The story of the business rise and fall of the Cineworld chain of movie theaters is also the story of the brothers Moshe (Muki) and Israel (Sherri) Gerdinger, the grandsons of the founder of the activity and its managers today. Cineworld, founded on the foundations of the Israel Theater Company, has grown to become a world-wide empire of cinemas, through merger and acquisition transactions.
However, the outbreak of the Corona epidemic, which shut down the activity of cinemas around the world, destroyed what was established for many decades, to the point of fearing bankruptcy proceedings these days. At the same time, a share plunged Cineworld on the London Stock Exchange by 94% in the past year, for a price that gives the company a market value of only 56 million pounds ($65 million).
Moshe Gerdinger who immigrated from Romania founded the first cinema in Haifa in 1930 called “Ein Dor”. His son, Kalman (Kenny), expanded the business outside of Haifa and, among other things, purchased the Chen cinema in Tel Aviv, when later the family established the Rav Chen Weis Planet cinema chains, and also entered the field of film distribution through the “Forum Film” company in Israel.
The expansion of Israeli theaters abroad was carried out by the Gerdinger brothers in the 1990s to Eastern Europe, mainly to Hungary, Romania and Poland, and later in 2014 the merger with the British Cineworld was registered.
The largest deal of the growing company was made in 2017, when it acquired the American company Regal, one of the largest cinema chains in the US, becoming the second largest cinema giant in the world.
The purchase was made at a price of 3.6 billion dollars, using leverage, and upon its completion, on the eve of the outbreak of the epidemic in January 2020, Cineworld was traded at a value of 3 billion pounds ($3.65 billion), managing 11,000 cinemas worldwide and employing over 37,000 people .
Liabilities of 3 times the assets
As mentioned, the corona destroyed the Gerdinger family’s business empire and led to the closing of the screening halls around the world, along with a decrease and delays in the release of films to cinemas. The deterioration in Cineworld’s situation also came against the background of an attempt to purchase the Canadian cinema chain Cineplex – which would have made it the largest in the world – a deal that was canceled in June 2020. However, last December the Canadian court ruled that Cineworld must pay compensation of approximately $1.6 billion to the Canadian company , and in response Cineworld stated that it will appeal the decision and that it is not obligated to pay until the end of the appeal hearing.
Although Cineworld concluded the year 2021 with a jump of more than 100% in revenues compared to the year of the Corona virus (to 1.8 billion dollars), the bottom line still recorded a considerable loss of 566 million dollars – after a mega loss of 2.65 billion dollars in the 2020 summary.
The company’s balance sheets currently have current liabilities of $1.56 billion, against current assets of $533 million. The total long-term liabilities (over a year) amount to 9.2 billion dollars, of which the loans it took out are more than 5 billion dollars. The deficit in equity stands at $345 million.