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I also want to trade it a bit but need to sell first and for that we need some news here. We've had 5-6 bad rns's since August 2022, the next one's likely to be positive.
Bushy, Warren Buffet once said: "You should do something you understand yourself. If you don’t understand it yourself you’re gonna be affected by the next person you talk to."
I don't understand the fundamentals that caused today's drop, only fear on old news. I haven't learned anything new from the rns this morning either, so for me it's still a hold.
they've forgot to include a "no recovery" message today... probably saving this line to cure the SP increase.
Freedom, could you be so kind to enlighten us on your source or is it inside information? The last thing I've heard is that the company remains positive about the extension. I find it interesting that on the day when the SP got slashed by 15% out of the blue, every muppet and his dog had sold it the day before and if there's a permit rns tomorrow I bet they tell you they've all re-bought in the 70s. You trading geniuses and I'm the only one here who's got my profit erased...
@Mr.kioto Yes, some ideas I posted yesterday but not without help from the Board and their lawyers and they don't give two hoots as the former may have a backdoor agreement and the latter are paid by the lenders.
"Not just profit falling from $148m to $24m (which is a 83.7% drop), or cash down from $386m to $143m (a 70% drop). It's the debt. From $86m net cash to $175m net debt."
It's old news, even the lower production guidance for 2023 was announced in January. Having said that, with lower production the Q1 results should be better due to much higher PM prices and improved social situation. Today's SP has more to do with Inmaculada uncertainty, imv. The govt. is not in a hurry to renew the permits as they are under pressure from some groups that want the mine closed.
oh yeah, I'm sure he's going to like it, especially the "no golden parachutes" for the current BoD part. If there's a backdoor agreement than he's well minted and doesn't need any shareholders. We need to hear from Wolf whether or not his employers are interested in a sale of RoW. It's a cool story that creditors are losing billions but in fact may want to keep everything for themselves.
I've put 4 points up for a vote, the rationale behind it is quite simple.
1) Yes - agreed valuation / No - renegotiate
2) Yes – agree with stake asked by the highest bidder, i.e. 40% for 200m (dilutes the current shareholders by X amount of new shares post rights issue in exchange for cash offer. This dilution of course comes separate to a preceding equity raise). Simple example: 1,3bn shares currently in issue and 1,3bn 1:1 equity raise makes up a total of 2,6bn shares and then highest bidder gets his 40% stake. A total of 3,64bn shares with an estimated valuation of maybe 500m which translates into 13.7p per share. /
No – renegotiate the stake, i.e. if you think that the highest bid is only good for, say, 30%.
3) Yes – new board will be elected to take us forward, the current board resigns without compensation /
No – proposal rejected (most likely the bidder also walks away because they would want to run the company)
4) Yes – presented for judge’s approval / No – the lenders plan gets implemented instead (no recovery)
PART 2:
In light of the shareholder plan, it is proposed to hold a new marketing process with a clear path of split ownership. Given the above, it is expected that more bids may follow from interested parties or those not previously involved. Also, the stock price is expected to increase significantly if a complete wipe-out announced by the Group on 11 April would be substituted by the shareholder plan. This would allow performing an equity raise at a discount to ensure good subscription and liquidity on the market.
Due to the current debt situation, the shareholder plan does not account for any compensation to the current BoD which is to be replaced by the new Board nominated by one of the interested parties (the highest bidder) and voted in by the shareholders (subject to shareholder approval).
The shareholders are asked to vote on the details of the plan.
1) The value level requested by the group lenders reflects the current value of the RoW business.
2) The best proposal for the RoW Business corresponds to a fair share in the PLC offered to the investor/highest bidder post equity raise.
3) Elect new candidates to the Board, nominated by the highest bidder
4) Implement the shareholder plan concerning the RoW Business
DISCLAIMER: reflects only my opinion and views and has not been submitted anywhere so far. I ask all LTHs to sharpen it up.
PART1:
On 18.04.2023 Cineworld PLC announced that together with its key stakeholders the Group has decided to terminate the marketing process for its ‘Rest of the World’ business (outside of the United States, the United Kingdom and Ireland), the “RoW Business” because the proposals did not meet the value level required by the Group’s lenders. As previously announced, the Group informed its shareholders that it continues to move forward with the proposed restructuring which does not provide any recovery for holders of Cineworld’s existing equity interests.
Here, an alternative plan concerning the RoW business, later referred to as “the shareholder plan” (subject to shareholder approval), is proposed. If implemented, the shareholder plan is expected to satisfy the minimum value level required by the Group’s lenders and other involved parties who have contributed to the DIP funding for the RoW business and importantly, it is expected to keep the business operational, maintain the public limited company status, and potentially, provide some recovery to the current equity holders.
The above could be achieved by using an opportunity to raise funds on the market in cooperation with the highest bidder from third parties which expressed interest in the RoW Business. Since the value level requested by the Group’s lenders has not been released, thus far, one can only use an estimated valuation in the shareholder plan which is rumoured to be in the range of couple of hundred millions and may or may not exceed the DIP funding which was in excess of 250 million (associated with the RoW business). Therefore, providing that the highest offer which has not met the value level of the Group’s lenders came anywhere close to the DIP funding associated with the RoW business, it is highly likely that the remaining amount (even of significant portion with respect to the best proposal) could be raised on the market via the rights issue for a split stake ownership of the RoW Business.
The shareholder plan benefits the existing lenders as follows:
It aims to achieve a fair value compensation for the Group’s lenders for the RoW Business which would exceed the highest proposal received so far by the amount of raised equity. Also, it is safe to assume that a proposed compensation would exceed “the hammer price” paid in the event of Ch.7 bankruptcy.
The shareholder plan benefits a key investor or a group of investors (the highest “RoW” bidder) as follows:
? By retaining the Public Limited Company (PLC) status of Cineworld
? By nominating its own team / executive candidates to the Board of Directors (the “BoD”)
? Listing on the London Stock Exchange and ability to raise funds from the market
? There would be no need for an immediate rebranding of the “RoW” cinemas, and thus, cutting instant expenses for a key investor.
could draft the alternative plan concerning RoW, business in Europe, saving the PLC and paying out to the ad hoc lenders. We may start drafting it here and all contribute. One bullet point which comes to mind is to ask the court to reveal the highest bid for RoW and similar to the lender's plan put some range how much will have to be raised. Also, our contribution as current shareholders could be to ask the judge to approve some discount as we are the current owners. This could mean that the lenders may be forced to accept 450 instead of 500.
Wolf, if we buy RoW it becomes debt free. Your lenders won't pin additional debt on us, no chance!
I have a plan for shareholders. In short, RoW is valued at around 500m and that's what lenders would accept, maybe less but let's say 500.
Most likely, the highest bidder would be happy to get it for 300m and maybe they simply don't have more to spend. We offer them to save 100m but instead of getting 100% stake they keep the PLC and form the BoD. (200m from an investor for ~40% stake)
40% equivalent stake is raised from PIs - all together we should be able to raise 200m. The remaining 20% (100m) can come from IIs or other investors. Just because the ad hoc lenders want their money back doesn't mean that the shareholders have to be wiped out!
@maidit, if we knew the highest bidder for RoW , could offer them to team up (raise equity from the current holders on the market to meet the minimum amount) and buy RoW completely debt free and with the new BoD in charge.
what does it have to do with your mortgage? If you live in your property it's a liability not an asset. Cinemas are on rent making dough with a good film slate. It would be analogous to you having 300k on your mortgage left and your tenant is usually paying you 100k per year but you've lost that tenant due to covid. Then your lenders come and say we take your property and boot you out because your balance is running low.
Wolf, are you paid by the creditors to try and convince everyone that Cineworld directors have done what they should have and everything's in that plan is fair and square? With a bit of luck they won't get their filthy hands on our business.
@delito, in a way... if the SP goes to zero - no shareholders, no equity, no problem to push through any plan. Say, if the SP is 10p they could try to suspend trading but than the mcap was 100m at the time, it may not be so simple... and not w/o consequences.
@roxy2020, the lenders want to put a lid on cine fast because their plan is under threat.
if my theory is right the lawyers are quickly drafting a new rns which will say that the lenders have decided to delist CINE as soon as their plan is accepted. (It won't)
all letters are important. Of course the above are not formulated in lawyer's language but what I like about those letters is that the shareholders have their say, a counter argument. Every court process should be two sided. Actually, the BoD should be doing this work for all of us, arguing that the company is worth more than current liabilities but in our situation they have surrendered to the lenders. You can speculate if there's a backdoor deal but it seems that the BoD are desperate for CINE equity to become worthless.
would be nice to get some activity back to be able to trade it. I bet if we cross 1p a new RNS will pop up saying that "shareholders get nothing, please stop it" :D the lenders have come up with a brilliant plan to snatch this on the cheap and you're getting in their way.