Member Info for Damodubya

If GCT were to default on the loan - the finance company take the shares...

That means that the shares are worth something to the finance company. More than the finance facility itself.

A 'charge' is simply using equity as a security on a loan.

Like a Secured Loan on your house.

@Ian

Yes mate, understood... my point was that the shares being used as collateral would not stop a takeover as they do not belong to the company per se...

I think there is a misunderstanding that the refinancing is for CINE, it is not, as you have reiterated.

I've done my sensible bit for the day... back to quip-fit.

*assumptions on

@Pur

Maybe so... I'm basing my thoughts on what I know at my level mate. I would not be able to make assumptions or subversions of the system to get the upper-hand in a potential takeover bid or other such move.

If it was a takeover you would simply purchase the shares at the value that the finance company placed on them. This cash would belong to GCT and then would immediately pass to the finance company as settlement for the debt.

It could mean the opposite...

That the confidence is there that the value of the shares will increase and that the dividends will also be reinstated and therefore would become more valuable to the finance company should GCT fail to repay it's loans.

If I was to trade something that were potentially going to be worth nothing in the future why would you borrow me money?

The reason the RNS has been issued is that by placing a charge on the shares it gives legal right to the finance company taking possession should the owner default. Again like putting your home up as collateral if you fail to repay a loan.

This shows that they have faith in both companies and there is a considerable amount of value attached to the shares to offset the failure of the other business.

Can I add that the refinancing is not for Cineworld.

It is for their holding company.

The shares are held by the company in trust "for the benefit of the children of Moshe Greidinger, CEO of Cineworld, and Israel Greidinger, Deputy CEO of Cineworld"

R=This states that the refinancing is NOT for CINE itself but for the other business... That the CINE shares have value to offset the cost of refinancing... and that the Greidinger family are effectively gambling their legacy on the success of both businesses.

Again, good news.

The fact that a financing company is taking shares in the business as collateral says everything...

They believe that the shares are worth well in excess of what the finance is. It is that simple.

Why on Earth would anyone taking pieces of paper worth nothing for a company that is failing as collateral?

They wouldn't.

This is good news!

This deal would only be done on the basis that the business is in a fit state to repay....

It's the same a any loan, you've got to show you have the mean to pay and are solvent , where there is risk you put up collateral.

The size of finance would not be the total value of all the business assets... it would be a percentage rate.... so if they did default they would lose their interests in the business...that doesn't mean the value of the business and it's assets disappears.

I loan 10k put up a house worth 100K , don't pay the 10K they take my house and sell for 60K ....basic ****.

"GCT is not required to make any debt service or amortisation payments for three years (absent customary specified events), nor is there any margining requirement." - I take this as good, it implies cheap, low risk refinancing.

"As previously disclosed, shares in both GCT and its parent company Global City Holdings B.V. are held in trusts for the benefit of the children of Moshe Greidinger, CEO of Cineworld, and Israel Greidinger, Deputy CEO of Cineworld. The Cineworld board is pleased to confirm that GCT remains a committed long-term holder of Cineworld ordinary shares and Moshe and Israel Greidinger remain committed to Cineworld as members of the senior management team and retain a significant family interest in Cineworld." - this statement basically says, we're borrowing you these and very much intended to take them back... Mooky is giving up his stake if it goes pear shaped. The boss is taking one for the team.

Same as me getting a loan as a company director and setting up a charge on my mortgage...

The only difference is that if they didn't repay they'd lose their control of the company, I on the other hand, would lose my house.

I presume

Refinancing by major shareholder of Cineworld...

They have basically moved an overdraft facility from one bank to another and put up their shares as collateral.

*in December*

We should see the Oxford Vaccine already delivered and being administered should the ramblings of multiple World Leaders be worth anything...

Basically - Hold on, get paid.

It's 'that's', that's how we spell 'that's' in the UK...Just so you know.

LOL

Sorry, am I missing something... what are you saying local lock-downs are causing?