Cineworld shares plunge on bankruptcy fears

Shares in Cineworld have fallen more than 60% as concerns mount that the world's second largest cinema chain is about to file for bankruptcy.

The company, which also owns the Picturehouse chain in the UK, is struggling under $5bn worth of debt.

Like other cinema chains, Cineworld was hit hard by the pandemic.

Cineworld recently said post-Covid customers levels were lower than expected and blamed "limited" film releases.

The Wall Street Journal reported that Cineworld is preparing to file for bankruptcy, sending its share price tumbling.

Cineworld has been contacted for comment.

The firm had hoped blockbusters such as the latest Bond film, Top Gun: Maverick and Thor: Love And Thunder would draw audiences back after Covid restrictions.

But it said earlier this week: "Despite a gradual recovery of demand since reopening in April 2021, recent admission levels have been below expectations.

"These lower levels of admissions are due to a limited film slate that is anticipated to continue until November 2022 and are expected to negatively impact trading and the group's liquidity position in the near term."

Cineworld has 9,189 screens across more than 750 sites.

It operates in 10 countries, including the UK, the US, Poland and Israel, and employs more than 28,000 people.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said Cineworld had "failed to lure back enough movie goers to help pay back its enormous debts".

"Hopes had been raised that first spies, then superheroes, then fighter pilots would prove to be the magic bullets for the company but there simply haven't been enough blockbusters coming through to to break the spell of misfortune," she said.

But Peter Williams, a former non-executive director at Cineworld, told the BBC he thought cinema ticket prices were "too low".

"I've always felt that the ticket price or headline ticket price is almost too low really. I mean, it is still a very cheap night out," he said.

He added that while Cineworld is likely to face a major restructure, he believed that it would emerge as "a viable business".

"This is a big business and people still want to go out and go to the cinema."