Cineworld has dropped plans to sell its businesses in the US, UK and Ireland after failing to find a buyer.

The cinema chain operator also says it has reached a conditional deal with lenders to exit bankruptcy.

The company, which owns the Picturehouse chain in the UK, announced plans to raise $2.26bn (£1.8bn) of new funding.

Cineworld filed for US bankruptcy protection last year as it struggled under the weight of $5bn of debt.

“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,” chief executive Mooky Greidinger said.

The company said it will continue to consider proposals for the sale of its business outside the US, UK and Ireland.

The proceeds of the capital raising will be used to fund the turn around of the business including costs related to the restructuring its debts, Cineworld said in a filing with the US bankruptcy court in the Southern District of Texas.

It is the world’s second-largest cinema chain by the number of screens, with more than 9,000 screens in almost 750 locations.

Cineworld’s operations span 10 countries – including the UK, the US, Poland and Israel – with approximately 30,000 employees worldwide.

Cinema chains were one of the worst hit industries during the pandemic.

Many cinemas were forced to close for extended periods during the lockdowns, or had to operate at a reduced capacity due to social distancing rules.

Cineworld reported a huge loss for the first six months of 2020 after it was forced to temporarily close some cinemas, and movie studios delayed the release of some blockbuster movies.

The company’s London-traded shares have plunged by more than 90% over the last year as investors fret about its future. Its current stock market value is below £40m ($49.1m).

Cinemas have also been facing tough competition from streaming services, which soared in popularity during the lockdowns.

In 2020, a row broke out when Cineworld and rival AMC, which owns the Odeon Cinemas chain, criticised Universal Pictures for releasing Trolls: World Tour online at a time when cinemas were forced to close because of coronavirus.

Cineworld subsequently signed a deal with Warner Bros to show films in theatres before they are streamed.

More recently, streaming giant Netflix reported a sharp fall in subscribers, as the rising cost of living leads to people cutting back.

After lockdown restrictions eased, cinema chains have seen large audiences drawn by the latest Hollywood blockbusters.

Big box office hits in recent months include Top Gun: Maverick, Avatar: The Way of Water and Dungeons & Dragons: Honour among Thieves.