Cineworld filed for Chapter 11 in bankruptcy court in Houston, the company announced.

"As part of the Chapter 11 cases, Cineworld, with the expected support of its secured lenders, will seek to implement a de-leveraging transaction that will significantly reduce the [company's] debt, strengthen its balance sheet and provide the financial strength and flexibility to accelerate, and capitalize on, Cineworld’s strategy in the cinema industry," the company said in a press release.

Subsidiaries and affiliates not engaged in the US, UK or Jersey businesses were not included in the filing and are not part of the Chapter 11, the company noted.

The company said it had commitments for a roughly $1.94 billion debtor-in-possession financing facility (DIP) from existing lenders, "which will be used to, among other things, fund the [company's] operations and refinance certain prepetition funded indebtedness."

The company said it expects to file a reorganization plan "in due course and to meet the necessary requirements to emerge from Chapter 11 as expeditiously as possible," adding that it currently anticipates emerging from Chapter 11 in the first quarter of 2023. The company further said it expects to "pursue a real estate optimization strategy in the U.S. and intends to engage in collaborative discussions with U.S. landlords to improve U.S. cinema lease terms in an effort to further position the [company] for long-term growth."

The company said that its reorganization "will result in very significant dilution of existing equity interests," and noted, "There is no guarantee of any recovery for holders of existing equity interests." The company also said, however, that it did not expect the Chapter 11 filing to result in a suspension of trading in its shares on the London Stock Exchange.

Finally, the company cautioned that given the international nature of its business, further proceedings may be required to implement its de-leveraging strategy, including a filing under Part 26A or Part 26, respectively, of the U.K. Companies Act 2006, or other ancillary proceedings in the UK or other jurisdictions, but added that "no final decision has been taken" on either the need to pursue such a process nor its timing.

Kirkland & Ellis and Slaughter and May are the company's legal counsel, PJT Partners is financial advisor, and AlixPartners is restructuring advisor.

This article originally appeared on PitchBook News