The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
Management Incentive Plan / Emergence Awards
==========================================
Up to 7.5% of the value of New Common Stock as of the Plan Effective Date on a fully diluted basis shall be issuable in connection with a management incentive plan, the terms and conditions (including any and all awards granted thereunder) of which shall be determined by the New Board (including, without limitation, with respect to the participants, allocation, timing, and the form and structure of the options, warrants, and/or equity compensation) (the “MIP”). The New Common Stock issuable in connection with the MIP may be allocated prior to the Plan Effective Date as emergence grants to recruit individuals selected to serve in key senior management positions after the Plan Effective Date, subject to the terms and conditions (including, but not limited to, with respect to form, allocated percentage of the MIP pool, structure, and vesting) determined by the Required Consenting Creditors and the Required Equity Capital Raising Parties (the “Emergence Awards”).
Agree, Bonkers - Mooky has let existing shareholders down and it would appear his message celebrating the outcome of this restructure is more about him wanting to cling on and get that 7.5% which, over time and without the debt overhead will likely exceed the value of his original 20% which was under a large debt burden.
I am continuing to hold a smaller allocation and keeping power-dry in the event this restructuring plan is not passed or there is some emerging news that send this up.
It refers to the restructuring of operations within Chapter 11 - UK and US.
The proposed plan factors no equity recovery for existing shareholders.
The reason the SP is not 0p is:
a) The plan has not yet been executed
b) The plan does not refer to the RoW which is seperate to Chapter 11 and will require a seperate restructring plan. For now, it is going through a bidding process with binding offers to come
Patience, your reasoning is not off.
It is a confusing period and we need more clarity but I am drawing my conclusions from the fact as Tegop has stated, that Cineworld have stated the restructure of RoW will be done outside of this Chapter 11 re-org (concerning US and UK).
We need more information from Cineworld on this and with that means the share price will remain volatile.
The RNS stated any sale would not benefit existing equity holders, so I want to see an increased market cap reflected with a bidder for RoW.
$271m was used from the DIP financing to clear the debt from RoW.
Chapter 11 restructure was on UK and US operations/assets, the proposed plan has been formalised now.
I want to see RoW valued at ~$500m if not more, minus the $271m that was used in the DIP financing to clear its debt and leave the remaining ~$229m to reflect as value for the existing shares in the PLC.
Cineworld also stated that RoW would be handled outside the Chapter 11 re-organisation, many want to know if they will be afforded new shares in the new corp.
All the best, HNS.
Cineworld was a recovery stock and you supported that recovery through the Covid era.
I am going to hold on as I believe there remains a possiblity that if RoW is NOT sold and Mooky retains his legacy, the value will reflect in the PLC stock that we own.
Like you, I will also use any loss to offset tax for future capital gains.
Good luck with the rest of your investments.
RoW was acquired for £503m in 2014. At today's prevailing rate that is $620m.
https://en.globes.co.il/en/article-1000908660
If that is achieved, then it would leave $349m as proceeds after.
Question that remains to be answered, will that be afforded to existing shareholders. If not, why not?
It is very hard to digest that, Tegop.
Breaking this down, we know $271m was used to clear down the debt on RoW.
If that $271 was to be reclaimed on the basis of a valuation for RoW, then it would be north of the current market cap.
Perhaps investors will need to wait until 20th April to ask the question and obtain a clear response at the General Meeting hosted at Cineworld, HQ.
*Is sold or not
It will be good to know, Tegop if RoW is still or not.
All well and good to have interest but if Mooky wants to hold onto his legacy and RoW is that, will this reflect a revised market cap for the existing PLC and shares?
Chapter 11 was about the restructure of debt, the proposed plan has reached that with creditors and had UK and US operations in scope.
RoW, should it NOT be sold, we need a value attached to that and it made more clear what will come of this or does it just transfer across to the new corp and leave the old PLC?
RoW remains and how much will it be valued at? $500m? $1bn?
Good luck, everyone.
Also hope good things come your way for new roles, iParsnip.
So disappointed having held this company for over 2 years and it has delivered nothing.
Zero leadership.
Morning all, will be good if there is a stalking horse bidder for RoW to set a bottom price. When the news of the interest came in, it was claimed an analyst valued RoW at $500m.
You could well be right, Stanley but as I stated it is just a scenario - we all knew that the debt covenant needed to maintain a ratio of net debt to Annualised EBITDA of less than 5.0x to pass which Cineworld was unable to do. They had already received a waiver and it was expected more would come but creditors were relcutant in the face of the absurd synergies award.
It is in Cineplex's interest to settle something, if not they will get considerably less or nothing if shareholders are also wiped out.
Funds Earmarked by Section 363 Purchaser to Pay Creditors Need Not Be Distributed in Accordance With Bankruptcy Code’s Priority Scheme.
https://www.jonesday.com/en/insights/2015/11/funds-earmarked-by-section-363-purchaser-to-pay-creditors-need-not-be-distributed-in-accordance-with-bankruptcy-codes-priority-scheme
Spot on, Tegop.
Many have proposed this but those refuting such a suggestion will then claim others “know nothing”.
The docket uses the term, considering. It is one of several options or scenarios.
One scenario I raised which, Wolf tried to dismiss is where the BoD look at the proposal of selling RoW and obtaining a figure from an interested party which they can then discuss with the CH11 group and understand if it can be used to settle unsecured creditor, Cineplex and in turn allowing the CH11 group to agree a reduced debt for equity swap.
We know the CFO, Nisan Cohen has said the Cineplex arbitration has thwarted creditors affording more flexibility and additional capital to borrow.
I would like to see what offers the bidders make so all parties can gain an insight into what other scenarios could become feasible.
Wolf, your enthusiasm and continued interest for the latest unravellings and leaks of the BoD being replaced is noted.
I am sure this is all bringing you much glee, although the odds were always stacked against investors given the dire situation and the numerous RNS issued warning of the risk of wipeout for existing equity holders. Thus, it has always been my belief that those who claim they have the Midas Touch in investing and warning of Cineworld’s collapse don’t really impress much. It is akin to shooting fish in a barrel.
To answer your questions, I am well aware that Cineplex is an unsecured creditor. The scenario I explained was the CFO advising the market that because of the Cineplex judgement, additional support and creditor flexibility was not going to be afforded. If Cineworld and their advisors were to advise the creditors that an out of court settlement had been proposed and conditionally accepted by both parties, I was foreseeing a scenario where creditors would be appeased to then reduce the amount of debt they would be prepared to swap for equity and allow cineworld to recover their admissions and revenue streams to a better recovery leading into 2024.
As for the PE ratio, it cannot be calculated because the data is incomplete. Projections are still being formulated and leading into 2024, it remains to be seen if a full pre-pandemic 2019 admissions can be recovered.
So prior to the latest leak of the BoD being replaced which has not been officially communicated by the company, a number of scenarios can be imagined.
I also hope you find some time between posting to pick out that dress and fascinator for the GM :-)
Good post, Mountainous.
I do not forsee any RNS or likelihood of suspension before the GM on 20/04.
Good find.
So it looks like Mooky and his brother are going to be compensated and all other shareholders wiped out.
Question is, will this be the decided and final output?