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Great post wellington. We are in a real complicated scenario, you have to also bear in mind, next year cine should be profit making again, like it was before covid.
"Should" is very different from "could" (which consequently is very close to "could not" as a matter of probability), although I'm not surprised by suggestive narrative given the pool of retail and financially inexperienced investors here.
Equity is negative, that's the fact, there's not enough assets to pay all creditors (fact number two) - which is a technical definition of balance sheet insolvency.
As for debt - collateral has significantly deteriorated, real value of assets they have on a paper is much lower (which makes situation worse).
I guess the point being made is the debt.
Why does it all have to be cleared just because one impatient creditor wants theirs quickly.
Just sort out what needs sorting first.
"They are not looking to get rid of all debt! They are looking to refinance and get through the next 12 months as things are going back to some kind of normality!"
Thats's not true - they are looking to 'deleverage' the balance sheet. Which means severely reduce the debt (comprehensive was the word I think they used) by a very significant dilution of shareholders.
The company has told you this is going to happen and folk still don't seem to want to believe.
Wolf, to deleverage is to reduce outstanding debt without incurring any new debt. Judging by the rns, they are awfully optimistic. I don’t know how the are going to manage that, given they have also had really poor past 12 months.
They will have to give the creditors an offer they find palatable - which will basically be most of the equity with the creditors taking a big haircut and then enjoying potentially the prosperity of the new streamlined debt reduced CINE.
At the minute as things stand they are looking at total loss.
RNS
regarding an evaluation of strategic options to both obtain additional liquidity and potentially restructure its balance sheet through a comprehensive deleveraging transaction.
Potentially,if ,coulds ,should ,but and maybe
Nothing is set in stone and they might not find an offer to deleverage that meets there expectations
Few more shorts reduced according to short tracker ATB
Wolf, Cineworld have informed shareholders there will be significant dilution, not a complete wipeout of shareholders. I don’t understand what part of that you don’t understand?
Wolf, cine can’t really offer anything that the creditors will find palatable. This 38 million mktcap has nothing, other than let it continue so it can pay back its debt. Putting it bluntly and my favourite scenario, they will slap them with a little punishment and lend them some more money.
Cineworld Group plc (CNNWF) in US keeps selling, -22.55%
https://finance.yahoo.com/quote/CNNWF/
Melonhead - by total loss I was referring to the debt holders if they don’t carry out the D2E swap and CINE goes bust.
‘ They will have to give the creditors an offer they find palatable - which will basically be most of the equity with the creditors taking a big haircut and then enjoying potentially the prosperity of the new streamlined debt reduced CINE.
At the minute as things stand they are looking at total loss.’
Look at the volume....less than 800,000 shares traded...less than $25k in value....some sell off...lol
‘ Wolf, cine can’t really offer anything that the creditors will find palatable. This 38 million mktcap has nothing, other than let it continue so it can pay back its debt. Putting it bluntly and my favourite scenario, they will slap them with a little punishment and lend them some more money.’]
A debt free CINE is worth more than £38m. Creditors forgo their debt, they take most of the equity and CINE goes forward to try and revive their recovery plan. Creditors have taken a huge haircut but have a chance of recovering something in the new business going forward. That’s if they are even interested in holding what would be a significant stake in the company.
At its peak, Cineworld was not worth 5 billion. Probably will never recover to £3 a share. Lenders taking control of a company with so many issues and politics. Would be lucky to get it to a billion. There best bet is lend a bit more and look to recovery of debt in the long term.
Sorry Wolf, understood.
Best hope for it to recover to £1bn. Plse let me know where you get your drugs from! The market cap is currently £40million. And you are talking about a 25x recovery from here. Please please please read the warnings of the financially literate posters on here. Unless you are prepared to get involved with the debt of Cineworld which may in a year or 2 entitle you to new equity in the company then take the 3p out r so that you can and move in. This is - very sadly - another dead parrot of which in the coming weeks and months there will be a plethora more. Unlimited energy rate rises for businesses? Cine is only the start.
My point entirely pi…..and as with lies eg Herr Schicklegruber…..if you tell one make it a big one then people will believe you. Look forward to another 400 or so insightful contributions tomo. ATB.