RE: What is RWN?18 May 2021 23:20
manically was searching about this rating withdrawal since last couple of hours...it appears like Fitch cannot accurately come up with the rating due to so many variables in play with respect to CINE. CINE's situation can be better or worse off depending on -
1) cinema attendance levels
2) movies performance
3) virus situation
They said that CINE has $350M cash at the end of 2020 and with bond issuance they have secured another $200M and they also get US tax refunds worth of $190M so all this liquidity can keep CINE running even if cinemas are closed for 2021! But now that cinemas are opening up CINE is in a much much better situation.
Fitch have posted a best case scenario where if the cinema attendance levels is back to pre-pandemic levels and if there is a demand like in China cinemas then CINE can easily reduce the debt! We have seen from the news about the mad rush from the people to visit retail shops, indoor dining so there will be massive demand for cinemas too like in China!
Fitch also said that CINE's situation depends on the agreements with studios. We knew that CINE made agreements with WB, Universal and Disney!
So to conclude, I think we should be happy that Fitch have not downgraded the rating to CCC- or CC!
They mentioned about commercial reasons, which I thought could be a takeover but really Fitch will not be the first one to know about takeover. We still have our big brother Jhango watching CINE and they could throw an offer. We just need leak of such news!
All in all, CINE is in a much better situation now. With studios agreements and cinemas re-opening and a huge list of movies lined up, anything under £1 is cheap. Remember we have a director purchase in April at 98p for £14k! We have broker upgrades too. Current price is a bargain.
Tomorrow if there is a RNS about re-opening then I have a feeling that we will rise like a phoenix from the ashes!
GLA