Germany's third biggest cinema chain, Ufa Theater, with 240 screens at 42 sites, is threatened with insolvency after its bank declined to provide further financing following two years of restructuring.

Ufa spokesman Uwe Kattwinkel confirmed a report in the German weekly Der Spiegel that the chain needed an additional Euros 3m to compensate for a drop in business in the traditionally quiet summer months and that the company expected to post profits of Euros 300,000 this year.

Speaking to the dpa news agency, Kattwinkel said that "we must treat the situation seriously", but pointed out that Ufa's "restructuring [had] proceeded more successfully than we thought". In fact, the chain had registered an operating loss of only Euros 250,000 instead of the originally expected Euros 1.5m - 2m.

However, Reuters agency noted that "in banking circles, neither the HypoVereinsbank [which is also one of the creditor banks of the troubled Kinowelt and KirchMedia] nor other investors or banks have been prepared so far to further finance the business. The cinema chain has not presented a viable restructuring concept where the cinema chain would be in the black in the foreseeable future".