Can Cineworld boss bring crisis-stricken chain back from the dead?
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After Cineworld boss Mooky Greidinger is convicted in Israeli court for a failed business deal, can he bring the broken chain back from the dead?
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When Mooky Greidinger received a criminal conviction this summer, he was devastated. He told an Israeli court it was something he never expected to happen.
But the movie mogul’s life wasn’t going to get any easier.
Two months later, Greidinger’s company Cineworld – which grew into the world’s second largest cinema chain – filed for bankruptcy protection in the US.
Optimistic: But Boss Mooky Greidinger Has Been Found Guilty In An Israeli Court
The near collapse was painful, both for Greidinger and his shareholders.
Documents seen by The Mail on Sunday show that the group, once worth £4.4 billion, was down to £4 million. The figure was far from the money it took to pay the 30,000 employees worldwide or keep the lights on the 9,000 screens.
“Two and a half years ago, our life’s work collapsed,” he said at his hearing. “Because of Covid-19, I have fought every day to save what we have built.
‘We were an unprecedented success story. I don’t think there are many Israeli companies that have achieved a status comparable to the second largest cinema chain in the world.’
However, the company has been given a life preserver. A multi-billion pound bailout agreed with Cineworld’s lenders earlier this month will enable the company to embark on a drastic restructuring process.
The cinemas remain open and the shares are still trading – albeit at a fraction of their peak value.
In a presentation The Mail on Sunday gave to creditors earlier this month, Cineworld laid out its problems on the Covid crisis and the delayed return of Hollywood blockbusters that followed. It described the pandemic as the “plot twist” in the group’s colorful rise and fall.
The presentation slides made little reference to the most ambitious deal, which marked the pinnacle of Greidinger’s ambition.
The $1.65 billion (£1.45 billion) deal to buy Canadian giant Cineplex collapsed just months after Covid struck. Cineworld has been awarded a £800m legal bill to pull the plug on the deal – weighing heavily on the group’s already growing mountain of debt.
The chain said the post-Covid problems were compounded by production delays that have delayed the release of films such as Marvel Comics’ James Bond film No Time To Die and Black Widow. It seems unlikely that queues in the foyers will match the 275 million visitors in 2019. Cineworld welcomed 80 million customers in the first six months of 2022. But the shares are trading at 2.7 pence – less than 1 percent from their 2019 high.
Happy ending? Romcom Ticket To Paradise starring George Clooney and Julia Roberts could help Cineworld as moviegoers head back to the cinema
Greidinger is hoping for other releases later this year, including the romantic comedy Ticket To Paradise starring George Clooney and Julia Roberts; Avatar: the way of the water; or perhaps, more accurately, the disaster movie Halloween Ends will help save the group’s fortune.
The company’s struggles have not stopped Greidinger from receiving lucrative rewards from Cineworld, including £1.48 million in 2021. Last month, The Mail on Sunday revealed that he and his brother Israel have spent almost £26 million of their money over the past eight years. Cinemaworld had received.
Barry Norris of Argonaut Capital Partners, who has a short position in Cineworld, has criticized the pay and bonuses as the company lost billions and received furlough.
He said, ‘These guys took money in good times. And in the bad times, they still paid themselves well.
“One of the things I can’t get to is how you can lead such a disaster and not resign yet.”
But Greidinger’s thoughts will soon turn to the Israeli courts that handed him his criminal conviction – a rare and dubious award for the boss of a London-listed company.
His conviction stems from a lawsuit filed by Israel’s competition authorities, which found that one of his companies was withholding films from a competitor in Tel Aviv. The court accepted a settlement offer.
“This is a difficult moment for me,” he said at the time. “I didn’t expect a criminal conviction after so many years.”
The court will decide next month whether he will receive a fine or a suspended prison sentence.
Despite his troubles, Greidinger said neither he nor Cineworld would be going anywhere anytime soon.
“Our goal remains to further accelerate our strategy so that we can build our position as the best place to watch a movie,” he said.
The story will undoubtedly have a few more plot twists.