Challenging market conditions and a lack of enough blockbusters are forcing Cineworld Group (GB:CINE) (CNNWQ) to push back the restructuring targets that it set when it filed for Chapter 11 bankruptcy in the U.S. in September 2022. Back then, the company stated that it expects to emerge from Chapter 11 protection in the first quarter of 2023.
On Wednesday, Cineworld’s lawyer Joshua Sussberg explained the challenges faced by the company to Judge Marvin Isgur of the U.S. Bankruptcy Court in Houston, Texas. Sussberg stated that there haven’t been many blockbusters as the COVID-19 pandemic disrupted Hollywood movie production. Furthermore, streaming services have impacted business.
As per the Wall Street Journal, Sussberg said, “The box office receipts have significantly and consistently underperformed expectations during these cases.” He pointed out that Cineworld’s average number of admissions from September to December 2022 was 37% below expectations.
However, the company made 15% more money per person than projected for the September to December period due to higher concession sales and a rise in premium seat sales. In September 2022, Cineworld cautioned that admissions would remain below pre-pandemic levels over the next two years.
Cineworld is burdened with massive debt due to its aggressive expansion and pandemic-induced losses. It is taking several efforts to emerge from Chapter 11, including a potential sale. Earlier this week, Cineworld made it clear that it was looking for the sale of the group as a whole and not of individual assets. According to Reuters, the company intends to begin approaching potential acquirers this month. Cineworld, which owns Regal Cinemas in the U.S., denied discussions with AMC Entertainment Holdings (AMC) for the sale of any of its assets.
