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Shares in struggling cinema chain Cineworld Group
CINE,
fell more than 20% on Friday after the company said it was screening a number of takeover offers, but warned that any potential sale may leave shareholders left in the lurch.
In a statement issued to the London Stock Exchange, the world’s second largest cinema chain said even though it had received some non-binding proposals but no cash offers for a takeover, it doesn’t expect any sale of the company will “provide any recovery for the holders of the company’s equity interests.”
The crisis-hit chain also informed investors that it hasn’t decided whether to accept any of the bids on the table yet.
The stock fell as much as 43% in early London trading on Friday, but later pared the loss to 19%.
Cineworld filed for U.S. Chapter 11 bankruptcy protection in September with around $1.94 billion of debt. It added that discussions of a reorganization with stakeholders are ongoing and it now expects to emerge from the bankruptcy cases in the first half of 2023.
“While the discussions suggest that there is a route to the company emerging from the Chapter 11 cases, in light of the level of existing debt that is expected to be released under any plan, the company does not believe that there will be sufficient creditor support for a plan that contemplates any recovery for equity interests,” Cineworld added in a statement.
The cinema sector has had a difficult period of recovery from the emergence of pandemic lockdowns, as a number of cinema chains report a slow revival in cinema-goers.
Meanwhile, rival and meme stock AMC Entertainment Holdings Inc.
AMC,
stock has rallied this week, jumping 20%. It was up 0.48% premarket on Friday.
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