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No. Judge ruled against paying off their loan as illegal. DIP is only 784 million. They cannot pay off their loan and are not in the front of any queue. What you have written is wholly wrong.
Hexam explain this. The 52% of lenders tried to use the DIP to pay off their loans of 1 billion. Where has this other billion come from? Why did they not seek to pay this off. There total debt is only one billion. Hence why they tried to pay this off in full. Other 3.8 billion is HSBC, bank of Israel and a few others.
Feel you and a few others do not care for anything that does not follow the narrative that you and a few others are pedalling.
Are you being paid by certain companies along with others. Clearly not invested in this share or have any financial input. So why do you keep posting on board. I do not post on companies where I have no involvement. Why waste my time. IMO
The lenders involved in the DIp. Were 52% of lenders. Yet the debt owed to them was only a billion. Leaving 3.8 billion left. What kind of companies would be able to lend close to that figure. The only companies are banks. If you look up the banks that have lent to Cineworld. HSBC will be the one that comes up.
Plus they made sure Mooky sold his 8% family stake when he was seeking fresh financing after Covid hit.
Love to know what firms can lend 3.8 billion apart from banks. Maybe you believe private investors raided their piggy banks to lend to Cineworld..??
I suggest you go way back on this board and also look up the list of debtors to Cineworld. You will find HSBC top and yes they lent money for the regal deal…and are no.1 lenders to Cineworld.
But sure do not believe me. Does not change the fact they are the main lenders. And this will be proven over the coming weeks.
https://www.reuters.com/article/uk-cineworld-leveraged-loans-idUKKBN1F618V
Nope. They can use the 2 billion loss for five years. Look at Barclays Bank. They used losses in one year for next five years. To pay almost no tax. Even when they were making billions of pounds of profits every year after that. Lots of tax loopholes banks use.
All this information is out there. You need to do your research.
Also HSBC are not in the market to own Cineworld. They want there money. But can wait a long time, as long as they get paid interest. If they lose the money, they can offset it.
The junior lenders are struggling. But HSBC also has to look at the other businesses that get effected by Cineworld. Their exposure is not limited to Cineworld,
HSBC financed the deal to buy Regal. Their debts owed are over two billion. They are the main lenders and as such are the equivalent to having the first charge on Cineworld. Like your mortgage.
All other lenders, sign a paragraph which means they lend with the knowledge that HSBC debts comes first and there loans are subservient to theirs.
Hence why they have control of any deal.
Banks prefer not to make a loss. But can spin it to their advantage.
Company goes bust, they make a loss, but helps to offset tax for next five years. Hence the loss pays for itself.
Take shares which amounts to a massive loss and never recover their investment. Cannot use this loss to offset tax. Also with their share percentage, have to buy the company as well. Furthering their losses.
Nope. HSBC will let this ride. Will not take debt for equity and stop the other companies from doing so.
Main debt holders determine if the debt gets swapped. Junior lenders cannot do anything without senior lenders. HSBC has control.
Banks do not mind if this goes bust. As can use the losses to offset profits for years to come. Good old fashioned financial jiggery pokery.
If they do a debt for equity swap. Cannot use any losses to reduce their tax burdens in coming years.
So they are happy to see this company fold. Or push through and get back making a profit.
What they do not want is shares in Cineworld.
debt for equity is not in lenders best interests. HSBC and bank of Israel will stop it and have stopped it. Hence why the junior lenders tried to illegally use the Dip to pay off their loans.
The dip started at 1.9 billion. Once the judge ruled their action illegal. Changed to only 784 million.
HSBC stake in a debt for equity would pass the 30% holding in Cineworld. Forcing them to buy the company. That is not going to happen.
Even without the legal regulations and fact that the majority lenders wanted no part of the bankruptcy hearing. They are secure in their positions.
A DBE, say existing shareholders get reduced to 10%. Giving the lenders 90%. Would equate to 13 billion shares.
Say a debt free value of 2 billion.
Would see each share worth 15 p. Good for new shareholders. Very bad for the lenders. Also it ties them into the future of the company.
There best course of action is to freeze interest payments for 18 months. But ensure 80% of profits in that time go to pay off the capital debt. After 18 months. Interest to kick in at an agreed fee. But at least 50% of the profits still go to paying off the capital debt.
Lenders should look to the debts being cleared off between 5-10 years.
HSBC and Bank of Israel can wait for that. Others might not have the same resources. IMO
I think lenders are all divided. All also have different levels of financial risk and strength.
Not to mention regulations which impact any action.
Expect no debt for equity. Just not in the interests of lenders at present.
Studios feel the cinema sites closed by Cineworld will still operate.
Shows how much so many people cannot see the wood for the trees.
These sites are done. Cineworld will pull out all the sound and vision equipment. Probably owned by another shell company they have set up. No cinema operator will want the cost of renovation. On top of the sky high lease for the sites.
AMC will be following Cineworld and offloading some of their unprofitable sites in due course.
Studios will have less screens to show their movies. But there own fault for delaying and not pushing more movies into the cinemas.
IMO
In America. It will be a good thing. Get rid of under performing cinemas.
Streamline the he business.
Get the landlords to stop increasing rents by 30% and get them to be realistic.
Plus all the cinemas are there own companies. So no impact on Cineworld itself in winding down each individual cinema. IMO
Just mulling over why the 52% of lenders. Who had debts owed of a billion wanted to use the DIP to pay off their loans. In doing this they would no longer be down as creditors and if a debt for equity occurred, would not qualify.
Also the lawyer stated he was representing the 52% to try and hold sway with the judge. But also to state that the 48% were in disagreement with the 52%.
I feel they tried to pay off their loans with the DIP as the other lenders ruled out a Debt for Equity.
Seeing no other way to extricate themselves from their position. Tried to see if they could use the DIP.
Now the judge has blocked this. Negotiations next week will run and run. As the lenders cannot agree on the way to clear their debts.
Love to hear of any solutions that do not include debt for equity. As this is a non-starter now.
Lender meet Monday. Will not get news if any till Tuesday. Feel not hear anything till end of next week.
Big wait is the Cineplex court case.
I do not expect this share to do much. Maybe bounce between 3 and 4 pence. Till more of the bankruptcy court dealings are known and released. And the court case with Cineplex is completed.
Then this share price will either collapse or rocket.
Number of shares that can be issued depends on numerous factors.
Gs unloading some B shares and increasing A shares. Overall selling 0.6 percent. So now have a 3% share
He probably represents the lenders. Make sure Mooky does things correctly. IMO