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Because there are rumours in the news that CINE have already appointed administrators for the holding company.

By the end of the week, we are hearing that the company will be in administration and the assets will be handed over to the lenders and approx $4bn of debt will be deducted from CINE.

Of course, only rumours, but wouldn't be surprised if it happened. It has been a long time coming.

Hey @iParsnip, hope you’re well.

Yes, still holding the full amount. Now down 98% on it.

I’m considering selling ahead of suspension, mostly because I don’t want to see that crap in my portfolio for the next 1-2 years until they settle the equity, might as well just sell it off, get it out of the portfolio and move on and recover.

Do your own research and not advice as always, I have heard that there is some sort of law firm that is representing shareholders. Not a clue how that would work, who is paying them? This sort of thing happens all the time unfortunately, just straight wipe out like that. I’m interested to hear your thoughts.

Presumably now by the end of the week we will get the suspension RNS and that will be it.

My question is, does this mean that the court has approved the restructuring agreement? Can CINE proceed with delisting and putting the company into administration if the decision of the court is still pending?

Hello all, I’m interested in getting a synopsis on what has happened here since? I have seen a docket with the numbers which shows a big juicy zero for us equityholders.

Presumably all that is left to do is to get it approved by the judge (on the 28th of June?) and then it is finished? Once approved, stock is suspended and then delisted and stuck in our portfolios for a year or two? Can someone confirm if that is the case?

@Roberto and @ryanf, good afternoon. I will just place my 2 pence down here on the £75m placing.

It was completely and totally unnecessary and was most certainly not used to pay down the existing facility. If you take a look at Page 38 in the interim results, you will find that the RCF was at £258m (74%) utilisation. The new facility at £275m would have been sufficient to cover the pre-existing utilisation level of the previous RCF, no need for an additional £75m to cover anything (at least to the best of our knowledge).

The fact they have raised that extra £75m could mean a variety of different things:

-Have they drawn upon the RCF even more after the interim results, resulting in that £75m being needed?

-Maybe they raised the £75m in anticipation for the higher financing costs.

-Maybe the £75m is there because the company forecasts they will need that extra in H2?

One thing is certain, however, and that is that (based upon the figures in the interim results), the £75m equity placing was not needed to compensate for the reduced RCF. I also made this same mistake in thinking that £275m+£75m = £350m= previous RCF level, but once you see how much the RCF was actually being utilised, you will find that the £75m had no part in the RCF reduction at all, it is quite literally extra money in ASOS’s pocket.

To my understanding, nonetheless.

IIRC, they don’t have to fill in and send the TR-1 straight away on the day. I have seen TR-1s before that are 2-3 days after the fact.

I also think they don’t need to disclose until they stop acquiring/disposing, so I wonder if it is possible for them to still be disposing the small remnants today. We all saw what happened in the morning where it hit 330s.

Low showing as 337.5 on my side, congrats to those that snapped up at that price.

Interesting new concerns about the debt level.

NEX reducing their gearing ratio from 3.6x to 2.8x between the last 2 fiscal years. Their target is between 1.5-2.0x. One more fiscal year like 2022 and their gearing ratio will come down to their target range. Considering how decent the reduction in gearing was, I believe the dividend was justified. If gearing remained the same or increased, and then the dividend came back, then I'd be concerned.

I will also add that the lenders blocked NEX from issuing any dividend if their gearing and interest ratios were outside of certain ranges (page 53 of the annual report). Their improving gearing ratio (3.6x -> 2.8x) and their interest ratios (6.3x->8.6x) meant that they were permitted to issue the dividend according to the covenants and conditions of their lenders.

What exactly is it that people are so afraid of?

@Skeletor, although I am a first day investor in this company, I will add the following:

We are in a cost of living crisis, where a decline in discretionary spending is often the case. ASOS also has a huge backlog of inventory. Although not ideal, can we really blame them? A lot of that backlog would have been from when the macroeconomic environment was booming.

With respect to the financing costs, this was also an issue I expressed. I am yet to find/look at the terms of the new RCF, but it is safe to assume that the £55m in RCF financing cost is not payable instantly. We just took the new RCF out, so it is unlikely that any fraction of that £55m is due soon. Once we see the details of the RCF, we will be able to find the frequency of those interest payments.

This is an issue of needing to shift the business to produce profit in a different macroeconomic environment. As someone mentioned earlier, this was a reliably profitable company over many years before all of this happened. It is just a case of whether you believe the restructuring will be sufficient to return to profitability, and whether they'll have sufficient money to get there.

Based on the cash flow from the interim results, ASOS has about one full year of cash remaining if they continue to operate like this. At the very very bare minimum, H2 must be break-even, ideally profitable. If that is the case, I believe that ASOS will recover just fine. It is up to you whether you wish to expose yourself to that risk, although I think we can all agree that the potential upside here is huge.

@shaml - I too used to work in a warehouse which had a small part dealing with returns. I can understand the struggles that ASOS faces with returns because I have seen all sorts of rubbish flowing through returns. People ordering high heels then returning 10 year old worn rubbish.

That is just something that retail companies need to deal with. It was still an issue at ASOS even when they were at £50/share, and they appeared to be dealing with it fine.

@knowbodyouknow - I also find at ASDA that they have a small box with a secure opening to place return parcels in. You scan a barcode (presumably from the return confirmation) and drop your parcel into the box and close the lid where it is stored securely.

A potentially good idea to tackle the returns would be to partner with another high-street retailer with a lot of outlets.

I’ll give an example of Tesco. Tesco has many outlets all around the UK. ASOS could negotiate a contract with Tesco to take in all ASOS returns, and Tesco deals with the transportation of the returns. There are trailers and lorries going to these Tesco’s to do deliveries every day, so it could be well worth the money for Tesco to just chuck on another cageload of return parcels from every outlet. Tesco already does this sort of thing with EVRI/Hermes, but they don’t deal with transportation. Tesco do deal with the handling though.

All these ASOS returns wind up at one of several large distribution centres of Tesco, where ASOS just comes with their lorry to pick them up. They will still need to pay Tesco for that sort of service, but they could certainly save a lot of money compared to the current process of paying individually for each item.

CEO is only towards the start of his career. When I did some research I found he finished his university education in 2001.

He is very well incentivised to perform well, if he throws the company into trouble then as you rightly say it could spell the end of his career. If you wreck a company as large as ASOS like that, it will be very well known.

Much unlike the CEO of Cineworld, of which I am also a shareholder. CEO there is 70 years old, we are hearing that after the restructuring is complete shareholders will be wiped out but CEO will take a nice payout. No problem for him because he is at the end of his career and couldn’t care less.

Great news, looking good so far. A further share purchase from the CEO, this is what every shareholder wants to see from their company.

Manic activity in the last hour or so, CEO needs to repair his credibility asap.

I think the equity issuance after saying no equity issuance 3 weeks prior is quite the issue, what we now need to see is the Q3 update showing some decent progress and the whole H2 being profitable.

Tomorrow is another day so we dust ourselves off and come back again.

@wakeyinvestor, very much the same. I missed 395 flash the other day, so when I saw 397 today I decided to dive inside.

Obviously not the very bottom as is now clear, but either way let’s wait and see.

It could be nothing at all. ASC has been on my watchlist for some time and this is not the first occasion that it has just dropped like that with no cause.

We also have a very small market cap, so very easy for someone to influence the price, especially when the volume is low.

Just added some at 374 and some at 372.

Let’s see what happens.

Decided to take a small position here at 397 earlier today. The recovery now really is dependent upon whether the CEO can deliver in H2 or not.

Absolute carnage in the final minutes, someone large selling off or something back-handed going on behind the scenes.

Strange how we get an RNS stating director buys and we hear of Mike Ashley buying in the past week only to see 8% reduction in one day.

@Pitro - thank you for your response.

@RobertoLarcos - just some thoughts on my mind since the interim results. I have seen it happen in other companies before where they attribute income from one-off sources like that and use it to produce a profit.

@badjob - thanks for your response as well. My view was that choosing to undergo the refinancing of the RCF now of all times means that they foresee some trouble ahead, and are doing their best to prepare themselves.

Good point about the CEO, it is quite shocking that just 3 weeks ago we were informed that there was no need for an equity raise. However, if it prepares the company for the next half-year and is used efficiently to produce profit, I think most of us won’t mind.