Crisis-hit Cineworld has denied claims by the owner of rival Odeon that they have held talks over the sale of cinemas, saying it intends to sell the group as a whole and is yet to begin the process.
AMC Entertainment announced last month that it had ended talks with Cineworld regarding the purchase of a number of locations in the US and Europe.
However, Cineworld, which sought US bankruptcy protection in September in an effort to reorganise its debt and improve its financial position, claimed on Tuesday that no such discussions had taken place.
To maximise value for “moviegoers and all other stakeholders,” its intention is to restructure the group and emerge from bankruptcy in the first three months of this year.
Since pandemic lockdowns closed theatres, the chain and the larger industry have struggled with a delayed recovery in audience numbers.
But Cineworld was also responsible for an own goal.
It became the second-largest chain on the planet because of over-aggressive development prior to the public health issue, including a $3.6 billion deal to purchase Regal in 2017.
However, this spending binge and and the COVID revenue hit severely damaged its finances.
If it does agree to a sale, the group stated on Tuesday that there was “no guarantee of any return” for shareholders.
In the announcement, it was stated that current equity interests in Cineworld “would experience a very severe dilution as a result of any restructuring or sale transaction agreed upon with stakeholders.”
Shares, which are down 80% over the last six months, dropped by another 20% shortly after the market opened but eventually made up the lost ground.
“Shareholders have been advised on multiple occasions that their investment may be greatly diluted,” said Russ Mould [AJ Bell’s investment director] of the most recent development, “so the issue is more about getting back pennies in the pound than it is about waiting for a big windfall.”