Member Info for Hexam

“Jangho have now sold out completely. So nothing holding this back now.“.

Are you actually being serious? There’s a long list of things holding the sp back. I could itemise them but they’re pretty obvious and I’d just get accused of de-ramping.

Jangho selling isn’t the only problem CINE have got at the moment!

"creditors are pushing for lower valuation
But there actions are doing complety the opposite?"

Jeff - The actions by the lenders to increase financing means that CINE has much more chance of surviving so in that sense you are correct (but if they didn't most of them would probably get next to nothing).

The pushing for a low valuation is AFTER that bankruptcy risk has been removed and this will be based on estimates of future cash flows. The lenders will be more bearish on these in order to get the best terms possible for them.

"If the current creditors were looking for equity could they have just refused the further funding and taken CW over anyway."

Jeff - I would argue that D4E is pretty much that anyway but in an organised and much more practical way. If they just refused future lending and the company just defaulted on its payments then surely the company would just end up in administration and they'd be fighting over existing assets which, as I think most people on here would agree, are worth a lot less than CINE would be as an ongoing business. So them making additional finance available means there is more chance of a D4E than the less appealing option of full bankruptcy.

I'm sorry - I'm not familiar with enough examples to give an answer (Wolf might?) and in any case no two examples are the same, a complication in this one being there seems to be so many lenders potentially involved. My only suggestion is to do several scenarios (e.g. $1bn, $3bn, $5bn) and see the range of answers it gives but it sounds like you're already doing that kind of thing.

If I had to have a stab I would guess about half the debt might be involved but it is only a guess and as some have already pointed out whatever the 'true' valuation should be the creditors will be pushing for a lower one and CINE will be pushing for a higher one. 5-8x seems a reasonable range but working out future CF/EBITDA is obviously the tricky part.

Good luck!

I get your point Penta but knowing the amount of debt isn't enough to work out how much equity is needed - as we don't know the equation but fair enough if that's what you're trying to do. Personally I think there are too many unknowns to try - but would be very interested in any answers and reasonings you may come up with!

@Penta - I don't know but although it is important personally I'm much more concerned about how much equity is in the swap than the amount of debt!

Jeff,

We know they have failed in at least some of their financial obligations, most notably they couldn't pass the RCF leverage covenant test (or pay it down to avoid it or get a waiver). I don't know exactly what the lender can ordinarily do in that circumstance but surely with Chapter 11 they can't do anything except make representations to the court along with all the other creditors? Chapter 11 is after all bankruptcy protection and so it's all in the hands of the judge now.

IP - I think you'll probably get your wish as the results are very much secondary to everything else that is going on especially given that all the main numbers are already out there.

"10 days to results"

@Internetpig - That's the formal results but they've already released the revenue, profit and cash flow figures for the first half of the year, along with the balance sheet, plus a very detailed outlook for cash flow up to June 2023. What else are you expecting?

"I said when all this fiasco began, they will be given money"

Well Poor that had to happen as they only had $4m in the bank. If they hadn't been 'given' it then it would already be all over. As Wolf says though they haven't actually been given it. It is temporary financing that is due to be repaid (whatever has been spent of it) as soon as any reorganisation deal is in place (or after a year if not).

For me it is highly likely that this (and probably some other debts) are exchanged for equity as part of this deal as I cannot see a viable alternative. CINE have projected their financials and they think they will need all that money to cover an expected shortfall in cash up to the middle of next year (of $783m). That is CINE's own projection, not mine, and also assumes nothing is paid as a result of the appeal.

You keep misleading people with the red herring of there not being much equity at the moment but, I'll say it for the umpteenth time, that doesn't matter in a D4E - please research it. For some strange reason you also mention the Debenhams model but I'm not suggesting at all this will go the same way.

You also suggest the next couple of weeks will really surprise me but we already know:

- The first half results (loss before tax of $318m and cash outflow of $217m)
- The projected revenues, costs and cash outflows over the next 10 months
- The immediate financing of $785m to get them through those 10 months
- That everybody is feverishly working on a deal so that they can go on beyond those 10 months

If a deal is done so quickly and without a D4E that would certainly surprise me so is that what you are thinking? I can't see that as possible so will be very surprised indeed - and ecstatic! As it is a deal including D4E at not too severe a dilution will in my view be a big win and will be more than enough to see the sp rise from here. So personally that's my (more realistic) hope.

"The 700 million is a loan to continue operations. No equity can be given for it."

Why not? It doesn't matter what it's used for, it is money the company will owe (once it has been drawn and used to meet ongoing costs) and unless they can pay it back (with what?) then would think it is very much in the mix to be possibly swapped for equity.

I don't know much about the zcash mining but didn't think it was that much now from other posts but yes, this drops the productivity a bit. Also 2.2EH was the start month hashrate and 2.5 EH the end so average would have been around 2.35 EH depending on when new machines came online during the month.

FP - the mining costs (which I presume are mostly, if not all, electricity) were $4.2m.

Other cash costs including interest were perhaps around $3m based on earlier months (q2 average was a little higher than this).

So maybe around $1-$2m for other things but certainly not enough to clear the Galaxy Loan.

Agree AB - it would be great if they could expand now whilst stuff is cheap but they simply don't have the money which is why others like HUT8 that have a big HODL have an advantage as they could choose too if they wanted - of course it's not the only criteria when comparing miners but in this respect ARB are in a bit of a cul-de-sac at the moment.

Thanks Jeff - I think I'm suitably confused now but bottom line is that volumes in the US seem to be tiny so not sure it matters much anyway (unless of course you're trying to trade in the US).

@BeastlyD - It looks like we've already got an update (on the financials at least) thanks to the link @antlev posted.

As to the Chapter 11 it seems like news is coming out real time with all the updates/submissions. Hard to say when the next 'big news' will hit.

Yes FP - I think you're right. I was thinking of a different '95%'.

AB - I just think Argo would be crazy to continue developing the other 600mW whilst BTC is so low, cash is short and they are losing money every month. Even if they could get funding from NYDIG (or elsewhere) it would just increase the debt and put them under even more pressure. Very risky.

My reading is that they have given up on the second lot of 0.9EH from the 'intel rigs' and are simply using the space this creates to host. If they thought they could get funding for the additional 0.9EH of intel rigs - or other machines - they wouldn't clog up the space left with hosted machines.

For me the hosting arrangement is a clear sign of a freeze on capex (unless it's already committed) until things improve which I think is a smart thing to do. If the deal is with NYDIG then when BTC does pick up they will be a strong position to move forward with the next 600mW. Just my thoughts though so could be completely wrong.

FP - I thought the 90-95% related to the 10,000 bitmain machines (which from the video are now all paid for)? In any event the last I heard mention was that they were $25-$35m short of getting to 4.1EH i.e. the bitmain machines plus the first 0.9EH intel all up and fully working.

Cheers Andy. Yes, this board can be informative but there are also a lot of people aggressively pushing their own agenda (both positive and negative). My only suggestions are to rely more on your own research (especially to verify or counter anything said here) and to ignore anybody claiming they know for certain what is going to happen. Good luck!

True FP but they must be running out of room in the first shed and I can't see them starting on another one any time soon - unless NYDIG are willing to put up more cash?