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Thanks Wolf. That makes sense. So this is probably similar to what Elvis has mentioned - but would that mean that no matter what happens to UK/US - shareholders will be left with ROW?
If that was the case - would the SP look a little more optimistic?
Naturally its dissapointing to not get high bids - as everyones just keen to get this sorted. But as i said earlier - its exactly what it seems a lot of 'respected' posters seem to have said (not just on this board), that initial bids were going to be low as thats what typically happens.
Also - would Mooky have wanted low bids ? Possibly to show the lenders they are going to lose a lot by selling and so best to work with them and let them get back on their feet?
Im not saying 100% certain this is going to fly or anything like that - just that theres still lots stuff to come out here....I was tempted to add some more earlier today as the drop was inevitable - but just going to sit on what I have now and see how it plays out...
Anyone think they may be buying time and come
April and they’ve potentially had a strong March - Mooky goes back to a preferred choice of modest dilution?
Wellington I agree with much of your take on the situation.
I do find the CP issue difficult to get resolved - because the award amount is just ridiculously and unjustifiably large - that I just find it difficult for both parties to find common ground in the value of a compromise - whether thats an outright payment or equity.
I cannot see Mooky conceding anything in the $100m's and I also think it is difficult for CP to take something in the $10m's as theyll probably always kick themselves with 'what ifs'....
Unless the judge has the authority to give some kind of concrete route out of the liability - i can just see the award being kicked down the road.
I wonder if a new investor/strategic partner came on board there would be a way to structure the agreement - that in the event that the payment is ever enforceable - they take an additional chunk of equity at that later time...
oh wonderful - the two geniuses have arrived. Thank you
If you base it solely on individual bricks and a below 2019 revenue…then yeah I guess it could be viewed as less. But I feel you have to zoom out here. Businesses are often sold with a premium - and in the case of this operation - with the box office looking like it’ll Be back to normal Soon - there’s a lot of factors which justify a premium. It’s highly unlikely that someone can just overnight become the worlds first or second largest cinema chain, in some of the most important territories, with a fully functioning team/operation/network.
I have read a few people say quite confidently lately that they bought Regal for closer to $6bn, but I dont knwo for sure. Could it be argued it may be more or less the same at this stage - they have closed loss making sites, which impacts the bottom line positively - but revenue is still in recovery mode. But then add on top a potential premium of what your buying now is the worlds second largest cinema chain, with locations across two of the worlds key territories.
I honestly dont know for sure. I feel based on everything i've read the debt levels mentioned are lower than the potential value of the entire operation - and so there is some equity left to play with.
Also is it worth noting that it seems the only reason CW were not able to raise more funds was because of the CP situation - not lenders losing confidence in CW or cinema. So they may not have felt the debt was more than the equity - but rather faced a literal monster spanner in the works!
Yes I do understand that. My point was basically whatever the outcome I find it difficult to see a scenario where Mooky has lost 90%+ value of his prepandemic holding......however its calculated at the end (even if in the end it means hes screwed us over and that was his plan all along).
Little bit of dreamland (as no one can predict), but wouldnt it be so interesting if someone like Netflix came along and said they would make a strategic investment go into partnership with CW. Cinema has been pretty much a dinosaur industry in many regards, and working with an elite tech company, who have their own massive consumer reach - could be so interesting...loads more content, joint subscription cw/nf, leading tech for optimised scheduling.....
Like i said dreamland (for now lol)
I less knowledgeable about the finer detail on the numbers...so my view on a higher price is a lot more simplistic and more based on my 'intuition'.
- Debt is $5-$6bn, is the operation worth more (when you look at it in isolation). = Yes, likely. ITs not a simple process to put together the worlds second largest cinema chain as a fully functioning, profitable and coherent operation
- Cinema is making a comeback, and the industry is likely to get back to normal soon, and in turn CW make profits which mean CW could repay a re-configured debt profile = I get the impression yes
- Will Mooky have seen the end of year movie dry up and subsequent cash flow issues coming months in advance and so made plans = Yes, C11. If he felt he was going to lose 90%+ of his holding I feel very confident in saying he woul dhave been involved in his marketing process to salvage whatever he could well in advance.
Of all the eventual outcomes, my personal leaning is towards either the current group of lenders, rejigging the debt and taking a modest slice of the pie....or a new party will enter the mix and join Mooky, again taking a share. I would expect Mooky to be able to live with a halving of his equity.
Ultimately this is not a regular C11/bankruptcy case where majority of businesses are usually in declining industries where recovery is uncertain....cinema will come back and could quite well come back stronger. It was mentioned yesterday about where is the growth prospects, but for one, there is so much content being produced now by so many streamers, and they are coming round to the fact that they are leaving too much money on the table. A lot of this content is likely to use cinema to make more money.
Just my opinion, lets see.
a .20p price would mean Mookys shares are worth around 10% of what they were going into the pandemic. I expect it to be waaay more than that - as cant imagine someone like him giving up 90% of his holding without a bigger fight. I hope im right (although at this stage, i shouldnt complain if we sit at 20p securely, after everything we've been through).
Hopefully Tuesday they give an indication as to whether shareholders are likely to be left with something.
I think theyve already trialled the sports and im not sure its the most lucrative of options....but increasing the food offering has mileage and yes of course content - which hopefully will not only get back to normal - but hopefully streamers can come on board too.
Tegop are expecting the exit plan to be revealed on 21st?
Not really Wolf. Not like a restaurant anyway if that’s what your thinking. I’ve been to cinemas in dubai where you can buy proper food and have it at your seat, all you need is a table ideally. How many times are these big multiplexes full to capacity. Maybe they can just take a few seats out.
Anyway think we’re getting a bit too much into the finer detail there….point is there is scope for growth
Growth: yes sports, but also if they manage to persuade streamers to come on board on a big way that could open up a huge amount of content….also how about expanding the food range - in addition to hot dogs, why not burgers, sandwiches etc…so people don’t have to go for a meal and then movie - they can have both in the same place.
There’s loads of possibilities if they put their mind to it - which I’m sure they will
Yes I agree, I think its difficult for both parties to accept a settlement at this point.
For CP, how far do they come down from the $bn carrot they can see dangling in front of them....theyd probably have many sleepless nights if they accepted something like $50m compared to a potential $bn....and for CW they are not going to pay anywhere close to the award amount. The problem is the award is just so extreme its difficult to find common ground.
CW are likely to kick it down the road as far as they can and eventually try to get it reduced or overturned by the court.
Theres quite critical news expected sometime soon now - so I volatility should probably be expected at this stage.
I agree Jing1. Without Mooky - the outlook would have been completely different.
I can’t see the date of 21st on the Kroll site. Was this date agreed at the last update?
I cant see it being contingent on the CP case - as I cant see any immediate route for that to be resolved very soon. This process will likely be over by then. But I have been thinking about whether there is a way for any buyer to put in some kind of incentive for later down the line - that they would basically pay some more if the CP judgement was reduced.....but i cant think of a practical way to implement that at the moment