Cineworld screens to stay open as firm files for administration in rescue plan wiping out shareholders
The troubled cinema chain Cineworld will file for administration in the UK as part of a bailout that will wipe out its shareholders.
The debt-riddled company, which received bankruptcy protection in the US last year as it struggled to recover from the pandemic, expects to appoint trustees in Britain next month.
That will put it in the hands of its creditors and leave shareholders with nothing – and a windfall for executives, who are about to walk away with tens of millions of pounds.
Cineworld said its 128 UK cinemas would remain open amid the release of blockbusters, including Barbie, starring Margot Robbie, Indiana Jones and The Dial of Destiny, and the period drama Oppenheimer.
Salvage deal: Cineworld said its 128 UK cinemas would remain open amid the release of blockbusters, including Barbie, starring Margot Robbie (pictured)
The bailout will see the company’s shares suspended and eventually delisted from the London Stock Exchange, after falling more than 99 percent over the past five years.
Shares fell 24.3 percent, or 0.18 pence, to 0.55 pence yesterday. In May 2017 they were 311p.
Cineworld has a revival plan that sees it hope to reduce debt of nearly £4bn. It aims to raise £630 million and agree debt financing of £1.1 billion.
This ends the long-standing relationship with the Greidinger family that has been running it since 2014.
Chief executive Moshe ‘Mooky’ Greidinger and his deputy, brother Israel Greidinger, are among several executives who will take home nearly £28 million as part of a deal to leave.
Chief Financial Officer Nisan Cohen and Chief Commercial Officer Renana Teperberg are also expected to receive payments over the next 12 months as part of a transition agreement.