texas to shed company debt.
The London-based company owns more than 500 Regal movie theaters in the United States, in addition to Cineworld and Picturehouse venues in Britain.
Cineworld's Chapter 11 filing will "strengthen its balance sheet and provide the financial strength and flexibility to accelerate, and capitalize on, Cineworld's strategy in the cinema industry," the company said in a statement.
"Cineworld currently anticipates emerging from Chapter 11 during the first quarter of 2023 and is confident that a comprehensive financial restructuring is in the best interests of the group and its stakeholders, taken as a whole, in the long term," the company said.
The COVID-19 pandemic forced theaters around the world to close and cost Cineworld $2.7 billion in 2020 and $566 million in 2021, the company said.
In October, Cineworld closed hundreds of its Cineworld, Regal and Picturehouse movie theaters in the United States and Britain.
While movie theater attendance rebounded early this summer with hits like "Top Gun: Maverick" and "Jurassic Park: Dominion," admission levels dropped again in August with few new releases and many features going straight to streaming.
In August, the debt-laden Cineworld warned its admission levels had dropped below expectations.
"The pandemic was an incredibly difficult time for our business, with the enforced closure of cinemas and huge disruption to film schedules that has led us to this point," Mooky Greidinger, Cineworld's CEO, said in a statement.
As part of its restructuring, Cineworld plans to "pursue a real estate optimization strategy in the United States and intends to engage in collaborative discussions with U.S. landlords to improve cinema lease terms to further position the group for long-term growth," the company said.
"This will allow us to continue to execute our strategy to reimagine the most immersive cinema experiences for our guests through the latest and most cutting-edge screen formats and enhancements to our flagship theaters," Greidinger said.
"Our goal remains to further accelerate our strategy so we can grow our position as the best place to watch a movie."