Cinema giant Cineworld has seen its shares drop sharply after it halted the sale of parts of its business and announced a new funding plan.

It comes after the firm, which also owns the Picturehouse chain in the UK, launched a process to find a potential buyer.

After struggling to find an acceptable offer, it said it will now halt the potential sale efforts for the businesses in the UK, US and Ireland.

It will, however, continue with an auction for its operations outside of these countries.

📝 Get full unlimited access to our unrivalled business news and analysis for only £2 for 2 months.

👉 Click here to get this offer

The company said it will raise $2.26 billion in new funding as part of a plan to exit bankruptcy and terminate a planned sale of its US, UK and Irish businesses.

The debt-ridden group, which runs around 750 sites globally and employs more than 5,000, filed for bankruptcy protection in the US last year.

It has now said it will restructure its roughly $5bn dollar debt pile in order to emerge from the Chapter 11 bankruptcy during the first half of 2023.

The financial restructuring will involve lenders providing around $1.46bn in new credit, as well as $800 million of equity to the lenders.

Mooky Greidinger, chief executive of Cineworld, said: "This agreement with our lenders represents a 'vote of confidence' in our business and significantly advances Cineworld towards achieving its long-term strategy in a changing entertainment environment.

"With a growing slate of blockbusters and audiences returning to cinemas in increasing numbers, Cineworld is poised to continue offering moviegoers the most immersive cinema experiences and maintain its position as the 'best place to watch a movie'."

READ MORE: Cineworld 'preparing to file for bankruptcy' as audiences fall

The group said it will continue to trade as "business as usual" throughout the financial restructuring process.

It said: "During the restructuring process, Cineworld continues to operate its global business and cinemas as usual without interruption.

"Cineworld and its brands around the world - including Regal, Cinema City, Picturehouse and Planet - are continuing to welcome customers to cinemas as usual.

"The Group continues to honour the terms of all existing customer membership programmes, including Regal Unlimited and Regal Crown Club in the United States and Cineworld Unlimited in the UK."

Cineworld's shares have plunged almost 99% over the past five years, as it was hit particularly hard by the pandemic, which led to the enforced closure of its cinema sites.

READ MORE: Cineworld shares routed as chain warns of ‘very significant dilution’

Shares in Cineworld have plunged since the end of August when the group confirmed it was considering financial restructuring.

The company has struggled to service debts accrued from its 2018 acquisition of the Regal chain in the US as audience figures failed to rebound strongly following the easing of Covid restrictions.

In 2021 Cineworld revealed the impact of theatre closures during the pandemic with a pre-tax loss of over $3bn.

The business has posted significant losses since and has also come under pressure from growth in streaming services.

Blockbuster films like Top Gun: Maverick have helped bring cinemagoers back, but not yet in the numbers expected.

Cineworld was founded in 1995 and is now one of the leading cinema groups in Europe. Originally a private company, it re-registered as a public company in May 2006 and listed on the London Stock Exchange in May 2007.

Cineworld's acquisition of Regal Entertainment Group has created the second-largest cinema business in the world behind AMC.

Cineworld currently operates in the UK, Ireland, Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania, Israel and the US.

Mr Greidinger said in September that it expected to pursue a “real estate optimisation strategy” in the US, and will enter into talks with existing US landlords in a bid to negotiate lease terms, adding: "The pandemic was an incredibly difficult time for our business, with the enforced closure of cinemas and huge disruption to film schedules that has led us to this point.

“This latest process is part of our ongoing efforts to strengthen our financial position and is in pursuit of a de-leveraging that will create a more resilient capital structure and effective business.”

Shares in Cineworld closed at 1.96p, down 32.52%, or 0.94p.