Cineworld of the Greidinger family on the verge of bankruptcy
The rise and fall of the global cinema chain Cineworld (LSE: CINE) is also the story of the rise and fall of Israel’s Greidinger family – Moshe (Mooky) and his brother Israel – the little ones -son of the founder of the family and the best managers of today. The Greidinger family built the world’s second-largest cinema chain, having started in Israel, but Covid has destroyed the global business, which could now declare bankruptcy.
Building on the cinema chain their grandfather Moshe Greidinger founded in Haifa, the Greidinger brothers’ power began in Israel, where they own Israel Theaters and its Rav Chen and Yes Planet cinema chains, and the company of distribution Forum Films, which has agreements with companies like MGM, Disney and Sony. Through mergers and acquisitions, they built the global Cineworld channel. But the Covid pandemic has destroyed what they’ve built over the decades and there’s currently real concern that Cineworld could declare bankruptcy. Over the past year, Cineworld’s share price has lost 94% on the London Stock Exchange, leaving the company with a market capitalization of just £56 million ($65 million).
In 1930, Moshe Greidinger, grandfather of the current Moshe Greidinger, invested in the Ein Dor cinema in the Hadar district of Haifa. An immigrant from Romania, Moshe Greidinger senior, had business interests in food, shipping and real estate and identified a business opportunity in Haifa cinema. In 1935, he opened the Armon Cinema in Haifa.
Moshe Greidinger senior died in 1946 and his son Kalman expanded the cinema portion of his father’s business portfolio by purchasing the Chen Cinema in Tel Aviv, which became the flagship cinema of the Rav Chen multi-screen cinema chain in Israel.
The overseas push began in 1997 when the Greidingers established Cinema City International NV (CCI) and opened their first overseas cinema in Budapest, Hungary. In December 2006, when Cinema City held its IPO in Poland, the company owned dozens of multi-screen cinemas in Hungary, Poland, Czech Republic, Slovakia, Bulgaria and Romania and soon after, the company had a thriving film distribution business. Despite their name, the Greidingers have no connection with the Cinema City channel in Israel.
The very big change came in January 2014 when Greidinger’s Cinema City merged with British chain Cineworld to form a company with an enterprise value of £503 million. Cineworld owned 1,500 cinema screens in the UK and the Greidingers held a 29% stake in the combined company and assumed the management positions. In 2017, Cineworld became the world’s second-largest chain with the acquisition of the Regal channel in the United States for $3.6 billion. The acquisition added 550 theaters with 7,300 screens to Greidinger’s rapidly growing empire.
First Haifa, then Tel Aviv, then the world
Moshe Greidinger’s Cineworld to buy Regal for $3.6 billion
On the eve of the outbreak of the Covid pandemic in 2020, Cineworld operated 11,000 cinemas worldwide, had over 37,000 employees and was worth $3.65 billion.
In early 2020, Cineworld had also agreed to buy Canadian chain Cineplex which would have made it the largest cinema chain in the world and in December 2021 a Canadian court ruled that Cineworld had to pay Cineplex $1.6 billion to not not have entered into the agreement. Cineworld is appealing the decision.
In 2021, Cineworld saw its revenue jump 100% to $1.8 billion, but the company lost $566 million, after losing $2.65 billion in 2020. The company currently has commitments of 1 $.56 billion against assets of just $533 million.
Published by Globes, Israel business news – en.globes.co.il – on August 21, 2022.
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