Cineworld 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 bankruptcy
Cineworld bosses appear to be ousted when the debt-riddled cinema chain is taken over by its creditors in a deal to save it from bankruptcy.
Shares of the company plunged as much as 44 percent to an all-time low after it abandoned plans to sell its US, UK and Ireland operations because no buyer was found.
Instead, the lenders will reduce the crippling £7.2bn mountain of debt by £3.7bn and pump new funds in exchange for ownership of the reorganized group, as evidenced by Chapter 11 bankruptcy protection in the US.
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Cineworld said the plan “does not foresee any recovery” for shareholders, and the stock crashed 32.5 percent, or 0.94p, to 1.96p. Just four years ago, the shares changed hands for 300 pence. The company hopes that the summer hits Barbie and Indiana Jones And The Dial Of Destiny will contribute to the recovery.
Chief executive Mooky Greidinger insisted the deal was a “statement of confidence in our company.” But his days seem numbered as he and his brother Israel – who is deputy general manager – are about to be replaced.
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An analyst said the siblings had their chance and that “now it’s time for someone else to try.”
The Greidinger family currently owns about one-fifth of Cineworld. But the company was devastated by the pandemic and racked up huge debts from its costly acquisition of US rival Regal Cinemas in 2018.
Regal Cinemas’ former chief financial officer, David Ownby, is the preferred candidate to take over as CEO, according to The Financial Times.
Cineworld, the second largest cinema chain in the world after AMC Entertainment, said it was still looking for buyers for its operations in Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania and Israel.