Member Info for TheMadStork

Note that my view is they *will* just about squeeze out of the immediate jam and come up with the cash/a last minute waiver. But what about when the RCF has to be refinanced? What about when the bonds mature? And assuming they do have to pay any sort of fine to Cineplex, where is the lending coming from then?

There is just too much debt. Debt that could be about to massively increase further, debt that is becoming more expensive to service as interest rates rise and, fundamentally, debt that CINE can never realistically repay. It's only a matter of time before the inevitable happens.

You only have to look at the current fiasco with the RCF covenant to realise that lenders are losing patience. No waiver has been granted and CINE are presumably desperately scrambling for the cash to pay it down, all without informing the market, natch.

The thing is, the Cineplex judgement is pretty much irrelevant; the existing debt is already more than enough to sink CINE. The market clearly does not expect Cineplex to be able to recover anything close to the amount of the judgement. Contrary to what the bulls here think, this is not because the fine is about to be overturned/massively reduced, but rather that Cineplex will be near the back of the queue for payout when Cineworld collapses.

Plenty of IIs were still holding when DEB, TCG, CLLN, MCLS etc etc went bust.

If Mooky sells any then it is obviously game over and he knows that, hence why he has been trying to extract as much cash as possible via wages/bonuses.

The only reason it is not 0p is because equity markets are always the least efficient. It will get there eventually.

In the mean time, CINE appear to have committed a clear breach of the rules by failing to inform all investors that they a)are in clear breach of the RCF debt covenant as of 30th June and have not (so far) secured either a waiver or the cash to pay it down

b)have failed to make the final payment to the Regal shareholders on the 30th June, as they had previously RNSed that they would.

I don't think so. I suspect they've probably managed to just about keep the wolf from the door for the time being. If they'd defaulted it would already be known - creditors would have no reason to keep quiet even if CINE themselves didn't feel like announcing it for some reason.

The final destination is, however, pretty much inevitable.

As I said the other day, I did not think it likely that it would be lights out today. *Possible,* sure, but not likely. They almost certainly have enough to keep the show on the road in the very short term.

Also, if and when the fat lady *does* finally sing, I'd prefer to have already closed my short, as I know from experience that getting paid out in that scenario takes *ages* and one has to keep paying short interest the entire time.

Very odd. I would have said for sure that they were obligated to update on both the RCF covenant test and the Regal shareholders.

I think we can only say two things for sure:

1)Good news: They have not defaulted. No way could they avoid informing the market in that case.

2)Bad news: If the RCF had actually been paid down/ a waiver granted and the regal holders paid off then Mooky would be screaming it from the rooftops. Instead... silence.

My theory is that they are doing everything possible to delay payments, stiff suppliers/landlords/other creditors for as long as humanly possible in order to scrape together the money to pay down the RCF. They haven't got a waiver since that would definitely have been announced in advance, as the previous ones were, and they haven't defaulted since that would have to have been announced.

As part of said creditor-stiffing, they have probably assumed that the Regal holders would be ok with deferring their final payment yet again. It's just possible, however, that they have told CINE to bugger off and this has thrown a wrench in the works. I'm expecting some sort of fudge to keep the show just about on the road for the time being. We shall see.

I think eventual administration is almost a certainty. Hopefully looking to exit before then as I know from experience that
when a company goes bust shorts can take aaaages to get paid out.

I think they will just about muddle through. It's unlikely the lenders call default today. That *is* technically possible though, and like I said, if there was really good news (ie the RCF balance has been paid off, Regal shareholders paid off) then it would definitely have been announced by now. I'm expecting some kind of fudge announced after hours that satisfies no one but keeps the show just about on the road for the time being.

My average on my short is 42p.

Yes they have an obligation to update on both counts. Anything material must be RNSed. The fact it has been left to the last possible moment would not fill me with confidence, were I a holder. Y

Mooky is very, very quick to announce good news, hence the rapid fire trading updates at the end of last year and the announcements of the previous waivers well in advance of the due date. You can bet that if there were anything good to report (positive trading for H1, RCF paid off) he would be shouting it from the rooftops. The silence since speaks volumes, in my view.

"They stated the base case is 85% of 2019 and we are at around 80%. "

This is badly wrong. See my previous link.

"Mad stork - what is this years cumulative North America box office so far?"

https://www.boxofficemojo.com/year/ytd/

Note that these figures are not inflation-adjusted, so the true picture is actually worse.

I agree it is unlikely the lenders will call default, but that the covenant has been breached is beyond question and CINE need to inform the market. It's *just* possible that they have scraped up $300m and have also managed to fob off the Regal shareholders *again*, but given the overall poor box office performance in H1, and the leaving of the announcement to the last possible minute, I am somewhat sceptical.

Also, while June has been a very good month, one swallow does not make a summer. YTD 2022 is still very poor and there are still fundamental issues re cinema. CINE have a huge mountain of debt, with interest rates on the rise *and* a £700m judgement hanging over them. The second order debt currently trades at a large discount to par, meaning the debt markets think the equity is completely worthless. I agree, hence why I have had a large short position for some time.

I'm sorry, but anyone who lacks a basic understanding of the relationship between revenue and profits should not be investing on their own.

Also, I would point out that the UK box office is only 10% of CINE's revenue. 70% is from the US, where the YTD box office is currently just 65% of 2019 (per boxofficemojo).

CINE have missed their 'base case' - 85% of 2019 - by a country mile and will thus be in serious danger of default on the regal payment and of being unable to pay down the RCF to 35, thus triggering a breach of the debt covenant. The fact that there has not been news on either is not a good sign.

"TMS you were also predicting that we would never come out of suspension a few years back"

I think you have me confused with someone else. I was sceptical on EUA since the sale ramp kicked off (and to be fair if asked I would have *never* expected it to come back and rocket as it did) but only started really following it from Dec 2020. I also didn't predict the successful ramp of Sep 2021 or a few other times when ramps worked.

What I have been absolutely consistent on, however, is that EUA's 'assets' were never worth any more than £50m (2p/share) at the best of times and the share price would *eventually* reflect that. Post war, EUA is worth cash in bank only, and the share price will eventually reflect *that*.

I cannot predict macro events any more than the next man.

What I *could* predict, as someone with a tiny amount of understanding of markets and mining stocks, was that EUA at 40p was overvalued by a factor of 10-20 and that the share price would eventually reflect reality, as opposed to some ludicrous fantasy dreamed up by the paid promoters at ACF and the unpaid but utterly clueless rampers on here/Telegram/Twitter.

It's not rocket science.

I've been calling this as insanely, ludicrously, overvalued since 40p, and banked a very tidy profit on my short. Fundamental value is cash only, so sub 0.5p. It will get there eventually. Anyone who listened to me and other bears has done nicely/avoided a big loss. Anyone following the rampers has been done over. That's just how it is.

It never fails to astound me how so many still believe there is - or ever was - a buyer. Coming up on 3 years on sale with no bids, no bidders, 3 placings and an 8 month long 'due diligence' process on assets that were only ever worth buttons to start with, and far less than that now.

Cash in the bank is about 0.5p/share as at 30 May. That's all this is worth. Less, actually, given the gigantic burn rate.