Cineworld shares plunge after it receives no all-cash offers to save business

theguardian.com:

Shares in Cineworld have plunged further after the movie chain said it had received no all-cash offers from potential suitors to save its global business, and any bankruptcy rescue deal would wipe out shareholders.

The London-listed group, which was forced into bankruptcy in the US despite a wider recovery in cinema-going fuelled by hits such as the sequels to Avatar and Top Gun, said it has received non-binding proposals from a “number of potential transaction counterparties” for its business.

However, the world’s second-largest cinema operator admitted earlier this week that it had not received any bids for its businesses in the US and UK, its two biggest markets.

Cineworld shares slumped by 46% to 2.1p in early trading on Friday, before recovering to be 21% down at 3.2p. Cineworld was trading above 220p at the end of 2019, just before the coronavirus pandemic.

While potential buyers have expressed “some strategic interest” in its full business – Cineworld has said it is focused on proposals for the whole group – bids that have been submitted have mainly been for theatres in central Europe, eastern Europe and Israel.

“The company is reviewing such proposals in conjunction with its advisers and key stakeholders,” the cinema operator said on Friday. “Based on the proposals received to date, it is not expected that any sale transaction will provide any recovery for the holders of the company’s equity interests.”

Earlier this month it emerged that London-headquartered Vue International, Europe’s largest privately held cinema chain, had secured backing from its financial backers to submit a bid.

Cineworld filed for US bankruptcy protection, known as Chapter 11, last September when it succumbed to almost $6bn (£5bn) in debt it