Cinema giant Cineworld has issued an update about its future following speculation that suggested that all of its sites, including three facilities in the North East, could close down.

Reports started circulating at the end of last week that alleged that the Cineworld Group is reportedly preparing to file for bankruptcy after struggling to rebuild attendance following the Covid pandemic.

Cineworld, which also operates Regal Cinemas in the United States, has engaged lawyers from Kirkland & Ellis LLP and consultants from AlixPartners to advise on the bankruptcy process.

Read more: Cineworld bankrupt: The North East cinemas in danger of closing

It comes after Cineworld warned audience numbers have been weaker than expected and predicted they will stay low until November due to “limited” film releases.

In a statement last week, the firm said: “Despite a gradual recovery of demand since reopening in April 2021, recent admission levels have been below expectations.

“These lower levels of admissions are due to a limited film slate that is anticipated to continue until November 2022 and are expected to negatively impact trading and the group’s liquidity position in the near term.”

The Northern Echo: Cineworld issued a bankruptcy statement at the end of last week. Picture: NORTHERN ECHO Cineworld issued a bankruptcy statement at the end of last week. Picture: NORTHERN ECHO

The cinema chain has a number of branches in the North East that could now face closure if the bankruptcy goes ahead, including Newcastle, Boldon Colliery, Middlesbrough and York.

Despite questions remaining about its future, Cineworld issued an updated statement on Monday (August 22) to explain the ‘media speculation’.

Posting on its website, Cineworld highlighted that all of its facilities were open for business, and they will continue to welcome guests.

The Northern Echo: Cineworld in Middlesbrough. Picture: NORTHERN ECHOCineworld in Middlesbrough. Picture: NORTHERN ECHO

A statement from the cinema giant said: “In response to media speculation, Cineworld is today providing an update to its announcement on 17 August 2022 regarding an evaluation of strategic options to both obtain additional liquidity and potentially restructure its balance sheet through a comprehensive deleveraging transaction.

“Cineworld is in discussions with many of its major stakeholders including its secured lenders and their legal and financial advisers.

“Any such filing would be expected to allow the Group to access near-term liquidity and support the orderly implementation of a fully funded deleveraging transaction.”

The Northern Echo: Cineworld has issued an updated 'media speculation' statement. Picture: NORTHERN ECHOCineworld has issued an updated 'media speculation' statement. Picture: NORTHERN ECHO

The statement went on to say that the restructure would look to “continue its business over the longer term with no significant impact upon its employees,” while “resulting in very significant dilution of existing equity interests in Cineworld”.

The spokesperson added: “Cineworld's evaluation of these strategic options remains ongoing. A further announcement will be made when appropriate.”

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