Cineworld, the world’s second-largest exhibitor, has gone through a prolonged period of uncertainty since declaring Chapter 11 bankruptcy last September. Now as the company approaches an April 20th deadline for finalizing its plan to restructure and reemerge from bankruptcy, the contours of a final agreement are becoming increasingly clear.
It seems unlikely that a rival exhibitor will be able to acquire Cineworld in its entirety, although “several entities” remain in discussion to take over its theatres in Israel and on the European continent. Offers to acquire the entire company were too low to provide any return for investors and cover the company’s $6 billion in outstanding debt. As a result, creditors will be granted complete control of the company, after exchanging their debts for stock ownership.
Once its creditors have assumed control, a shakeup in the company’s leadership is certain to follow. The Financial Times reported on Friday that current CEO Mooky Greidinger would be replaced by Regal’s former CFO David Ownby who will serve as interim CEO while the new owners determine the best leader for the long term.
For Greidinger, who was the third generation to lead the company that his grandfather began in 1930, the ouster represents a “tragic” disappointment. But his strategy to take on debt to expand by acquiring the large exhibitor networks of Regal Cinemas in the U.S. and Cineplex in Canada turned out to have backfired spectacularly.