Troubled cinema chain Cineworld has said it will file for administration in the UK as part of a restructuring plan that is set to wipe out shareholders.
The world’s second-largest cinema chain said it will apply for administration for the London-listed company in July, which will see shares in the firm suspended.
Bosses of the cinema chain stressed that the move will not impact the British operations for the holding company, with cinemas continuing to remain open as usual.
It has 128 cinemas across the UK and Ireland, including the world’s tallest cinema in Glasgow’s Renfrew Street.
Cineworld filed for Chapter 11 bankruptcy in the US last year after being weighed down by its mammoth debts and weaker-than-hoped audience numbers.
The group, which also owns the Picturehouse brand, is moving forward with plans to restructure its roughly $5bn (£3.9bn) debt pile to allow it to exit bankruptcy.
It aims to reduce debts by around $4.53bn (£3.6bn) with a plan to raise $800m (£628m) through a rights offering, while also securing $1.46bn (£1.1bn) of new debt financing.
The restructuring plan is set to wipe out shareholders in the cinema chain in order to support its lenders and creditors.
In a statement, the cinema chain said: “Cineworld continues to operate its global business and cinemas as usual without interruption and this will not be affected by the entry of Cineworld Group plc into administration.
“The group and its brands around the world – including Regal, Cinema City, Picturehouse and Planet – are continuing to welcome customers to cinemas as usual.
“The group continues to honour the terms of all existing customer membership programmes, including Regal Unlimited and Regal Crown Club in the United States and Cineworld Unlimited in the UK.”
The company’s shares have already plummeted by almost 99% over the past five years, after being hit hard by the pandemic which forced it to close some of its sites.
In April, the group also scrapped plans to sell its businesses outside the UK, US and Ireland after potential bidders failed to meet the value desired by Cineworld’s lenders.
It hopes to emerge from bankruptcy protection in July after receiving backing for its overhaul from most of its lenders.