Cineworld heading toward a Twister

Founded in 1995, the year before disaster movie Twister was released, Cineworld looks set to encounter further tumultuous conditions as it seeks to put forward proposals to creditors in respect of a Part 26A restructuring plan over the coming weeks.

Expansion

Since the mid 90’s Cineworld grew rapidly under the control of the Greidinger family and soon listed on the London Stock Exchange. In 1997 Cineworld acquired Regal Entertainment giving it more than 9,500 screens in 10 countries and making it the second largest chain in the world. In 2020 Cineworld looked set to become the biggest global cinema chain overtaking AMC theatre with its proposed take over of Canada’s Cineplex Entertainment. Bu then the world was as you may recall was hit by a global twister in the form of the Covid-19 pandemic.

Demise

To compound matters Cineworld CEO, Mooky Greidinger, was convicted in an Israeli court on Tuesday for violating the terms of a merger by admitting to refusing to distribute eight children's films to rival chain the Lev cinema chain in Tel Aviv.  During the litigation Greidinger spoke about Cineworld’s demise “I don’t think there are many Israeli companies that reached a status similar to the world’s second largest cinema chain. But two-and-a-half years ago our life's work collapsed. Over the past two-and-a-half years, because of Covid-19, I’ve been fighting every day to save what we have built. I hope we succeed but it isn’t certain. The company’s debt grow because of the pandemic and our share price dropped by 93%.”

The pandemic resulted in the cinema chain seeking protection in the US by entering Chapter 11 proceedings in 2022 from which it emerged in July 2023. Following a sharp fall in its share value, Cineworld subsequently delisted from the London Stock Exchange in August 2023. In an attempt to revive its fortune Cineworld has since appointed a new leadership team including new CEO, Eduardo Acuna, who was previously responsible for managing Mexican cinema chain Cinepolis's operations in the Americas. Former Pepsi Cola executive, Eric Foss was also appointed as Cineworld’s new chair.

Restructuring plan

Meanwhile Cineworld in the UK are reportedly moving away from the possibility of finding a buyer and seeking to put forward proposals for a restructuring plan. VUE cinema recently emerged from its restructuring plan with creditors with optimism. Tim Richards, founder and CEO of VUE recently stating that VUE had emerged from its plan with creditors “in very very good shape”.

Cineworld, who are being advised by insolvency specialist firm Alix & partners are considering shutting 25 of its 100 cinemas in the UK and negotiating rent reductions . It’s expected that the deal will be put to creditors over the next few weeks at around the same time that the new Twister disaster movie is released. Let’s hope that there will be a Cinema still standing for you to watch from. Twister hits cinemas from 19th July 2024.

In other news Dyson look set to cut 1,000 jobs as part of its restructuring. Watch this space for updates.