Cineworld Group Plc, the owner of Regal Cinemas, is preparing to file for bankruptcy within weeks after struggling to rebuild attendance from pandemic lows, according to people familiar with the matter.

The British cinema company has engaged lawyers from Kirkland & Ellis LLP and consultants from AlixPartners to advise on the bankruptcy process, these people said. Cineworld is expected to file a chapter 11 petition in the U.S. and is considering filing an insolvency proceeding in the U.K., they said.

Cineworld said on Wednesday that despite a gradual recovery in attendance since reopening theaters last year, recent admissions have lagged below expectations due to a limited film slate. The company is evaluating strategic options to generate liquidity and potentially restructure its balance sheet through a comprehensive deleveraging transaction, it said. Any such deleveraging likely will be highly dilutive to shareholders, Cineworld said.

The company is negotiating with its lenders to fund the costs of the bankruptcy process, according to a person familiar. Cineworld and Kirkland didn’t immediately respond to requests for comment. AlixPartners declined to comment.

The London-based chain narrowly escaped bankruptcy in 2020 after landing a lifeline from creditors while its nearly 800 theaters were shut due to Covid-19 restrictions.

Cineworld’s biggest competitor, AMC Entertainment Holdings Inc., has faced similar challenges of muted attendance and a limited supply of new releases, but AMC managed to raise more than $2.2 billion of equity to stay afloat through the pandemic, largely by tapping into individual investors who made it a meme stock.

In an interview with The Wall Street Journal in October 2021, Cineworld Chief Executive Mooky Greidinger said he was happy for AMC and that “not every stock in the U.S. market is a meme stock.”

Cineworld was founded in the U.K. in 1995 and acquired the Regal chain in 2018 for $3.6 billion. It is the second-largest cinema chain in the world behind AMC.

Cineworld’s London-listed shares fell 58% following the news that the company is preparing for a bankruptcy filing.

Write to Alexander Gladstone at alexander.gladstone@wsj.com