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Hey !what ! ...what u mean no £1.50 in sept ....
I already spent it :-(
Mountainous I get the interest rate applicable being higher than the companies total debt average from the wording of the release.
It doesn't state this additional liquidity reduces the overall average.
It doesn't state it keeps it exactly the same.
It DOES state it doesn't MATERIALLY IMPACT the overall debt rate.
That does mean (to me anyway) that latest rate is higher than all debt average.
Do you think those involved would at this stage offer a rate significantly lower than the recent lending they gave?
That WAS higher than the companies overall average.
The details are provided by company if you do not believe what I am saying.
That previous 200 odd million was supposed to do EXACTLY as you state this is to do.
So again if not needed or 'possibly" needed now why add to what was already an additional set of lending.
I am happy the company has been able to achieve this (without any apparent fuss like we have witnessed previously in media).
I am not happy it is in a position it feels the need to further add to debt and cost of financing said debt.
As you rightly say they may use only part or even none of this tranche.
It is also good they have been able to ease restraints from lenders on required liquidity at any time and ease covenant measures.
Again however it is not good they deemed it necessary.
Mountainous agreed my wording could of been better.
But my overall message is the same , I wouldn't pop to people who have already lent me money to ask for more just in case , this wouldn't of been done over a phone call and mooky would of had to tell investors why he believes he may need more money , they clearly have agreed with him to offer him it.
Clearly they have seen the accounts and can see there isn't enough in reserve on a just in case scenario. It also leads me to believe fimancials won't be brilliant based on that alone , if they were great then why secure more funding if needed.
This thread has gone very off track and it's easy to pick out certain lines on a thread , it's done very well here. Let's not forget my opinion I was trying to share , which was simply based on today's news In my opinion I can understand why the s.p has dropped.
Needing the money, taking the money , might take the money , securing it not using it etc etc sends a message that not all is 100% rosey , if it was you wouldn't need it.
I also find it staggering 1.50 September possible s.p predictions were not met with the same manner.
As a positive, I guess it suggests that a Rights Issue isn't imminent, which is hardly surpising as the Greidinger clan wouldn't be able to fully take up their rights and so would get diluted.
As a negative, it suggests that the business is struggling more than anticipated and more of the Enterprise value has gone to Debt rather than Equity.
There's no reason why it can't swing back again, but it does suggest that it will longer than hoped for.
Personally I think we are well into the end phase of this pandemic and by October it will be firmly in the rear view mirror for the US and Europe.
We are, however, at the mercy of more policy mistakes from governments doubling down on the fear narrative.
Your comparison regarding your use of a loan vs cineworld’s use is unreasonable and disproportionate. This isn’t a standard loan that Mooky and his pals went down to the bank for the fun of. It is an incremental facility. You can dip into it when you need it. It is more of a credit card rather than a full on loan. It may well be that he uses £50M out of it only. It may even be the case that he doesn’t need it at all, it’s simply additional liquidity that is there and ready to be utilised if required.
As he stated in the RNS, they are constantly monitoring how the virus is moving. Having seen that the US isn’t doing too well with their numbers, and given the uncertainty in the UK regarding COVID from the government, it is only natural for one to want to put safeguards in place to protect the company. If we see another situation which requires a lockdown in Q3 or Q4, then the great slate of films will likely be postponed or the UK/US may not be open when the great movies in question premiere/ may be moved to streaming etc, and cineworld will not benefit from it. That wouldn’t be great for the company, however imo we now have a safety net for that situation.
If this $200M was a straight up conventional loan, then I think it would be reasonable to consider your point of view. If the company was in deep trouble like that, I don’t think they would have gone with an incremental loan facility like this. All imo.
Mountainous my post was mainly questioning why I don't believe it was unreasonable to expect a drop.
I don't expect it to be reasonable to see rises up to 1.50 based on this rns either.
I was very clear that I believe this is good for long term holders , it secures time more then anything , something cineworld needs.
In terms of mooky not needing the finance, the very fact he has gone down this route suggests to me he does.
For instance I don't go down to a bank apply for a loan and then walk out knowing I could of been accepted for the fun of it and just for kicks.
Mooky is to shrewd for that and will do what's needed.
My main point taking another 200m loan to continue to steer the ship out of the pandemic won't be seen as great to the market, I didn't say we were going bust , I didn't say we wouldn't survive , and I didn't say the s.p will now drip and rise ridiculous amounts.
Simply In my opinion I understood why it dropped today. And the market didn't react lile it did when finance was secured late last year.
Where are you getting a higher interest rate from the RNS FunInvestor??? There’s reading in between the lines, and then there’s inferring something that had nothing to do with the RNS at all.
In terms of what the original poster of this thread has said, and in addition to FunInvestor’s comments; This is an incremental loan facility. It is there in case they need it. Mooky didn’t just go to the lenders and ask for $200M and got it on the spot. This is an extra drip of money in case it’s required. This may very well be Mooky just anticipating some kind of new restrictions for the winter and wanting to prepare an additional cushion for the company.
To directly quote the RNS: ‘ the Group is now well-positioned to benefit from pent-up customer demand and the exceptionally strong film slate through the second half of 2021. The Group expects to release its 2021 Interim Results on 12 August 2021 where a further update on trading will be provided.’ Right before our eyes, they have told us that the company is in a position to benefit in the near future. We have a good film line-up coming and we’ve just been told that the company is ready to reap the benefits of it, all imo.
To add further, allow me to quote the CEO himself: ‘ we are very excited about the potential of the unprecedented slate of films in the second half of 2021 (mainly in the fourth quarter). We remain confident in the prospects for our business and continue to look forward to welcoming our customers back to the best place to watch a movie’. The guy is confident in the company’s prospects for crying out loud. Go and look at the RNS updates for Q2 and Q3 last year and tell me if he’s using the same language.
You see ‘debt’ and instantly think that imminent disaster is coming for the company. Look at the glass as half full for once.
On balance, the RNS is positive. The main takeaway is that lenders have faith in the business. All other considerations are secondary.
Yes, there seems to have been either some misunderstanding in full or part of today's RNS or just misleading by some bonkers.
From the release:
Further Liquidity and Covenant Flexibility Secured
Following the opening of all cinemas in June 2021, Cineworld is pleased to announce it secured $200m of incremental loans maturing in May 2024 from a group of its existing lenders. The New Debt Facility does not have a MATERIAL IMPACT on the Group's WEIGHTED AVERAGE COST OF DEBT.
Clearly states it does not have a MATERAIL impact (but that therefore infers it does have some) on the WEIGHTED AVERAGE COST OF DEBT.
On the basis this is a $200m incremental funding then OFF COURSE as part of a now c. $5bn debt it won't MATERIALLY impact the average.
It clearly costs additional money.
It is clearly inferred it is at higher than the average interest rate (from memory c. 4.5%)
It is not unreasonable to expect it to be at or around most recent rates (company loans etc can be seen with their term, rates etc from company reports) and the statement from the company points towards a rate higher than the average otherwise it wouldn't note it doesn't MATERIALLY impact the overall debt cost average.
It is NOT free money.
It DOES increase the financing costs.
It is from current lenders as was stated with the most recent debt prior to this and again this would strongly lead to a reasonable conclusion on terms not suddenly being rates of a few years ago.
Today cineworld announce a RNS to say they have recieved extra cash to help fund the business while it steers its way out the pandemic and on the way to the recovery we have all invested in.
Today's announcement has led to calls of could be 1.50 by September and questions on why the s.p has fallen on such great news. Which I find a little bizarre, and I'm more then happy to be shot down and told otherwise. Bit it's only great news to some. (Lth)
Sure as a lth todays cash announcement makes sure we see beyond the pandemic , it keeps us alive and kicking and makes our investment a pretty safe one long term. It enables us to have time on our hands while cine sorts itself out. But that is long term.
The market doesn't always see long term they often see here and now, mooky DIDNT get the loan for kicks or just put in his back pocket to give a few theatres a new carpet , a new popcorn machine or a new handyman to change the light bulbs, he needed it for a reason. That reason prob shows we are still struggling financially otherwise he simply wouldn't of got the loan.
To say this is a good thing short term and we should double on price for this is kind off strange, any other company that needs another bailout wouldn't rise in s.p and history here says so too. Especially a bailout that's 200m
Last financials mooky delivered more debt , yet he managed to soften the blow by announcing more money secured , that was prob for investors not to bail , but the s.p dropped and lots too.
Rewind a little further and you have a exception but with reason, Shortly after he announced we were shut a few days later he announced more cash secured and the markets jumped , this was because at the time there was a big question mark on if we were to actually survive as a company , that cash injection was massive as it gave the markets notice we are not going anywhere.
I'm not at all surprised the market dropped today , as a long term holder its great news , as a company right now it shows there are still issues to sort , we are clearly not out the woods yet.
I wonder what damage we would be in if mooky didn't get the loan.
As mentioned lots today there are loads of positives from this, investors confident to lend the money , mooky confident on recovery as am I, bumper filmslate incoming. Etc etc , and now more money to secure future.bit I see no 1.50 in September and I didn't see huge rises today either.
So for me I kind off understand why the s.p dropped today and would expect the same thing to happen in any other company under the circumstances.
Of course my my opinion only thats clearly in the minority