Former Cineworld boss, Mooky Greidinger, is planning a return to Britain with plans for a brand new cinema operator who is looking to buy some of the chain’s struggling sites.
Greidinger turned Cineworld into the largest cinema company in the world before it collapsed under a mountainous debt load when Covid struck. According to sources in the City, he is currently in discussions with Cineworld’s owners to convince them to abandon the struggling UK chain and switch to his yet-unnamed new venture.
Cineworld’s landlords are furious at the demands of radical cuts in rent as part of an aggressive restructuring agreement backed by hedge fund owners. After a lengthy court process, Cineworld’s landlords were left with the option of accepting rent reductions or kicking out Cineworld and replacing it with a competitor cinema operator.
Greidinger is credited for transforming Cineworld from a FTSE 100 company to a FTSE 100 one before he stepped down last year. Sources claim that Greidinger flew to the UK recently to meet with property owners.
Greidinger, who is backed by his brother Israel and a fellow former Cineworld executive, has not set a limit on how many Cineworld locations his new venture can take over. According to one source, it could be five, fifteen or twenty-five. Cineworld operates more than 100 sites across the UK and Ireland.
Greidinger’s audacious plan is supported by his former advisors. However, he has not yet appointed any banks or attorneys to help him. This is part of Greidinger’s plan to run cinemas all over the world.
A source from Greidinger’s camp stated, “We plan to return.” He declined to make any comments.
Cineworld, which employed 4,400 people across the UK and Ireland collapsed into bankruptcy in July of last year due to a £4-billion debt pile. Secretive hedge funds led by GoldenTree (the owner of Travelodge) seized control through a debt for equity swap.
Cineworld claims that it can only sustain its business if they restructure their leases
Cineworld claims that it cannot survive without restructuring its leases. Business bosses claim that if a restructuring is not agreed, the company will be insolvent. If the restructuring plan goes ahead, landlords, including nine local councils who have invested ratepayer funds in cinema properties, would be forced to accept large rent cuts.
Six closures were announced. Six more sites will be moving to “zero-rent” agreements under the proposal made to landlords. Ten other sites would be switched to a turnover rent, where they receive about 50p per ticket sold.
Cineworld’s advisors would reduce rents at 33 other sites to “market rates”. The landlords of the venues say that Cineworld owners would benefit more from new releases if Cineworld cut rents to “market rates”.
Greidinger has been hailed as one of cinema’s most important operators in his generation. He began working in his family’s Israel focused cinema business in 1970s, before he masterminded the expansion of the company into central Europe by the late 1990s.
The chain grew to be one of the largest operators after changing its name from Cinema City International. It merged with Cineworld in 2014, and became a new entity. After the $3.6 billion debt-fueled takeover of American chain Regal, the business rocketed into the FTSE 100. The company then agreed to purchase the Canadian firm Cineplex in 2020 for $2.1 billion, but the deal collapsed when Covid hit.
Cineworld, which employed about 45,000 people at its height, was the second largest cinema chain in the world. After applying for Chapter 11 bankruptcy in the United States, it was divided into geographic regions.
Greidinger, along with his fellow directors, received $35 million in compensation when they left the chain after it emerged from Chapter 11 last summer.
His return could disrupt the UK restructuring. According to sources in the landlord camp, if the 71 year old executive was able to establish a critical number of sites at Cineworld, it could lead an exodus from property owners. This would leave the hedge fund owners of the chain with a much smaller business.
Cineworld could also be forced to change its plans for reducing rents if landlords threaten to switch their loyalty to another operator.
Cineworld’s spokesperson stated: “With support from our landlords, Cineworld intends to deliver a cost-base that supports a long-term sustainable business in the UK.”
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