The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
A federal judge is offering a guaranteed yield of more than 20% to lenders willing to advance more cash to now-bankrupt Cineworld Group Plc. US Bankruptcy Judge Marvin Isgur dangled the yield in the theater chain’s first Chapter 11 hearing Thursday after saying he probably wouldn’t approve a crucial bankruptcy financing package without major revisions. He took issue with the existing $1.94 billion loan proposal because it would mostly be used to repay old debt.
But with only $4 million of cash on hand, Cineworld desperately needs more money to stay afloat. Isgur promised investors the juicy return, which is similar to what they’d get under the original proposal, on cash advanced to fund Cineworld’s operations.
In exchange, the financing package would be tweaked to delay a $1 billion pay-down of old debt for several months, giving other Cineworld stakeholders a chance to investigate the financing and search for a better deal.
“It’s a very good deal and it’s within the authority I have,” Isgur said in the hearing, held by video conference. “I want to save the debtor, and I want to do it in a way that’s following the law.”
Lenders including Blackstone Alternative Credit Advisors, Cyrus Capital Partners and Credit Suisse Asset Management agreed to provide the $1.94 billion prior to the bankruptcy, according to court papers. They’re part of a group that holds most, but not all, of Cineworld’s most senior debt.
Isgur instructed the company and its lenders to discuss the proposal during a break in the hearing Thursday. The proceedings are set to resume at 3:15 p.m. local time in Texas.
The case is Cineworld Group plc and Great Escape Theatres LLC, 22-90168, U.S. Bankruptcy Court for the Southern District of Texas (Houston).
Reminds me so much of Buffett and BH.
No overly glossy diagrams, colour coming at you like a kaleidoscope, dazzling array of tables, charts etc etc. No. just simple lines of text - straight, to the point, honest. Has integrity written all over it.
I really hope SLP read these boards to obtain feedback because this is why I'm here. It is not just a great product.
It is people with integrity. So so very rare.
Thank you from this investor!
GLA
You did the research Luna, you rolled your sleeves up and poured over the statements checking, double checking etc etc. You did not get tempted by "unicorns" or momentum - "Moon" stocks or "meme" stocks. I could go on.
I`m presuming you did anyway!
If you didn`t - well fair play anyway!! haha
Macro is not my bag Tt I confess I need to keep an eye on the dollar index.
I do agree on the BoE - AB should have gone a long time ago. He was ****e at the FCA and like the Military, don`t sack incompetents, promote them, how many times have we seen that...
Anyway, well done to JP and the Team.
Onwards and upwards!
GLA
Love SLP! 8p - they just keep delivering. No bull. No froth.
And Rh up 3.6% since 2/9 so fingers crossed it is holding steady.
The killer is the dollar but that is beyond anyone`s control.
Another stunning performance in the context of companies mere survival being headline news - just look at CINE. Feel sorry for their LTHs; they will be wiped out.
GLA
Show me ANY CW cash flow statement from any year which has Cash from Operations of $1.5 BN less Cash from/to Investing less Cash from/to Financing to arrive at net $1 Billion.
But to be fair even if you could, frankly it is not relevant.
Those days - to the extent they even existed - are over.
HNS - you are confusing the legal entity for the business; they are two separate things.
I have no doubt the business will survive - the CW brand, logos, IP, pipe, employees TUPE`d over to new co; etc etc..
But the entity itself, company number "012345678" holding all of the other entities underneath.
That, my friend, is (or more correctly, will be) dust.
IIRC, in the same filing ,the estimated liabilities were up to $50 Billion.
= MASSIVE NEGATIVE EQUITY
= THIS LEGAL ENTITY IS WORTHLESS
NB the legal entity, not the business (IP, logo, TMs, pipe, etc) That has huge potential which is why bankers who are massively underwater, are throwing even more money at this business - BUT NOT THIS LEGAL ENTITY.
Phoenix or quasi-phoenix is what is coming....
Oh God, you still don`t get it. Limited liability as an equity investor means the creditors cannot come after you for their losses. The most you are exposed to is your capital invested. You can walk away and they cannot sue you.
This company - if put up for sale in UK might sell for a peppercorn - £1. Why? There has to be "consideration" (no matter how small) for legal reasons, and it has negative equity. The buyer is not purchasing anything other than massive debt.
Please - do not sink any more of your hard earned into this entity. It is worthless.
You will lose even more.
The creditors will take control and take precedence over anyone else until they are paid off in full either in this entity or a SPV or some other vehicle.
Walk away, be thankful you cannot be sued, and you can thank me in 6 months time for saving you some dosh.
Ironic that even their own lawyers, McCarthy Tetrault LLP, are one of the largest 30 creditors: see
file:///C:/Users/pqui/Downloads/c379c8e5-1d18-4244-b0a5-a22c4bbd2a0b.pdf
page 11 of 27 item creditor no 18. (This relates to the recent Cineplex Case they are unpaid are creditors - $1.66 m)
Knowing that fact, why any lawyer would take on their appeal case is beyond my understanding.
I see the Banks/Lenders taking control. Were the insolvent company VW (with an airfield full of new parked cars awaiting sale i.e. real, valuable, assets) then the Lenders would force winding-up, take control and liquidate the assets.
But CW don`t have cars or even properties, they have carpets, and popcorn machines, and screens on a wall, and lots of nice seats, and posters on walls that would all have to be removed by contractors and sold for diddly. That is not an option.
So the Lenders, who always have first dibs, will pay off Mucky`s trade creditors at (say) 25 cents in the dollar - take it or leave it - so the likes of Disney, Sony, and other trade creditors, although big names, are holding no cards here. The Lenders are stumping up the $1.94 billion and unless any of those are contributing, it is that or nothing.
When they are paid off and the bondholders if applicable, it is New Co up and running and what CW does have is a great brand. It will be BAU with the Banks taking all or the lion`s share of the future profits until the $1.94Bn is paid off (with interest).
Whether it is taken private or remains public who knows but regretfully Old Co -CW as we know it now will cease to exist (and the equity in it).
GLA and I`m off to await a Q4 spike in AET following completion of two recent deals. Those who wish to join on that journey are welcome and you likely will make some if not all of your money back and if you dont believe me look back in 6 months!
Adios.
Yeah, you are right.
CW used QCs in UK litigation so I made an assumption they would do the same in a much bigger case, but seems they did not?! (Maybe they should have done but none were available!)
Thanks for input - makes sense and as you say - watch this space!
You may well be right, but note that you are taking a position that even Cine`s own QC did not argue before the Court.
My own view is the appeal will not be heard.
CP will settle as part of a "plan". It makes little commercial sense for them to incur yet more hefty legal fees in these circumstances going after a man of straw. So I think that race has run.
But where it fits in with the other creditors, only He upstairs knows!
Even if they get a "result" and have the damages reduced by half, that is still $495m that, it appears, they do not have.
If US/Regal is their most productive market, and they are granted Ch. 11 today, then how is it possible for them - in terms of the UK - to not seek a CVA? They must do surely?
No. As a former corporate lawyer I would be on the phone to my CEO and advising that he/she drop everything and issue a statement - even if just a holding statement - denying in no uncertain terms the published article(s).
That is standard. Absolutely 100%. Standard
That it did not happen, tells everybody the truth. Crystal ball not required.
No rebuttal RNS ought to tell people what , in their heart of hearts they know (or ought to, if they have a modicum of intelligence, ... that the statement tweeted at 13.13 is not untrue.
That it rose right at the end beggars belief.
Roll with the punches, tomorrow`s another day.
" If you watch L2 the bid is being dropped on tiny sells. Signs there isn't a clear runway"
-Any chance we could have that in layman`s language ?! :)
I get Level 2 but what it does (or what it is for I don`t subscribe to it) but know it is used for day or short term trading/speculating only from what I`ve read.
Nothing as I can see on their website at IR.
Until this deal complete, this SP isn`t going anywhere. When it does, God knows what next.
*2021 not 2019
The 2019 Trocadero litigation yields some key info:
daily take £21,269 over a 419 day period from March 2018 to May 2019.
Monthly that is £647,534
We identified a working capital shortfall of £87.5m per month from last A/R
87.5m/647k = 135 cinemas at least equal to the Trocadero to meet that threshold without incurring more debt.
CW have reportedly 751 screens in 10 countries not all of course anywhere near the Trocadero level I presume but with those numbers surely enough to cover their short-term liabilities?
Perhaps, the M&A fever caused all of this to unravel? I loathe acquisitions really do nothing but trouble for equity and makes bankers and directors rich but just my (limited) direct experience.
source: https://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWHC/Ch/2021/3103.html&query=(Cineworld)
GLA