Administrators FTI support Grand Cinemas asset sales to Hoyts

15 January 2023 Consultancy.com.au 2 min. read

Western Australia-owned and operated stalwart Grand Cinemas has sold three of its locations to national chain Hoyts after running into financial trouble due to Covid-19.

Western Australian movie-goers are rejoicing after administrators FTI Consulting successfully sold a trio of Grand Cinemas outlets to national cinema chain Hoyts, following the former’s plunge into voluntary administration in November due to the impacts of Covid-19.

Hoyts has acquired Grand Cinemas locations in Warwick Grove, Bunbury and Currambine Central, with all employee entitlements to be honoured as part of the deal.

Administrators FTI support Grand Cinemas asset sales to Hoyts

Family-owned, Grand Cinemas has been in operation since 1928, first opening its doors as Hollywood’s silent era gave way to talking pictures. Jump almost a century into the future and the Western Australia chain continued to run cinemas in five locations, yet an already challenging marketplace exacerbated by local and international Covid-19 response measures proved too much to overcome.

In November, Grand Cinemas was left no option but to call in restructuring experts from FTI Consulting. “Some difficult news for us to share today – Covid-19 and the related closure and capacity limits for cinemas had a substantial impact on the financial health of our business, and we’ve had to get some outside help and have appointed administrators,” the company posted to social media at the time.

The cinema group noted that while some locations would continue to trade in the interim, the longer term was harder to predict while options were being reviewed.

The three venues picked up by Hoyts have remained open since, while Grand Cinemas’ two other locations in Joondalup and Armadale were immediately closed. FTI Consulting have stated that the acquisition of the former is under contract with settlement imminent, while the firm’s appointed administrators, Corporate Finance & Restructuring senior managing directors Ian Francis and Daniel Woodhouse, continue to consider options for the latter.

According to Francis, the Hoyts sale represented the best outcome for Grand Cinemas’ creditors, employees and customers, with the deal managing to preserve the vast majority of jobs and all customer benefits. “I am very pleased a sale agreement has been reached with a major cinema operator so swiftly, providing certainty to many of Grand Cinemas’ employees and customers, as well as an efficient outcome for creditors.”

Francis further described Hoyts, which has more than 450 screens and 50,000-plus seats across its Australia and New Zealand network, as a clearly substantial and experienced cinema operator, well placed to successfully operate the acquired locations and provide continued employment and a strong product for movie-goers.

Hoyts is not itself unfamiliar with the sale-side, acquired by Chinese giant Wanda Cinemas in 2015.