This is my interpretation too, Bullsbears. It was used as finance to support the business during the period of Covid lockdowns.
Also what of this security package? Is that a directors guarantee of some sort?
Let us be honest, this entire affair is convoluted. This was openly stated in the FT article when they reported the discrepancy over the holdings in Netherlands and then moved to the British subsidiary.
RNS Sep 2020:
As part of this refinancing, Sand Grove Capital Management LLP ("Sand Grove") will refinance the secured corporate loan facility previously provided to GCT by Barclays Bank PLC and HSBC Bank PLC, and GCT has agreed to provide a security package to Sand Grove which includes a charge over its holding of Cineworld shares. This grant of security will constitute a technical dealing by GCT and will be notified in accordance with the DTRs in due course.
This suggests it was used to refinance the earlier loan provided by Barclays and HSBC and was used for the running of the Cineworld business.
Monkey over on discord has posted this but the questions remain.
As part of this refinancing, Sand Grove Capital Management LLP ("Sand Grove") will refinance the secured corporate loan facility previously provided to GCT by Barclays Bank PLC and HSBC Bank PLC, and GCT has agreed to provide a security package to Sand Grove which includes a charge over its holding of Cineworld shares.
1. This was a corporate loan. It was not to be used for personal expenditure. Are you suggesting this money was used for non-corporate means?
2. A security package was factored and entailed what protection for Sandgrove in the event of default or loss of equity?
Are the assets worth more? I believe so. I think we should see the SP double once the process is kicked off and trading resumes.
I would agree with that Roxy but boiler rooms do frequent this chat and employ their buy/sell raid from time to time, hoping to change the narrative.
Antlev take your ADHD meds and pipe down. There are LTH investors here who were invested based on the fundamentals. Whilst your condition sees you lack empathy for others, you should be reminded that not everyone is a swing trader.
Wolf, I am sure they will be fine financially. The reality is we will all be fine financially irrespective of the outcome.
What I find disappointing over the potential money lost is that Mooky has destroyed his familys legacy and reputation. In doing so this carries significant shame which I believe will haunt Mooky and his family far more than the loss of money to them.
The pandemic was not their fault but they should have had better indviduals appointed in Operations to mitigate against losses with interruption insurance, ensuring that the Arrangement Agreement had a break-clause within it. Hindsight yes but there have been a lot of individuals that Cineworld shareholders put trust in to do their jobs correctly.
It will entirely depend on the circumstances.
If the BoD believe they can transfer out RoW and raise new shares for this and leave existing shareholders of Cine Plc high and dry, whilst Mooky and the BoD appoint themselves shares, they could well face a class action suit and I would imagine there would be firms lining up to represent the interests of many.
Thinice, this is a discussion forum about all possbilities, the only person who needs to get a grip is you.
Sorry to read you and other LTHs are nursing such large losses.
Whilst Cineworld has issued legal forward statements stating there will be no equity interest in the event of sale or D4E, I believe most LTHs will stay put. They have seen their investments so beaten, nursing paper losses they will be reluctant to crystallise them when the forward statements are not a certainty and many will want to see what the outcome of the D4E translates to. A higher market cap than £40m which is where it sits at the moment? Equity and shares in CineworldStrong/NewCorp or do they need to consider class action with a recovery firm for being mistreated by the BoD?
I have accumulated a large number of shares so I now join yourselves in this journey.
You should be thanked for your loyalty and willingness to support a company that supports almost 50,000 jobs and provided a great out of the home viewing experience for millions around the world.
Emotions aside, good luck and I hope it works out for us all.
@wolf the sale process was non-binding offers and then a review within a timescale to then accept a binding offer.
The offers were not disclosed but well short from the wording of the RNS.
The RNS made it clear if the U.K. and US operations were sold, there would be a loss for creditors taking a haircut and of course no remaining equity for shareholders of the PLC for THOSE ASSETS (read: U.K., US).
Whilst the shares are held in Plc and will still have value of the RoW business now debt free, you also need to appreciate that Cineworld cleared the debt of RoW and will move the equity in that division into a new company.
You keep referring to a sale which COULD include RoW but I fail to see this.
Why would Cineworld look to sell it off when it is outside chapter 11? It is not a fire sale or distress sell to raise capital because they received DIP financing which allowed them to stem the immediate cash flow issue and in doing so, put the U.K. and US assets as collateral.
You keep saying the creditors will want more but they are confined to what is in scope for them and the judge will not allow them to extend beyond their reach. What next? Will they ask Mooky to surrender cash from his personal account? Will they hold him responsible akin to a directors guarantor?
Finally, beyond the low ball offers received so far, how much is the U.K. and US operations valued at? When Regal cost $4bn in 2018 is it difficult to comprehend that with future projections, the US and U.K. could be valued at $6bn or less?
Of the creditors want to settle their loans which don’t have a maturity until later, they will need to accept pennies on the pound.
Tegop, we are saying the same thing. RoW will be looked at from a restructure perspective post ch11 so shareholders should not give up hope just get.
Who cares if he returns. He will just using another alias or like sharabel will switch from hopium to FUD depending on their current position. These are just swing traders and in essence, noise.
Wolf, your post is widely speculative.
Leave the emotions to the side and look at what is in scope and what is outside of scope for chapter 11 reorginsation.
RoW can be sold, yes but we have moved on from a potential sale. The idea parties were going to come with $6bn cash in hand was unrealistic from get go. This was a formality that Cineworld wanted to demonstrate them being proactive and offering an alternative option.
Debt for equity is happening and as others have posted as well, this will be handled outside of the chapter 11 episode and as such, creditors can be as hungry as they like, they are faced with RoW being set about in a separate entity outside of their jurisdiction to cease it.
I do not see Mooky and the BoD surrendering it unless a sale is progressed and that would require a big offer which would ultimately benefit all stakeholders including retail and private investors with exposure to convertible bonds.
Sales from non-binding came in well short.
Read the CH11 restructure proposal.
A new Corp will be setup and RoW moved across.
It is going to happen, Wolf.
Creditors will have to accept that the judge and process is only looking at U.K. and US operations as detailed in the official comms.
https://cases.ra.kroll.com/cineworld/Home-DownloadPDF?id1=MjI3NzEyMw%3D%3D&id2=0
Chapter 11 restructuring process involves entities that are engaged in Cineworld’s US, UK and Jersey businesses; businesses in all other territories remain unaffected
We keep posting this.
If the sale was going through I would agree with you that RoW is fair game but the sale offers aren’t coming in…
Peadro, pay attention.
RoW was acquired and valued at £503m when Cineworld took it over in 2014.
https://www.scotsman.com/business/cineworld-ps503m-deal-polish-cinema-chain-1548332
What is the current market cap (£40m) and what is the market cap of RoW debt free? 12x higher than the current market cap if existing shareholders get equity in the newcorp.
It all looks to be dumping US Regal and reverting back to UK and RoW operations. Granted Regal was bought for $4bn (cash and options), I would like to see creditors take a haircut and recuperate their losses with the Regal operations and in doing so write off the debt Cineworld plc have.
The way I see this, if Cineworld plc screw over investors (retail and institutional), they will have no trust left just starting up a new company and leaving the earlier equity holders high and dry.
The plan is everything so we need to see it and what the feedback is.
Antlev, where do you get these nuggets from? Christmas crackers from the 1980s?!
You have to be on the spectrum seriously.
@Tegop agree, this is what the restructuring plan will outline.
Cineworld had to issue an RNS to advise the position on the equity interests on the operations/assets in scope for Chapter 11 which are US and UK in the event of sale or D4E.
What Cine did NOT report on was the value of the residual shares and what the position will be when CineworldStrong/CineNewCorp is established and what equity value will exist there and importantly, if current shareholders of Cineworld Plc will be afforded shares in the CineNewCorp https://www.cineworldstrong.com/
It will be a joint decision. What will be unnaceptable is Mooky getting shares in the new company and other investors (convertible bonds issued to private investors and retail investors) being left high and dry. That will see an allmight legal challenge so the restructuring group need to be mindful.
Let us see what the restrucutring plan will be.
The RoW is still owned by the existing Plc and we are thankful for that. Cineworld made it clear, RoW will not be subject to chapter 11 restructure. It was there for sale as part of the entire group but with no attractive bidders, it is looking likely that Cineworld will go down the D4E route and in doing so US and U.K. operations will see their assets/operations moved over to creditors.
This would then leave the RoW to form part or the newcorp and is where we have our interest in knowing if CineStrong or new Corp will recognise shareholders in the old Plc and allocate them shares in the newcorp.
Let us see the plan and many will be prepared to fight legal action if this does not happen. You cannot just up and move assets and expect shareholders to rollover and accept that without legal action.