Member Info for StanleyPro

Please correct me if I'm wrong,
UK Cineworld operations: gross profit $20.5m, interest: $30,8m
US Cineworld operations: gross profit $91m, interest: $27,2m
Picturehouse operations: gross profit: $2,1m, interest: $0,46m

Hi Hexam, looks like in February they lost big chunk to interest payments. I thought those should have been sorted out with the DIP funding. Apparently not. I see it as a trick to show that they're losing money and as soon as their plan is approved and that debt pile is written off, the newco would be making a killing. Unfortunately, without the current shareholders on board which is totally unfair.

Maybe one for the AGM.
If the BoD would categorically deny any possibility of exchanging current shares for a stake in a newco. with reference to lenders precedence etc. then why not propose a scheme where the newco pays a one-off compensation to existing holders if the profit exceeds X amount. It could be a good outcome fixed in the contract when cinema industry would be firing on all cylinders.

https://news.bloomberglaw.com/bankruptcy-law/cineworld-lenders-hire-legal-counsel-amid-potential-rights-offer
Month old news but it just struck me that Glenn Agre Bergman folks represented Hertz shareholders during the pandemic. Also, the article was accurate about the plot and $800m raise open only to existing lenders.

maidit, he may not get all 7.5% but with initial allocation and bonuses probably expected to make some recovery. A couple of years down the line they will successfully repay the DIP and initial funding and sell the business for a decent amount.

Before the first August rns dropped the SP was ~23p (mcap 315m). Mooky's 20% stake was worth ~£63m (equiv. 79m$). If the newco. is valued at 2.5bn$ he needs just 3% ownership to make a pre-Ch.11 recovery.

Yes, at risk too but he'll emerge with some share in a multi billion cinema chain which could end up being slightly better than his 20% CINE share was @ 20p.

@patiencebringsit doing better work that those 1,5k per hour blasted lawyers. :D

Thanks, let's see what happens. I also believe there should be space for existing holders. If you read the last rns, it says the group of lenders (not cineworld) have proposed a "Plan", so naturally they would ask for 100%.

Hexam, I disagree and refer you to those numerous dockets. Cineworld themselves value total assets at over 10bn$. You and I may think it's overpriced but such argument is irrelevant in negotiations of what % the creditors are entitled to.

Kevin, the BoD is responsible for beating the company into the ground. Past loans have been secured against company's assets and at some point when Cineworld could not pay the interest, rent etc. they were forced to file in for bankruptcy protection. Senior creditors provided the DIP funding to keep the company afloat while their lawyers recover as much money for them as possible with a so-called "Plan". According to that Plan we don't get to vote on anything because they're telling us that lenders are owed 100%. Cineworld hasn't released a monthly operating report (docket) since January. The question is why? If the business is on fast track to recovery they don't want you to know this because they may get significantly less. Think about the intangible assets, renegotiated agreements, much more efficient business model so we have every right to question why is it not administration? Is the business worth a lot more together with its intangible assets than just cinema equipment? Then where's our part of the newco.?

Wolf, lenders want everything but whether they are entitled to 100% is an open question. Of course they paid the DIP and today Cineworld has submitted a document with ~250 pages of lawyer's BS on the mechanism of their plan. By the way it also contains information on interest rates for the new 1.4bn loan. Maybe Mooky has given up, at some point he understood that it all collapsed. Earlier today HNS_77 sold up... it tells more to me than Polars or Jangho because he was genuinely interested, actively engaged in discussions, did the numbers, expected some recovery like most of us.

Let's be honest if we appeal to morals we have little to no chance but if the current equity holders are to be completely excluded then they can't have our business but Ch.7 only! Chances are that they're not prepared for Ch.7 at all and would be forced to pay us something before taking this private.

@patiencebringsit, maybe worth outlining that shareholders have supported the company all along and arguably suffered more than other involved parties. Now that the company has had a chance to restructure we've been waiting for a plan but haven't been represented at all in the proposal. We ask the judge to return the plan for amendment and demand at least 10% equity in the restructured company. Then we'll allow them to keep the PLC, perform consolidation of 10 existing shares for 1 in the newco. :)

Oh yeah, Wolf, poor lenders, I feel sorry for them... they've collected 30% interest on their loans and as soon as Cineworld ran into liquidity problems they pushed them into Ch.11 and through in the DiP funding to pay the lawyers to make sure they get 100% of the business. The adhoc group will take CINE private and sell the business over time. I do not agree that there are "no winners here" - lawyers have got 50m$ and left nothing for the shareholders, a total waste of space. All secured lenders are fully covered under the plan, just look at the current liabilities + they walk away with a much better functioning business.

Hexam, the group lenders haven't left us anything because they are short sighted. There would be no D4E as such because of reputational damages, where "all asset sale" fits better. At this stage is doesn't matter what they value their new equity at, 3.5 or 4bn who cares, by the end of the first trading session the SP could be some %s down.

hello mountainous, may well be legal but a bad idea. No way they can keep the newco. public after shafting existing holders. By the way it's a terrible plan, they take both US and UK cinemas and want RoW sold to cover their current liabilities... our directors value Cineworld's assets at 10bn$ and that's what they put in those dockets and now there's nothing left for existing holders.

@johnpwh the plan is for 100% but what's unclear to me is what actually becomes a newco.? Possibly the lenders group could take their assets private.

" Once all the refinancing has gone through and the dust settled it may well be worthwhile becoming an equity holder. "
That's exactly what the current lenders hope for! Instead they'll end up holding the most shorted stock and be a couple of % down on day one of newco.

Bushy, you forgot to add # notAdvice because as soon as he presses the sell button our permits will land :D