Member Info for RS2002

Litigation will see this dragged out for YEARS.

By which time a global recovery will be with us and I suspect, a new deal with Cineworld and Cineplex will be made which will see Cineworld taking the mantle as the LARGEST cinema group in the world from AMC.

Equally, Cineworld may elect to pay £28.3m termination fee to Cineplex. A paltry sum in comparison to the $2.3bn they wanted when their share price and value dropped 75% since that offer.

Also to remind all, Cineplex breached their debt covenants which caused the take over to collapse as Cineworld were within their legal rights to terminate the purchase.

This goes beyond Tenet.

We had the eyebrow raising wording prior.

Warner Bros chairman stated that Tenet is no longer being treated like a “traditional global day-and-date release”, which suggests they are prepared to release it in other territories before the US.

If this goes ahead it will OPEN the flood gate for other studios to do the same.

This isn’t about Europe anymore.

It’s about Asia as well. China, India, Korea, Japan and Australasian territories too.

They are ripe for Hollywood releases as they play their domestic titles to big number crowds.

The demand is there.

1. 82% of U.K. cinema patrons are under the age of 45. They as others have said will OCCUPY cinemas in large numbers with a less risk averse approach as we have witness across other industries and habits by media coverage and our own experience.

2. Cash burn and 70% variable costs mean Cineworld are doing the right thing with their phases approach. They are turning on the lights in the U.K., but room by room. They will assess if demand is there and then either remain open or go into hibernation. Given they have funds to last them until July 2021 whilst they generate income from UNLIMITED membership and apply pressure on studios like Warner Bros who are looking to facilitate Europe and Asia with releases ahead of domestic US, means we are in a lucrative position over Cineworld’s peers Cineplex and AMC whose cash position is less favourable.

Once the loans mature in 2023, they need to look at their financial position.

Do you have a crystal ball?

Do you believe we will be ravaged by Coronavirus in 2023? That global economies won’t have recovered in that time?

I certainly don’t.

I believe global recovery to be with us be Q4 2020, THREE years ahead of 2023 when the maturity of Cineworld’s loans come up.

For those who are more pessimistic who would say Q1/Q2 2021, that is still TWO years plus before said maturity of loans.

Cineworld:

1. Don’t need more loans or a cash injection
2. Don’t need to do a rights issue to dilute shareholders shares
3. Have negotiated lease cuts and in some instances like Poland when they were shut DIDN’T pay a penny in rent.
4. Have European cinemas that play domestic movies not linked to Hollywood/American; this means they have UNLIMITED membership paid and domestic box office sales that don’t care one iota about Hollywood titles.
5. Have variable costs to the tune of 70% and a flexible manpower model, read: zero contract hours with temporary staff. Not popular, I know, but from a spend perspective is great for shareholders.

Ian Harding posted a good comment earlier.

Do you believe Hollywood, a MULTI BILLION dollar industry would like exhibitioners like AMC and CINEWORLD the first and second largest cinema chains in the world fail?

They would be killing their golden goose.

Economies rely through an intricate supply chain and distribution network touching on millions of jobs and upstream and downstream revenue to allow cinema to fail.

Given the news that will spread concerning Tenet playing internationally as well, I want to be in for the RIDE UP.

Do you?

This is precisely why Cineworld are taking a phased approach. They are opening England cinemas first and will assess the footfall and demand.

Least we not forget; Cineworld will be SWITCHING ON UNLIMITED card membership for England customers and receiving a nice PASSIVE INCOME, too.

Couple this with sufficient liquidity and variable costs of up to 70% means they have a STRONG business model to reduce costs and maximise profits.

So Investroid believes defending the board from malicious and false statements alluding to imminent bankruptcy, inflated debt levels and other slanderous claims with fundamentals accompanied with sources is ramping?

Wrong.

The board needs a dose of reality when fear is used to drive down a share price and informed investors should receive a suitable response from those who are invested for the long term.

I will observe the market next week with trust in the BoD to update investors on their progress to reopen with Unhinged and classic movies as well as the rest of the lineup.

Hi Put, yes the drop was 7p and very oversold, given there are still movies for 2020 lined-up and clear statements that they outright refuse to VoD big blockbuster titles. Cineworld demans paitence and rewards will come in time.

Enjoy the weekend and remember, Monday is another day.

Will be good to see BoD buy in some more shares.

Well done and expect a nice return in due course.

The fundamentals still stand true - this just needs some CONTINUED positive news on the US.

We have heard from the Department of Health and Human, USA who have quoted that they see a decline in cases and mortality to continue in the next few weeks.

As soon as America reports better numbers, the studios will look at their diaries and start looking for bringing dates forward.

For now let us look forward to Cineworld UK opening and bringing in some cash via UNLIMITED membership.

Good luck, all.

Rocky week but things will get better next week

Cineworld net debt = $3.5bn

The $8bn refers to lease commitments which have been renegotiated.

The shorters are out in force to drive the share price.

Those selling right now will simply crystalise a loss when it can recovery very easily next week AHEAD of UK England re-opening.

It's been covered several times.

Cineworld costs are 70% variable and the BoD have negotiated very well to drive costs down.

Couple this with Furlough and US government stimulas deals which NATO have backed, means Cineworld is in a great position for recovery.

Unfortunately a good measure of irrelevant anecdotal information on personal preferences to VoD and Cinema that somehow consitutes the majority, doesn't translate to industry standards.

Cinema is about an experience and is an essential LIFEBLOOD of Hollywood and studios.

Remember, Trolls 2 - $90m to make reporting a loss because it was streamed.

Cinema has survived:

- Spanish Flu
- 2 x World Wars
- Recessions

Means it can survive the US getting their numbers down because that is what it is right?

The US getting their numbers down. Speaking of which, once more for good measure :)

The Department of Health and Human Services said the rate of deaths from the coronavirus in the United States should begin to fall in the “next couple of weeks.”

The seven-day rolling average of coronavirus infections is beginning to DROP, and U.S. health officials predict hospitalizations will go down next week and mortality rates will follow in about two weeks, Adm. Brett Giroir, an assistant secretary for health at HHS, said.

Source: https://www.cnbc.com/2020/07/23/hhs-predicts-us-coronavirus-death-rate-will-begin-to-fall-in-next-couple-of-weeks.html

See comment posted 1359:

Chance of B-rated bonds defaulting = 4-10%

Do you want to invest in a company who stand a 90-96% chance of sustainability and seeing their debt bonds mature and repaid to the 4-10% chance it won’t?

Easy question.

As for the $2.1Billion being touted it's been covered several times and one more for good measure :)

The best thing that happen was Cineplex breaching their debt covenants.

It ended up saving Cineworld $2.3 BILLION DOLLARS.

From their contract:
"Should the Acquisition Agreement be terminated under certain circumstances. The Major Shareholder has also agreed to pay an additional breakfee of up to £28.3million"

To buy Cineplex at 4 x the premium when their valued reduced to just a quarter - would have been financial suicide.

Agree. All investors know that the US is holding back a lot of industries from reflecting their value.

The UK is going great containing the virus and we now have regular flu deaths 3 times higher than Covid ones such is the great work the UK and Europe has done to contain the spread.

We have seen in the news that the Department of Health and Human Services said the rate of deaths from the coronavirus in the United States should begin to fall in the “next couple of weeks.”

The seven-day rolling average of coronavirus infections is beginning to DROP, and U.S. health officials predict hospitalizations will go down next week and mortality rates will follow in about two weeks, Adm. Brett Giroir, an assistant secretary for health at HHS, said.

The same with Arizona who reported 21,700 total new infections from July 11 to 17, a 13.2 percent decrease from the 25,000 total new cases reported from July 4 to 10, according to data compiled by Johns Hopkins University.

The numbers are going to continue reducing and we should hear some POSITIVE NEWS on Monday to re-iterate such and see this share recover.

Source: https://www.cnbc.com/2020/07/23/hhs-predicts-us-coronavirus-death-rate-will-begin-to-fall-in-next-couple-of-weeks.html

Have you not been watching the news?

Borris has made his position clear.

There will be NO more NATIONAL Lockdowns.

It will be regional.

When Leicester spiked, did the entire country close down? No it did NOT.

Plenty of funds to keep CIneworld going into H2 2021 if the burn-rate is anything to go by and we can expect plenty of future investment in global cinema.

I don't see Mulan and a few titles being delayed collapsing an entire industry.

If you believe this, you're more niave than I thought.

Shorters can talk amonst themselves but it doesn't mean I cannot provide a dose of reality:

BB-rated bonds default at about 2% per year, on average, and B-rated bonds at about 4% per year. Rates can temporarily be much higher: even 8% to 10% per year at times for B-rated debt. Remember, default does not mean total loss though; about 40% of defaulted debt is eventually recovered. So reckon about a 1.2% annual long-term loss rate for BB-rated, and about 2.5% annual for B-rated.

The reality is virtually every industry has had their rating hit, because of the epidemic.

What we know is Cineworld have, if we follow Fitch, a default likelihood of 4% on average and in extreme circumstances without intervention, 8-10%.

Ask yourself an important question before you invest:

Do you want to invest in a company who stand a 90-96% chance of sustainability and seeing their debt bonds mature and repaid to the 4-10% chance it won’t.

Fitch state that Cineworld's scale and cash-generative business model are supportive of a rapid recovery if cinema attendance levels return to normal.

With so much upside and an improved cash position that means no rights issue is required/dilution and an opening in the U.K. and US planned, bringing in Unlimited cars membership, do you see Cineworld remaining at 53-59p or north of 100p?

Remember what we have seen many times and most recently:

22 May 2020 = 58p
26 May 2020 = 69p
27 May 2020 = 77p
28 May 2020 = 102p intra-day high

Could we see the same next week just before it OPENS in the UK on Friday 31/07?

You could do that deamachine or you consider that the only reason new releases are delayed is because of the US market.

What is holding the US market? Their coronavirus cases of course.

So the new we receive today from the Department of Health in the US (not a journalist):

The seven-day rolling average of coronavirus infections is beginning to drop, and U.S. health officials predict hospitalizations will go down next week and mortality rates will follow in about two weeks, Adm. Brett Giroir, an assistant secretary for health at HHS, said.

As soona s the new comes next week that US numbers are continuing to decline this will rally

Do you want to BUY in at this price or 50p+?

Fitch are estimating the burn-rate as as $35-40m/month, this is an estimate, but provide some clarity stating the short-term liquidity crisis is averted. Cineworld increased its liquidity through an additional USD250 million of senior secured debt and increasing its RCF by USD110 million to USD573 million. It has also arranged with its RCF lenders for a waiver of its leverage covenants for June 2020 and an increase in its net debt-to-EBITDA covenant to 9.0x for the December testing date. The increase in liquidity modestly eases Cineworld's financial risks and provides an additional nine-to-10 month cash-burn capacity based on Fitch's estimates. This adds to the five-to-six months of liquidity that Cineworld retained when cinemas closed in mid- to late-March.

10 months + 6 months = 16 months from March so that is enough cash to keep Cineworld going to July 2021 if they had to keep closed. Not that they need this - as they have opened up their European and soon UK cinemas.

So plenty of funds to keep going and in conjunction with the staggered opening which is bringing in money.

A great buy at this price

Come Monday you know it wil be BLUE and 50p+ as the Cineworld Booking system is LIVE and taking MONEY.
Then we'll watch the USA report a reduction in cases and the confidence will return.

How many times can I say:

- Cinemas in all territories open except US
- UNLIMITED membership coming in
- Concession sales