Cineworld is considering pleading with its landlords to agree a restructuring deal that would allow it to shut sites and slash rents.
The world’s second-largest cinema operator is understood to be exploring a company voluntary arrangement - a type of insolvency procedure used to cut costs - as it scrambles to secure a deal with lenders, the Financial Times first reported.
Cineworld hired advisers AlixPartners last month amid negotiations with its lenders over its $8bn (£6.1bn) debt pile. The chain loaded up on debt to complete the £3.6bn reverse takeover of US chain Regal in 2017.
Cinemas have been hammered by a box office slump since the crisis began as studios delay the release of major blockbusters such as No Time To Die, the latest James Bond release.
In addition to exploring a CVA, Cineworld is in individual discussions with landlords over possible rent cuts.
Cineworld is embroiled in a court battle with landlord AEW UK that launched a legal challenge against the chain in August over unpaid rent.
It is also being sued by the owners of the Trocadero Centre in the West End for £1.4m for unpaid bills, the Evening Standard reported.
The company shut all its 127 Cineworld and Picturehouse theatres in the UK and 536 Regal theatres in the US last month as restrictions on social gatherings and film release delays made it too costly to keep its sites open.
The pandemic has led Cineworld to abandon plans to buy Canadian rival Cineplex for $1.6bn , as it cited coronavirus-related concerns. The pair are now suing each other.
Cineworld declined to comment.
Shares fell 7pc to 45p. They started the year at 220p.