Blencowe Resources: Aspiring to become one of the largest graphite producers in the world. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
No refinance required
Debt covenant negotiations are routine
See below from RNS about the worst case scenario CINE thought of -
"
The severe but plausible scenario models a potential second wave of COVID-19 in 2021 affecting several of the Group's territories to the extent that further prolonged, partial shut downs are required, affecting the Group's performance. The scenario forecasts a closure of major US states (representing 45% of US admissions in an unaffected year), 50% of UK cinemas and a territory in the ROW segment being required to close in full for a period of five months from January 2021. This represents a shutdown consistent in length with the period previously suffered in 2020, although the impact is less severe, following the more recent approach to regional/state rather than national lockdowns. Other sensitive cash flow drivers are consistent with the base case, including incurring a significant rent charge through a period in which large numbers of cinemas would not be operating.
The modelling for this scenario indicates that the Group would need additional facilities in order to continue to operate from early 2021, following the end of the current RCF extension. Financial covenants would be breached at December 2020 and June 2021.
"
So if there is a second lockdown and closure of cinemas in major US states for full 5 months only then the group would need additional facilities and only then covenants would be breached in Dec 2020!
There will be an equity raise but no one knows at what price that would be. Considering Mooky has his own shareholdings don't think he will agree for the raise at 20p? Once the equity raise is done, it is back to normal service for CINE.
Look at British Airways (IAG), they raised 2Bn considering their cash burn for £170M or so per week? CINE doesn't need to raise that much amount as CINE monthly cash burn is far less and now cinemas are open too. Even if they have to raise 1Bn then I imagine it would not be at less than 40p.
If there is a good news on vaccine soon then Dec convenent test should be a cake walk and I think Mooky want to wait and see till end of October on how covid plays out so am expecting that there will not be any equity raise until October end.
RS2002 just watch yourself here. I don't hold now as sated but wouldn't like to see you lose a lot of money.
The results were poor and everybody was willing for stronger words than "steady" for cinema attendances but the attendances just weren't there.
The price imvho is being raised yesterday and today for someone to sell into and to readjust their holding (probably MS or Jangho) and there has become a sudden unpredictability about this stock that I don't like in investments.
Macro wise yopu have studios now delaying releases and I will be very surprised if there is not a 2nd lockdown. Trying to negotiate debt coveneants when you may actually need to rsie more money is never a good thing.
I could be calling it wrong but it looks like a high risk investment right now as I just can't see the new James Bond film being released this year. Black Widow and West side story being delayed are probably good benchmarks.
Most likely? How have you come to that conclusion?
If a vaccine is approved before January, then say goodnight shorters.
Cine can survive until September 2021, if a vaccine or solution to covid isn't out by then, kiss goodbye to the UK economy all together.
Hello and goodbye Pavel. Adios Amigo.
@Amigo.... welcome on joining LSE today!. and your 1st positive post lol = another paid deramper.?.
@investoid
We are clapping at his honesty and feel bad for his situation. Its called humanity, try it sometime.
I really hope nothing bad happens to you, as karma can be a mother effer. If anything bad happens, I pray for people to treat you better than you treat others when they are down.
Most likely H2 2020 will be much worse than H1 2020 - More bad debt.
Q1 2021 is unlikely to reach the highs of Q1 2020 - More bad debt.
Debt burden is growing at an alarming rate, more bad debt lies ahead, at some point this all need to be paid back?
Low interest rates for sure is a huge bonus, depressed global economy would support longer term low interest rates - all in all, CINE is going in for a head wind of mounting debt?
"We are in advanced discussions with banks and we are confident they will waive the December covenant"
Mooky.
Good post and lenders are also aware that the current interest rates make it more lucrative to lend with their mark-up.
If a company has a good track record (like Cineworld) of passing earlier debt coveneants and in the case of December 2019, scoring 62% HIGHER at 3.4x rather than the required 5.5x ND/EBITDA ratio, lenders will appreciate that Cineworld is not the exclusively hit company in leisure because of Covid. Allowances will be afforded and this is why the BoD and investors remain optomistic that the H1 results are out, the bad news is reported and they now work on the roadmap to recovery with Q1 2021 as the next significant checkpoint imo.
Good luck to all investors.
@smalltrader
You lost all credibility when you said " I managed to bring my avg down from 80p to 53p."
You were on a 50% loss before you averaged down and still on a 27% loss.
Of course, rampers will clap at your musings.
Good post Small Trader.
My average is 75. Hoping it will go back up.
@small
Very sound balanced post
Recommended
Vodafone - £74 billion of debt
Unilever- £22 billion of debt
Centrica - £4.7 billion of debt
As long as Debt is manageable, we should be alright. Why the creditors are not calling in debt now instead of waiting till December?
There are many companies that are affected by covid and creditors are willing to provide exemptions whenever possible as they knew that they can't make money elsewhere as every sector is affected. Mooky said that he will try to get waiver even for December convenent test. can't see how December could be end of the world for CINE.
There could be equity raise but do not think it will be at 20p or 30p that some are dreaming. Remember that Mooky has put his own shareholdings as the security to get funding from Sandgrove. Why would Sandgrove agree to that if Mooky's shareholdings are going to get diluted? Or may be there could be some dilution but again Mooky bought his shares when SP was at £2+ ? so he would not agree for equity raise at the prices that some are dreaming. Sandgrove knows that Cinema is to stay forever. All the box office studios have postponed their releases to next year. Why would they do that if they think VOD is the place to go?
Ofcourse with the volatility in the share price this is not for weak hearts but this could come good for those invested. I managed to bring my avg down from 80p to 53p. Just need that bloody vaccine or a drug asap and I hope Bojo doesn't take any silly decisions regarding the closures. I'm sure he is following Trump and CINE's majority of revenue is from US where there is no lockdown despite high number of cases. All IMHO.