Net debt is 8.9 billion U.S. dollars, and the world's second largest cinema giant applies for bankruptcy, and the stock price has plummeted by 90%

The cold winter of the film and television industry is still continuing, and the AMC cinema -style madness is not sustainable.

Because the number of theater viewers has grown slowly and cannot meet the company's capital needs, Cineworld, the world's second largest academic line giant, has officially applied for bankruptcy protection.

According to CCTV Finance News, on September 7, local time, Cineworld, the world's second largest film and television institution operator, submitted an application for bankruptcy protection to a court in Texas. The reason is that the number of viewers who grow slowly are difficult to support the company's capital needs.

In August, the company warned that although the cinema was reopened after April 2021, the number of viewers recently was still lower than expected.

CINEWORLD said that the company's bankruptcy reorganization is expected to be completed in 2023. During the reorganization period, the global theater business will not be affected.

On September 9, CineWorld said that the current bankruptcy restructuring plan has been approved by the court. At the same time, the company also stated that the "first day" relief after obtaining the application for bankruptcy from the US bankruptcy enabled the company to immediately get approximately $ 785 million from the US $ 1.94 billion credit line to support operations.

Earlier, Zhongxin Jingwei reported that CINEWORLD liabilities exceeded $ 5 billion. They faced a legal judgment of about $ 1 billion due to the failure of the Canadian chain theater Cineplex, and calculated based on its latest market value (about 68 million US dollars). The company's liabilities are 72 times the market value. According to its financial report, as of the end of 2021, the company's net liabilities were as high as US $ 8.9 billion, and its revenue was only 1.8 billion US dollars.

CINEWORLD predicts that after the reorganization is completed, the company's debt will be largely reduced. Not only that, the company's asset -liability and liquidity status will also be greatly improved. However, after bankruptcy reorganization, the company's equity will be greatly diluted, but the probability will not cause the company's shares to suspend trading.

It is reported that CINEWORLD's stock price has fallen by nearly 90%since the year. According to data, the company was established in 1995 and was listed in London in 2007. In 2019 before the epidemic, the company's annual revenue can reach US $ 4.37 billion, and the global employees are nearly 5,000. There are two reasons for CINEWORLD to go to the road of bankruptcy and reorganization:

First, the impact of the global epidemic has led to a decline in the number of viewers;

Secondly, in 2017, the $ 3.6 billion price acquired the second largest American cinema chain Emperor Entertainment Group Regal Cinemas. Although this move largely increased the company's revenue, it also brought a lot of debt. If it is a rising cycle, the acquisition will help the company to reach another step, but once the industry environment changes, the probability of acquisition will drag the company into the crisis.

As early as last year, Wanda had sold AMC, the world's largest cinema company, and the US retail investors jointly fired AMC's stock price to a record high, but in more than a year, AMC fell from $ 72.61 to a minimum of $ 7.89. Recently, The AMC cinema line even fell 65%within 20 trading days.

In fact, when the AMC cinema stock price was high at the time, the company also wanted to issue ordinary shares, but was rejected by shareholders. According to Bloomberg statistics, the AMC cinema line can only issue 524 million ordinary shares, but the company has issued 516.8 million shares. In addition Preferred stock.

On August 4, the MAC Cinema Line released a 2022 interim report. The financial report showed that the company's revenue in the first half of this year was US $ 1.952 billion, an increase of 229.19%year-on-year; net profit was -459 million US dollars, an increase of 49.59%year-on-year. In other words, after more than two years, the AMC courtyard line still failed to turn losses and struggled in the quagmire of losing money.

In view of the stock split effect of the APE when the APE started trading, Wedbush analyst Alicia Reese reduced the company's target price from $ 4 to $ 2, and maintained the company's "running market" rating.

MKM Partners reduced the AMC cinema target price from $ 1 to $ 0.5.

It can be seen that as the world's largest cinema company, after two years of adjustment, it is still struggling in the "quagmire" of losses, so it is not unusual to apply for bankruptcy in the world's second largest cinema company. It is foreseeable that the recovery of the film industry may not be as fast as expected, and as the uncertain factors of the global economy increase, the entertainment industry is definitely the first to be the first. Therefore, even if CINEWORLD reorganization was successful, there is still a long way to go in the future.

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