RE: FUTURES17 Aug 2022 13:12
This really only leaves one other option. Well, two in fact, the second being to go bust. The actual cinema chain is worth something, it operates and so on. It's that capital structure, the whole being balanced on too little capital and too much debt that is the problem. Going bust (administration say, or Chapter 11 even though that doesn't exist in England) would free the chain of the debt burden but also, obviously enough, it would kill any remaining equity value.
The other option is a capital raise which is what they mention. Or a debt for equity swap perhaps β but that would β Any deleveraging transaction will likely result in very significant dilution of existing equity interests in Cineworld.β So the equity would be worth near nothing that way as well. In fact, the more CINE shares fall, the worse any dilution would be to raise any particular capital sum or debt for equity swap. So, in a sense, this is indeed a death spiral.