Cineworld’s bosses look set to be ousted as the debt-riddled cinema chain is taken over by its creditors in a deal to save it from collapse
Cineworld’s bosses look set to be ousted as the debt-riddled cinema chain is taken over by its creditors in a deal to save it from collapse.
Shares in the company crashed as much as 44 per cent to a record low after it abandoned plans to sell its operations in the US, UK and Ireland having failed to find a buyer.
Instead, its lenders will reduce its crippling £7.2billion debt pile by £3.7billion and pump in fresh funds in exchange for ownership of the reorganised group as it emerges from Chapter 11 bankruptcy protection in the US.
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Cineworld said the plan ‘does not provide for any recovery’ for shareholders, and the stock crashed 32.5 per cent, or 0.94p, to 1.96p. Shares were changing hands at 300p just four years ago. The company will be hoping summer blockbusters Barbie and Indiana Jones And The Dial Of Destiny will help drive its recovery.
Chief executive Mooky Greidinger insisted the deal was a ‘vote of confidence in our business’. But his days look numbered with he and his brother Israel – who is deputy chief executive – set to be replaced.
‘Vote of confidence’: Mooky Greidinger
One analyst said the siblings have had their chance and now ‘it’s time for someone else to have a go’.
The Greidinger family currently own around a fifth of Cineworld. But the firm was devastated by the pandemic having racked up enormous debts through the costly takeover of US rival Regal Cinemas in 2018.
The former finance chief of Regal Cinemas, David Ownby, is the preferred candidate to take over as chief executive, according to The Financial Times.
Cineworld, the second largest cinema chain in the world behind AMC Entertainment, said it was still looking for buyers for its operations in Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania and Israel.