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they need at least 500 million. mkt cap is circa 300m. so present shareholders face wipeout if they dont take part in rights. however it may be the only route for money as debt holders are unlikely to offer more cash, only possible debt write offs in part, but in exchange for equity or backed with fixed assets. dont forget cineworld isnt able to take part in gov covid loan scheme as its debt is sub prime.
I think this time banks might ask for shareholders to put some more skin in the game before the waivers. Mooky has been reluctant to do any form of equity as it dilutes him if he does not participate but think he wont have much option now. Anyhow agree, they should eventually get waiver.IMO
Thanks Laidback,
I came into Cine in early August at 49p, after talking to a few friends in the City, and doing my research. Four of them had six figures personal positions in Cine at less than 40p. I've spoken to all of them since the results on 24th Sept, and not one of them have sold (or indeed show any concern), as they're all in it long, which is what i am. I guess if you look at it that way, you're not expecting an instant lotto win! Don't get me wrong , there's nothing wrong with a instant hit. I thought i'd won the lotto when the SP went up to 68p by 1st Sept, but this was just Jango being Jango. Interesting they still have their 5.56% holding accumulated between 19-21st September.
Anyway, good luck to all CINE believers, it's a great company, a great product, with great potential.
Excellent post Drifty69
Good points from Pray for, laidback and moola.
Regarding the Debt Covenant.
Some years ago my brother worked for Bank of America in the City. He explained to me that they had retail customers and corporate customers. When retail customers came in looking for a loan, they had to go through the whole rigmarole of credit checks, employment checks, banking history etc, etc for a £10k loan. But, when large multi billion pound companies with existing lines of credit needed a eight, nine figure loan, even businesses that weren't totally financially viable, they got their loans, purely because the investment banks would rather take a risk on giving out a large existing business a very substantial loan to keep them going, than refuse them and
a) lose the business and the client
b) have the client go bust.
Some people relate Mooky going to HSBC like a private individual would going to his/her high st bank, forgetting this Gentleman (and his multibillion pound company) have built up a relationship/rapport with HSBC's Corporate banking division over many years. With the business up and running again, and more and more sites reopening each month, Mooky will have few difficulties negotiation the waiving of the debt covenant to 2021 with his bankers.
We, of course need this confirmation, in order for the market to be assured of CINE's financial future and security. But, as we know, talks are currently underway, and it's in Mooky's interest to get them agreed asap, not only for his and the Company's piece of mind,but to reassure the markets. Once this is agreed the SP will rise nicely.
CINE isn't going anywhere but up!
GLA all investors
Surely at this stage in the game if needed all it would take is a commitment from Mooky to the banks to hold off paying dividends for a while after recovery and use that money to pay down the additional debts incurred. If not that then for him to lay out some sort of plan to pay back the loan. If he can offer them a clear plan they are likely to go with it.
GoG is almost at march levels. It might be worth a punt to and is a 3 bagger at the current SP. Thanks for bringing it to my attention. Will do some research and then make a decision.
I agree, cine is very risky at the moment, but as others have said, all the bad news is out in the open, leaving us only good news (bar lock downs) to look forward to. Sadly I can't see any news getting released until at least November.
Its a massive gamble. Will mooky get the covenant deal he wants? Will a covid vaccine ever get released? Is covid even that bad? Were cineworld on a downward spiral before covid even hit? How will PVOD play out? Will cine get approached for a take over? Is Hollywood going to recover fully? Just what does hold trumps hair on so well?
All relevant questions that nobody can answer at the moment.
Or 2021 could be the best year ever for cinema .... lots blockbusters delayed to 2021
@guitarman
1.80 is a possibility yeah, so is 19p. If covid vaccines are released early next year, then sentiment on shares like cine (and nex) will rocket, and we all know what can happen with good sentiment, we hit £1 on that alone, mid pandemic. Will it be a fair valuation at 180p? Hell no, cinema attendences will take years to get to 2019 levels. But since when have share prices acted accordingly to the market lol.
All quoted companies have large debts. Cineworld is now almost fully reopened, trading is encouraging, pandemic nearly over, big films lined up. Cinemas have not shut in local lockdowns. California is reopening swiftly
Just imo
Dyor
So we can post 19p but not the180p broker target ?
I really doubt there will be any form of equity capital raise because it dilutes Mooky and family if they dont participate especially in a rights issue. Considering the situation with its own family business where it has pledged Cine shares (we all know this from RNS), i dont think he will have that kind of money. Thats why he did a private placement of shares in loan market when he raised money post pandemic. If there is issue with covenant relaxation (which i dont think there be hopefully an issue), he will have other options like taking company private with PE.
He's been posting the same ramping crap for ages. Every bit as dangerous as the de-rampers. Filtered for me.
If the rerampers stop posting the 19p thing, maybe he will stop posting the 180p thing.
Lets be honest, if cine can survive until march without share diluting or rights issue, then it will head towards 180p.
If either of those two things happen, we will be lucky to have 19p.
Flip a coin.
Please could everyone stop posting the Peal Hunt 180p thing. It's moot and no one really knows what's going on. And I say that as a heavily invested LTHer.
Peel Hunt raised target from 140p to 180p recently