Fear the walking debt: zombie firms in loan-refinancing crisis
Coronavirus and the collapse in oil prices have ramped up the pressure on highly indebted firms
When Mooky Greidinger heard the release of No Time To Die would be delayed, the Israeli cinema tycoon knew he was in a tough spot. Millions of fans were disappointed when the 25th James Bond adventure was postponed for seven months, but Cineworld’s biggest investor and chief executive was gravely concerned.
With the spectre of empty theatres looming and a major squeeze on the company’s finances, it was not long before Singapore’s $100bn (R1.6bn) sovereign wealth fund GIC was in touch. It had lent Greidinger more than £250m two years ago so that his family could retain control of the world’s second-biggest cinema chain when it bought US rival Regal. Now Cineworld’s shares were in freefall and GIC wanted its money back.
“We took a substantial loan,” Greidinger says. “There was no issue until the coronavirus effect ... trashed the shares.”..