Shares of Cineworld Group plc (LON: CINE) today fell 15.6% despite the lack of major announcements by the cinema operator.
Investors may have chosen to stay away from the stock given the rising number of US coronavirus cases that threaten the continued operation of Cineworld’s Regal cinemas in New York State.
Cineworld Regal cinemas just reopened 11 locations in New York state on 23rd October that are likely to close down as the state reimposes some of the previous lockdown measures amid rising coronavirus cases.
The cinema closures would be a major blow to Cineworld, which had closed all its 543 US Regal theatres along with its 128 UK cinemas in October after the postponement of the new James Bond film by MGM studios up to April 2021.
The company is also struggling with a huge debt pile of $8 billion (£6.1 billion) and has hired AlixPartners to advise it in restructuring talks.
However, Cineworld might be running our of time given that one of the largest syndicates of its lenders appointed consultants from FTI Consulting and Houlihan Lokey to negotiate with the company over its debt.
The cinema operator may be forced into bankruptcy if it cannot restructure its debt given that it is operating on zero income due to the cinema closures.
Cineworld share price
Cineworld shares today fell 15.6% to trade at 24.05p having dropped from Friday’s closing price of 28.51p.