Member Info for ElvisRocks

What does the debtors advisor comment mean “… our lenders are effectively a bidder and if they become a stalking horse for third parties, we would welcome that” ….

Big Swinging Dick is back … aka Wolffie folks …

Would love too bulls, iPad technology won’t allow opening of link unfortunately.. keep us / me posted …

Where are you getting that from HNS?

832 is a Houston Texas code, guess we are barred from talking or asking “Houston, do we have a problem” …. !

Bulls on that international number you just posted for the status update can Joe Public phone in and are calls to this US number free on most mobiles (ie is it a freephone USA number), what time is the conference UK time?

Oh dear Wolff, you are taking heat again for your posts, what a surprise….

So is that you with your britches fully pulled up now Wolffie (Paddy) and back in the game for some gold old fashioned debate then? With your portfolio and monstrous short of Cine Paddy surprised you need to work? Would have thought your five year old is used to daily trips round Harrods in his toy Ferrari …

Imagine that folks there is in fact a Wolffie Junior! Hope you’ve got him an IG account so he can take full advantage of his CGT allowance Paddy!

Paddy (aka Wolffie), I’ll give you dispensation and you can pull up your britches and come back to the forum … no more balance sheet debates from me (unless someone totally goes off on one .. now stop Elvis, don’t start that again …)!

Is anyone listening in to tomorrow’s podcast thing, status conference I think you call it

Can Joe Public listen in and/or how quick do they post the audio!

Hey up Wolffie, didn’t see you there, you are quiet for a Monday … looking forward (not) to your views on things … why don’t you reply to smyths Q to me, you’re more on the money here … and it wasn’t a balance sheet question!

I agree, let’s no clog up the board … one last point on this whole “goodwill” or “leased assets” point … a new purchaser will have little more than an eye on what those numbers are in the balance sheet, they will come up with their own numbers what they are prepared to pay, and then some poor beancounter is left having to tidy up the accounting.

HOWEVER if you talk real world search on the word “consideration” in the accounts (and therefore possible adjustments to outgoing balance sheet values, goodwill or otherwise), you will see it referred to, for example, in the area of pension funding liabilities, Regal dissenting shareholders monies (now settled I think but still bumbling), poor credit rating upsides/downsides, all the hedging arrangements they have in place, payment of director bonuses and workforce pay awards, all of which a purchaser and seller will have to thrash out the final amount to be paid … this will affect their (purchasers goodwill) and any value the seller can extract in negotiation that is in excess / below book value.

I feel I have to correct you here Hexam

Nope Hexam, no blind alleys ..

So whatever a new purchaser pays for all the leased assets and liabilities they eventually want to take on (ignore fixed assets for now), if they pay less than what the book value is at transaction date (not 31.12), they get a BARGAIN, if they pay more for them, the OPPOSITE, they have “been ripped off” (or unable to negotiate better terms), either way that is a FAIR VALUE ADJUSTMENT within PURCHASER GOODWILL

Similar arguments get unwound on the current sellers goodwill and intangible assets … there may be items in both that the seller wants to negotiate on, do his/her best to extract some value for those figures (ie Fridays boring debate). But there will be fair value items wrapped up in that current goodwill figure that have value … I mentioned pension alignment, another one may be contingent consideration on something they paid for Regal a few ago that now gets unwrapped. We just don’t easily know what is in “that $4bn odd goodwill figure”

But at least we agree on the way a valuation will be done NPV and all that with a few asset / liability adjustments thrown in … and no figures left in Cines books after the sale!

… unless they agree to some later contingent payment or claw back asset benefit that is … but let’s leave it there!

Hexam, I am happy to dig my heels in like the goodwill point, but what will happen, let’s just say the least asset and liability was the same to start at ($4bn) and fixed asset expenditure on those leases was an NBV of $500m.

All those “book value” numbers will be transferred or “sold”, the purchaser will then make adjustments for leases rejected, new terms of leases in renegotiated leases that are staying, fixed asset write off that have to happen

… and guess what these will all be wrapped up in fair value adjustments called .. guess what … GOODWILL!

So both the leased asset $4bn right of use, related fixed asset NBV and $4bn lease liabilities will be going as transferred subject to purchaser adjustment in their books.

What were you really think was going to happen we leave behind a $4bn asset in Cines books the same way we leave behind $20m of cash or whatever. It’s called purchaser goodwill my friend!

I don’t think you can say that with any degree of certainty Hexam, there will e sub leases, head leases, landlord contributions all in the mix.

If it was one lease of $4bn (which is obviously isn’t there are 500 or more leases), at the end of the lease term after $4bn odd or more of payments the asset is unequivocally that of the landlord? I would doubt that. What would be known “an operating lease v finance lease” in old language

My point here is you cannot “sell/transfer” a $4bn liability if you don’t “sell/transfer” it’s corresponding $4bn asset … the purchasers balance sheet would be out for $4bn to start on take on!

Yes but Hexam, what happens if and when the leased asset, all leased payments are made (a long time away in Cines case, each lease will have multi year terms) … the leased asset becomes Cines owned asset

They wouldn’t be transferring “selling” the lease liability if the leased asset wasn’t going with it, both asset and liability in the region of$4bn each

For leases rejected, they will have to extinguish that (book) liability as well as it’s associated right of use asset and any monies spent on it (in fixed assets).

Hello Hexam, just one point on your post there, are “right of use assets” (in other words Cine fixtures and fittings spent on leased assets) not effectively a saleable asset, they cannot be stripped out and come with the leases that are not rejected

And whoever is doing the very many different valuations will probably doing one for the next 5-10 years out on a NPV basis of either cash, profit or something else …

hi smyth, my good friend Wolffie is the man to give you the answer here, my view is that there will be a sale of the US and UK operations but for how much and what the impact on dilution will be I do not know

Wolffie Mr Champ, my weekend hiatus of non posting is over, I promise I won’t pick you up or ask you to pull up your pants on goodwill if you give smyth the answer…

@sammy18, thanks for the post (it doesn’t immediately help) we are trying to get Wolffie to put his money where his mouth is … @wolffie we are not letting you of with this one … what is the available price and interest rate of someone who wishes to short Cineworld as of this Monday…

Tell us Wolffie, what price can someone who wants to short buy shares for and what interest rate would they be charged … it’s not a difficult question, … just give us the answer …