Member Info for mountainous

@roxy, just out of interest, if we’re going to be diluted, then why would someone buy more shares and average down now? If someone was wanting to get their average down wouldn’t they wait until the dilution is undertaken whereby the price would be significantly lower than it is now?

The only reason why I can see that people would buy now is if they predict that shareholders will be able to exit with not too much damage, which would result in a really decent price rise.

@BlueBuxton - hello and good morning! I’m doing great, nice to hear from you too. Very big congratulations on your new job :) - I have not averaged down since last year, way too risky imo and just waiting to see what happens here. Although if all goes decently well, I’m sure you’ll be very happy with the averaging down. My cost basis is at 33p.

@daddy-c - nice to hear from you, indeed this thread has been quite insightful. As long as we don’t have a complete wipeout I think 7 years would be sufficient time to recoup the losses. CINE is a money maker, if it was not then the lenders would not have even bothered with DIP lending or even taking the company forward, it would have been wound down and the lenders would take what they could piecemeal to recoup their money.

@HNS, good evening and also great to hear from you :). I resonate with your comments there, CINE as an entity will be ok, the equity and what happens to it is the issue.

@Tegop, apologies for the confusion! I did realise after that it might have been a bit odd. I agree, with the pittance that remains, might as well just stay and see.

@sharefall, not sure if maybe you also misinterpreted the scale. I too have factored zero return, but remain hopeful.

@JunoCasper, that is interesting. So you’re 50/50 on the chance of wipeout. If Mooky manages to save us that will be incredible, you’re spot on there. Save of the century.

@Bonkers, great to hear from you again. I also resonate with what you have said here. With court documents now showing that the equity is due to be diluted (from my understanding of the posts over the week) it is really looking bleak. That being said, if the dilution is not extraordinary, maybe over the years there is a chance to reduce your losses considerably. All we can do is wait and see what happens.

@Ezyeh - +1 for the analogy :)

@Ianharding - good evening. Indeed it will, but it has been a damn long time. Anyone else remember when CINE said it expected to emerge from C11 by end of Q1 2023. Well end of Q1 is coming in 2 weeks and we’re hearing of extension after extension.

@Salem - nice to hear from you. I’m also in that range, probably around 7-8 for chances of a wipeout.

Hello all again, hope everyone is doing good.

Here is my question. Honestly, and on a scale of 1-10, how likely do you believe it is that we get wiped out, either completely or to a considerably high degree? 1 being extremely unlikely to be wiped out and an expectation of a large or all your initial investment back, and 10 being a complete resignation to losing all your money and being wiped out entirely.

I’m interested to see how opinions are amongst LTHs here, I’ll keep an eye out for every reply.

Thanks :)

@StanleyPro, good afternoon. That is my mistake. I have looked at the initial C11 RNS and indeed the UK and Jersey are included. So just the RoW portion is untouched.

@Srini, that was a mistake, it is the case that just the RoW is not included in the C11.

@RetailInvestor it makes sense, my primary question now is whether the RoW and UK component remains untouched. As you point out, C11 is not happening on the RoW segment, so part of me is thinking that CINE will allocate (proportionally or otherwise) the debt relative to the Regal segment and then that will be what the lenders have to play around with. RoW and UK will remain unaffected and may remain in the hands of us legacy shareholders? If RoW and UK is not subject to C11, then what rights do the lenders have to those assets? There may be a simple answer, but that’s what’s on my mind at this moment.

Overqualified? What? That’s a first for me, if I was an employer I’d prefer someone with more experience than required. Have you at all considered going into self-employment perhaps? I really hope you get some employment soon, keep trying nonetheless, there will be someone out there.

In terms of Nisan, we posted a question to him mid-meeting where we asked him what his plans were to reduce leverage to the net debt-to-EBITDA goal. That was where he said all options are open :)

With regard to the equity, I think if CINE released something really promising, a lot of people who are currently day-traders may opt to stay in and may see long-term potential. In the few days before McColl’s collapsed it was a day trader’s paradise, spreads were very insane and the price swings too. CINE will become the same if it appears there is very little hope, as people are only interested in making a quick buck. I do not think you will be able to find one investor who has invested since all of this C11 started with the full prospect of recovery, most of them are in because the sp is so low, and they believe it is worth a chance. Everyone else are people like me and you with high averages waiting it out for now :)

@HNS, good evening, I'm not sure of the exact meaning but 'purchase by a newly incorporated Group company' makes me believe that a new entity/corp will be spun up with the RoW assets there by default. Old CINE will then pay off the bulk of debts with lenders receiving x pence in the pound and taking a haircut depending on whether they are secured or unsecured and then the remainder will transfer to the new corp. The result would be a new CINE with just the RoW facility and less debt.

I could very easily be wrong, because what happens to the UK component in that case? RoW does not include UK because IIRC whenever CINE reported earnings or statistics, the UK portion was always treated as its own category.

C11 is only taking place on the US category. Does this also mean that as far as paying off the debt goes, lenders only have access to the US assets when seeking their funds, and the UK and RoW portion remains untouched and we shareholders are then left with those parts and the debt is dealt with?

@RetailInvestor, thank you. @BlueBuxton also attended. Mooky kept a nice, positive tone, but Nisan was quite serious about all options being open. Perhaps he foresaw C11 by that point once he saw the books.

A discord server has been opened by the chap who does the live-streams every Thursday, and they have calculated that the discord server itself owns circa 2% of the equity, and they were considering legal action if we get shafted. Not sure how it would work or what would happen, but I'm hopeful that we get something without it getting to that point.

Good evening @poorinvester, indeed, they did warn us back in August that there is an unlikely chance. I think the fact that CINE has come so direct to warn us has thrown a lot of investors off, myself included.

In a similar fashion to how we did it over a year ago, I congratulate you on your top-up. If we come out of this in a good way, then no doubt you will be very loaded indeed.

@bullsbears, the reason for C11 and not C7 is because the lenders still see potential imo. If they thought cinema was dead and there was no meat left on the bone they would have told CINE to pack up shop and give them the money. So lenders are happy to keep the thing solvent as long as necessary to take their money back.

@poorinvester, good afternoon. The difference is that CINE have told us to expect zero. This is the first time they have confirmed there is practically no chance. Keeping an investment here is taking the hugely minuscule chance that some miracle could occur that allows us to avoid dilution.

Considering the state of the RNS, I think we are lucky to have gotten a ~40% drop on Friday. If this RNS came out fresh the first time and if the majority of people thought they were going to get something, the drop would have been much more substantial, but I think it was helped by the fact that the majority of shareholders at this time are probably legacy investors from last year who are now down a minimum of 85-90%+ and see no purpose in selling now.

Hello @BlueBuxton! lol what a pickle this is remember when Mooky said yup, we’re all in this together? Nisan was very straightforward when he said that all options were being considered when we asked him what the route was to deleverage. Hope you’re keeping well.

It may be the case that the language is to repel prospective investors, but why would they want to do that? Wouldn’t they want the value of their equity to increase to brighten up the prospects of less damage to current investors in the event of a D4E?

My average remains just over 35p I believe, even if I get half back that will suffice.

With regard to Mooky, I think he may now be willing to create a new entity of CINE and perhaps the lenders have offered him a fresh stake that is close to or equivalent to what he has now.

If there is one good thing to come out of that RNS, it is that we now have clarification on what the part of the Takeover Code means. That exclusion of the Takeover Code rules likely means that no investor will get a say in whether to approve or reject any deal imo, and that should also include Mooky. This would render Mooky’s investment practically useless, as he will be down 99%+ at this stage and he would have no say in the future of the company despite being its largest shareholder. It doesn’t make sense to me that Mooky would make that big of a sacrifice without something else attached to it, unless he is really sticking true to the ‘we’re in this together’. If he decides to sell off the main component of the business in order to reduce debt and keep his original investment without any preferential treatment, then I think we all owe him a huge deal of respect for not throwing us under the bus. However if he takes a quick escapeway with the lenders, takes fresh equity and leaves us all to be diluted to the gutter, then that would be really disappointing.

In terms of an AGM, I would think so. If they don’t close the C11 process by then, I think we would definitely get one as CINE is still a publicly traded company. If they void any existing equity, delist and start afresh, I assume not?

@melonhead, I think that in the case of D4E, we would be left with something as all that happens is a lot of equity gets released into the market. We would be significantly diluted, and the percentage we would hold as legacy shareholders would be very negligible, and so would the value of our investments. This is $6bn in debt to be dealt with £31m in equity, there will need to be some huge dilution to even get rid of half of that amount.

Hello @WolfofWarks, thank you for that piece of info.

I don’t think we have come across each other on this board before, but at times when I’ve taken a small scroll through here it always appears that you have some detailed and helpful analysis on the info that comes out. Thank you :)

Thank you Bonkers, nice to hear from you and hope you’re keeping well :)

Interesting point @Tegop, indeed up until this point, they are not shareholders. I also don’t know how high up they are on the hierarchy.

A lot of unknowns lol

Hello @HNS, great to see you also, it’s been a while.

I agree 100%, the recovery of cinema is still underway. If this was not the case, then lenders would have started to look for ways to liquidate and get their money that way. It likely would not have covered the entire $6bn, but a good chunk of it considering the large US portion we have.

The ideas floating about that CINE will part-sell the business or go down the D4E route shows that lenders still believe that the business model is viable and will be sufficient to recoup most or all of their money.

The reason we have gotten here (as you rightly mentioned) is the Cineplex issue. The very first court document that had the Deputy CEO’s statement on states specifically that the Cineplex liability was a common concern when they approached lenders, and that it hindered their ability to obtain further liquidity. Maybe if there was no Cineplex issue and the economic conditions were less choppy, we could have secured some kind of refinancing of the debt. IIRC, Nisan Cohen stated he was intent on refinancing. It’s just a mix of unfortunate events that got us here.

Hello @Srini, nice to hear from you also. This is all like a small reunion. Also hoping for something miraculous, fingers crossed.

@Tegop, certainly it depends on what that sp floor is, we can only wait and see.

In terms of your question, ‘equity interests’ is basically another word for shares, but it covers a bit more. I think ‘equity interests’ would also include the convertible bondholders from 2021. Their bonds are yet to convert, as the price never reached the conversion level (I think it was 121p or something?) so CINE is also including them in there I believe. So all of us CINE shareholders can also be called individuals with equity interests.

‘No recovery of equity interests’ was the part that surprised me quite a lot. In previous RNS’, CINE told us that there would be ‘significant dilution of equity interests’, meaning we would be diluted significantly. This new ‘no recovery’ makes me feel like we are facing the prospect of a complete wipeout, because why would CINE change the wording like that?

The only thing I can think of is that CINE is trying to cover their own backside as much as possible. They may also be very unsure of what the final outcome is, so as others have said, they are giving the worst possible outcome to prevent anyone with equity interests coming after them saying they weren’t warned.