Abandon Hope, Cineworld Tells Shareholders

Cineworld (LON:CINE) shareholders are set to be wiped out completely after talks to bring the company out of bankruptcy failed to attract enough interest from buyers. The owner of the Regal chain of cinemas, which collapsed under the weight of its debts last year, said it had failed to persuade potential buyers to make a bid for the whole business, and that its assets are now likely to be broken up piecemeal to satisfy creditors after receiving non-binding bids for them. In a statement to the London Stock Exchange, Cineworld said: “The Company is reviewing such proposals in conjunction with its advisers and key stakeholders and, whilst no decision has been made as to whether to pursue a sale transaction, and the terms of any such transaction remain uncertain, based on the proposals received to date, it is not expected that any sale transaction will provide any recovery for the holders of the Company’s equity interests.” The company said it still sees a way out of the Chapter 11 bankruptcy process in the U.S. that is currently allowing it to continue trading, but indicated that its creditors will have to exchange at least a part of their claims for equity, leaving no room for current shareholders.