British cinema operator Cineworld Group, owner of Regal Cinemas, has proposed a plan to emerge from Chapter 11 bankruptcy. In what is described as a “debt-for-equity swap,” the company would reduce by some $4.53 billion the indebtedness of its principal U.S. claimants, who would be getting a stake in the company in exchange for waiving their claims. The group companies have commitments for roughly $1.94 billion in debtor financing from lenders to help ensure Cineworld operations can continue during its anticipated reorganization, which is subject to court approval. The transaction is expected to “result in very significant dilution of existing equity interests.”

The deal does not provide for shareholders to recover equity, Cineworld explained in a press release. Cineworld shares dropped more than 30 percent Monday, reaching their lowest level since last summer. CNN notes “the company said in February that it expected shareholders to be wiped out entirely by the bankruptcy process, even in the event of a sale of some of its businesses.”

Cineworld’s brands include Regal, Cinema City, Picturehouse and Yes Planet. Subsidiaries and affiliates not engaged in the U.S., UK or Jersey businesses are not part of the Chapter 11, the company said.

Cineworld said that “it has received non-binding proposals for some or all of the group’s assets but determined that absent an all-cash bid significantly in excess of the value established under the proposed restructuring, it will cease seeking a buyer for its businesses in the U.S., UK and Ireland,” reports Deadline, adding that “the chain will continue to consider the proposals received for its ‘rest of world’ business.”

CNN quotes Cineworld Group CEO Mooky Greidinger saying the agreement with lenders on a Chapter 11 plan “represents a vote of confidence in our business and significantly advances Cineworld towards achieving its long-term strategy in a changing entertainment environment.”

Variety says reports surfaced this weekend in the UK press indicating creditors are aligning to have Greidinger removed.

Cineworld filed for Chapter 11 protection in U.S. Bankruptcy Court in Texas in September 2022. The company operates cinemas in 10 countries, with 747 sites and 9,139 screens globally (making it the world’s second-largest cinema chain by screens, according to the firm).

CNN reports that like all exhibitors, the UK-based Cineworld was hit hard by the COVID-19 pandemic, which “forced movie theaters around the globe to close, dealing a devastating blow to Cineworld,” which “lost $2.7 billion in 2020 and another $566 million in 2021.” Its most recently reported loss was $294 million for the six months ending June 2022.

While the company continues to operate its global theaters, “after two rounds of closures in the United States, around 500 Cineworld theaters remain across the country,” CNN writes. In addition to the U.S., UK and Ireland, Cineworld operates theaters in Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania and Israel.