# Cineworld plunges as lack of blockbusters adds to debt woes
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-08-17
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Cineworld warns of debt risk as big-budget movies hit
Meta Description: Cineworld's admissions hit by few movies until November. Debt-cutting efforts at risk. Shares tumble. Looking to bounce back with new releases in 2022.
URL: https://financedigest.com/cineworld-plunges-as-lack-of-blockbusters-adds-to-debt-woeshtml

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By Pushkala Aripaka

(Reuters) -Cineworld warned on Wednesday a lack of big-budget movies was hitting admissions and would likely persist until November, potentially complicating efforts to cut debt that it warned could significantly dilute shareholder interests.

Shares in the world’s second largest cinema chain slumped about 40% in early trading, as it faces payment obligations to former shareholders of its U.S. division Regal and a potential multimillion-dollar [fine in a dispute](https://www.financedigest.com/apple-given-fourth-dutch-fine-in-app-store-dispute.html "Apple given fourth Dutch fine in App Store dispute") with Canada’s Cineplex.

Cineworld’s net [debt jumped last year and it was hoping to bounce back](https://www.financedigest.com/european-junk-debt-sales-spring-back-to-life-as-sentiment-improves.html "European junk debt sales spring back to life as sentiment improves") in 2022 from pandemic-driven losses with movie sequels such as James Cameron’s “Avatar 2” and Tom Cruise’s “Top Gun: Maverick”, as well as some Marvel movies in the summer.

But Hollywood has released fewer movies than in a typical summer, largely due to filming disruptions during the pandemic, and some genres, such as romantic comedies, are now more likely to head directly to streaming.

[“Despite a gradual recovery of demand](https://www.financedigest.com/oil-rises-on-strong-crude-demand-despite-china-fears.html "Oil rises on strong crude demand, despite China fears") since re-opening in April 2021, recent admission levels have been below expectations,” the company said, without giving details.

Cineworld’s net [debt stood at $8.9 billion at the end](https://www.financedigest.com/5-common-ways-people-end-up-in-debt-without-realising.html "5 Common Ways People End Up In Debt Without Realising") of 2021 compared to revenues of $1.8 billion. In March, it said it was looking for new sources of liquidity.

The company said on Wednesday it was still in [talks with parties over potential](https://www.financedigest.com/virgin-orbit-says-space-startup-in-talks-with-potential-investors.html "Virgin Orbit says space startup in talks with potential investors") funding or a restructuring of its balance sheet, but “any deleveraging transaction will likely result in very significant dilution of existing equity interests in Cineworld.

The company, which operates in 10 countries [including the United](https://www.financedigest.com/stanchart-weighing-options-including-sale-of-aircraft-lessor-unit.html "StanChart weighing options, including sale, of aircraft lessor unit") States and the United Kingdom, admitted about 95 million movie-goers in 2021, up 75% over 2020, but well below the 275 million seen before the pandemic.

Cineworld, which has more than 9,000 screens globally, said it [expected operations to remain unaffected despite the near-term hit](https://www.financedigest.com/uks-dominos-expects-tech-investments-to-hit-2023-profit.html "UK’s Domino’s expects tech investments to hit 2023 profit"), and that it expected to meet its business counterparty obligations.

(Reporting by Pushkala Aripaka in BengaluruEditing by Jason Neely and Mark Potter)


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