Cineworld CEO, Mooky Greidinger, is going to retain his stake in the company despite the company filing for bankruptcy! In news that may be a blow to seething shareholders who have already seen over $1 billion (£848m) wiped off the market cap in less than 12 months. CEO Mooky Greidinger looks set to continue with a holding in Cineworld after expected chapter 11 bankruptcy in the US reports the Financial Times this weekend.
Once the chapter 11 filing is over the final line (expected to begin within a few weeks according to sources), the largest lenders, Eaton Vance, State Street will take over the company. Remaining shareholders who currently sit on less than 2.5p per share currently will see their holdings wiped out.
However, the man who has guided them into the current situation will retain his take on this restructuring. It will allow Cineworld to renegotiate over £3.3 billion pounds worth of lease liabilities. And (what many have expected to be the primary driver of this process) reduce its £848m pay-out to Cineplex ordered by the courts after Greidinger pulled out of its agreed takeover in 2020. The Financial Times also reports that the Eastern European arm of Cineworld sites are likely to be sold as means to pay back a large group of lenders.
Cineworld CEO Greidinger joined in 2014
Credit: Cineworld
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Greidinger joined the board at Cineworld for the first time in 2014 as part of the Cineworld takeover of Cinema City International. In 2017 the company began the start of what some analysts state was the beginning of its downfall when they acquired Regal Cinemas in the US for £2.9 billion. And then in 2020, they were due to take over Cineplex in Canada for a reported cost of £1.7 billion, but the pandemic hit and put a stop to that takeover which caused a legal battle.
Missed Payments
Credit: Getty
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The company expected to keep afloat based on the US admissions, but unfortunately, these have faltered against expectation, and Cineworld also failed to make a credit payment and shareholder pay-out to former Regal holders costing over £144m. However, despite the company’s debt load and financial troubles, the Greidinger family have continued to take out high bonus payouts to much derision from shareholders and the market.
Since 2014 the family have taken over £26m out of the company, according to This Is Money’s report. This includes over £3 million last year in the midst of the pandemic crisis and low revenue.
What do you make of the news? Are you shocked to hear that Cineworld’s CEO is going to keep his stakes in the company? Let us know in the comments below, we’d love to hear from you!
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