Member Info for Hexam

Why do you always have to post twice?

Why do you always have to post twice?

I wouldn't be so pompous or arrogant as to tell someone else how to live their life especially not knowing them at all or their particular circumstances. Even less would I expect them to listen to me. Seems to be a favourite pastime for some on here though.

And since I neither encourage nor discourage anybody to invest or disinvest anything I think I can sleep soundly at night.

Wow BC - Is there any other group in society that you look down upon with your ugly and misguided sense of superiority or is it just those without a job?

The net debt is $8.9bn but $4bn of that is represented by lease liabilities which are not loans that need 'servicing' as no interest is actually paid and no debt needs to be repaid - instead they simply pay rent and so it is like any other operating expense in that respect.

The amount of interest actually paid in 2021 was $227m which is small in relation to expected revenues this year of approaching $4bn. In addition the business has clearly been generating positive cash flow (after interest payments) since at least May.

The reason the sp is so low at the moment is not the size of the ongoing debt in itself or doubts about cinema as a business model. Instead it is most likely due to:

- the uncertainty about dealing with the leverage covenant at 30th June for which they will need a waiver unless they can refinance instead
- the payment due to dissenting shareholders (if push comes to shove they can simply pay this)
- the forthcoming appeal which if they lose leaves them with a $1bn bill (though there are various ways this could be managed)

It is these short term obstacles that are dragging on the sp - not the longer term issues of dealing with debt or box office levels which have already recovered well and will recover further as the film slate increases into next year (after admittedly a lull expected in the next couple of months). Yes, costs are increasing, but revenues are increasing faster so long term profitability and sustainability are not really in question - they just have some serious and urgent short term issues to deal with first.

It's simple. The buys and sells information on this site is rubbish so doesn't mean a thing and proves nothing. Sells go through as buys and buys go through as sells on a regular basis.

@Tegop - I agree they are catching up but June 30th was an immovable deadline. It makes no difference now if they pay down to below 35%. The responses from IR made it very clear that a waiver and refinancing were the remaining options - with the chances of both improved because of the continued recovery in BO.

Base case was 85% not 80% and the date to pay down the RCF to under 35% was June 30th which it appears did not happen. As they stated, they are now pursuing a waiver or refinancing either of which should be very possible given that they have now moved back into profits recently.

Nothing wrong with a bear case if it is based on the truth which this badly written, unbalanced article isn't:

"With no meaningful income" - £3bn to £4bn sounds pretty meaningful to me

"Now slap on $3.5bn of lease liabilities that also incur interest" - A lie. They don't. No interest is actually paid.

"as of March this year, the firm has been enjoying the benefits of a full film slate" - Another obvious lie. That benefit is yet to come.

"I can imagine the horror of being handed a $548m interest bill at the end of 2020" - Has to be imagined as simply not true. Interest paid in 2021 was $227m. Again wrongly including lease liability interest as interest actually paid.

And another one, right on cue. Sigh.

Considered against many posters who have appeared here FP seems to me to have his head screwed on pretty firmly, has opted wisely to trade rather than hold this share, doesn't get too rattled by all the nonsense aimed at him and doesn't appear to need help of any kind let alone the kind of therapy you're hinting at.

Seems to be a common tactic on these boards though. Try to belittle those with opposing views, usually in a patronising tone which they think makes them look superior but in fact achieves quite the opposite, and so deflect from the real issues or perhaps their own insecurities.

Actually obtaining a waiver was the second choice. The first was to pay down the RCF below 35% so it didn't apply and only seeking a waiver if this was not possible:

"Under the weighted base case scenario, the Group maintains headroom against available cash and debt facilities throughout the going concern assessment period. Financial covenants on the RCF would not be breached as the Group would have sufficient funds to pay down the facility such that the covenant is not applicable. It is noted however, that the ability to do this is sensitive to admission levels not being hit, any further film delays and any a material rent payment that has not been modelled. As such, there is considered to be a material uncertainty as to whether the Group will be able to pay down the RCF as at the June 2022 covenant testing date. In the event that it is not able to a covenant waiver for June 2022 would be required"

I'm sorry but that's just nonsense. How can the production cost have dropped by 35% in a matter of weeks when difficulty levels are similar and the cost of electricity if anything is going up?

They say it is because of the decline in electricity use but that would only be possible if machines were suddenly much more efficient (not plausible even with a shift between miners) or difficulty had reduced a lot meaning much less was needed (which hasn't happened).

I also don't know of any big miner whose production cost (i.e. electricity only) is near $20k per BTC so maybe it is their starting point that is off?

I'm pretty sure the big traders rely more on their own research and not on just what a company says about itself.

"The premise of failure is a complete fabricated fantasy here."

No, it's not. The way the derampers bang on about it may be annoying and pathetic but equally ridiculous are those rampers that think the possibility doesn't exist at all.

The sp is where it is because of the high ($5bn) debt, the ongoing uncertainty over dealing with the 30th June obligations and the yet to be decided $1bn court case. It has very little to do with doubts over the recovery, inflation or whatever - it is simply due to the real risk that the business won't be given the chance to see that recovery.

Until those doubts are removed the sp will languish around where it is as anybody, apart from the more speculative punters, would be mad to pump any meaningful money into this but if/when they are removed the sp should take off.

Personally I think the odds are very much in CINE's favour simply because I cannot see a logical sequence of events that leads to bankruptcy without someone cutting off their nose to spite their face. The business has recently returned to profits and who would gain by forcing a closure? Besides, even if a lender did play hardball and be confident of recovering their own money CINE should have enough options open to them (as a now profitable again business) to deal with this and at not too much pain to the shareholders (e.g. a modest rights issue at worst). Of course I could be completely wrong but I accept that.

In the meantime no amount of childish squabbling on this board is going to make a blind bit of difference.

“Where are the rigs that are going to be using 200MW anyway.”

It’s the ‘intel rigs’ that get them to the first 200mW but they said they could ‘lean in or lean out’ on this order giving them some flexibility on cash flow. Looking increasingly like they will be delayed a bit unless BTC turns soon or they get more funding.

Yes, interesting - but is based on those very dodgy Arcane research numbers so not quite sure how meaningful it all is.

Hope they don’t raise that much capital via a US listing as that would be every bit as damaging to existing shareholders as a debt for equity swap.

I don’t think either is very likely - at least not of that magnitude.

I never said I’d filtered you. Another thing you made up. True I said it’s a waste of time engaging with you and I’m kicking myself that I’m wasting more time doing it again. I just wanted to clear it up the question though for other posters like Wolf and DC.

If you're so 'sure' then presumably you have some kind of evidence that makes you 'sure'? As it is the article makes no reference to it being an individual and I can see no logic whatsoever for the position being different for institutions.