Is Cineworld closing down? Cinema chain with two branches in Birmingham preparing to file for bankruptcy

Cinema chain Cineworld is set to file for bankruptcy, according to the Wall Street Journal.

Shares in Cineworld Group have slumped more than 81% to a record low of 1.8 pence, just days after the Wall Street Journal warned a lack of blockbusters would hit its liquidity in the near future.

The conglomerate, based in London, has 128 cinemas across the UK and Ireland - including two in Birmingham.  There are 751 in total around the globe. After AMC Theatres, it is the second largest cinema chain in the world.

Here’s everything you need to know, including why Cineworld is struggling, what it could mean for Birmingham’s branches, and the company’s current share price.

Why is Cineworld Group struggling?

Earlier this week, Cineworld warned audience numbers have been weaker than expected and predicted they will stay low until November due to “limited” film releases.

In a statement the firm said: “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.”

The business was saddled with 4.8 billion dollars (£4 billion) of debt at the end of the last financial year.

Cineworld said: “The group’s business operations are expected to remain unaffected by these efforts and Cineworld expects to continue to meet its ongoing business counterparty obligations.

“Cineworld continues to welcome guests to its cinemas across its global markets as normal, without disruption.”

What is the Cineworld share price currently?

The market value of Cineworld almost halved on Wednesday, however matters got worse on Friday as the share price slumped by more than 81-percent.

It is currently valued at a staggeringly low 1.8 pence per share.

Before the COVID-19 pandemic, Cineworld were trading at £1.97, as well as holding a market value of £4.4 billion, which is a drop off of 88% as the company is now priced at £50 million.

What will happen to Cineworld cinemas in Birmingham?

As of now, neither Cineworld Birmingham Broad Street nor Cineworld Birmingham NEC have made an official statement on what will happen to the movie theatre once Cineworld files for bankruptcy.

Cineworld has stated that “the group’s business operations are expected to remain unaffected by these efforts and Cineworld expects to continue to meet its ongoing business counterparty obligations.

“Cineworld continues to welcome guests to its cinemas across its global markets as normal, without disruption.”

For more information about Cineworld preparing to file for bankruptcy, visit the National World website.