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Cineworld rises after denying breakup reports

By Geoffrey Smith

Investing.com -- Cineworld (LON:CINE) stock rose 5% on Monday after the company denied a report that its bankruptcy administrators are looking at a deal to split it up.

"Cineworld has not initiated, and does not intend to initiate, an individual auction for any of its U.S., U.K. or rest of world businesses on an individual basis," newswires quoted a spokesperson as saying for the movie theater operator.

The statement contradicts a Bloomberg report on Friday that claimed that its creditors - who have been effectively running the company since it filed for bankruptcy protection in the U.S. in September were considering a plan that would spin off its operations in Poland, Hungary, and Romania. According to Bloomberg, creditors had been considering the sale of Cinema City, Yes Planet, and Rav-Chen, an Israeli operation.

By 05:55 ET (10:55 GMT), Cineworld stock was up 4.2% having, risen as much as 6% in response to the statement.

The company's denial on Monday raises the chance that it will emerge from bankruptcy in one piece, after restructuring debts and leases totaling nearly $9 billion. The company collapsed under that burden during the pandemic. Many of its theaters had been shut for months at a time due to public health measures, and even the limited periods when they were open were hobbled by disrupted release schedules and social distancing restrictions that capped audience levels. The company said in October that it expects audience numbers to remain below pre-pandemic levels through 2024.

Cineworld said it "remains committed" to working with key stakeholders to develop a reorganization plan that would "maximize value" for "moviegoers and all other stakeholders."

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