Member Info for tidd83

M00la there is a difference in securing further debt financing for an acquisition than for just day to day running costs.

Adding debt to service the mountain of debt they already have is NOT an option.

Nobody in their right might can continue doing that. Lenders have already pushed the covenants to an EBITDA to debt ratio of 9.0x.

Debt is already in junk bond territory and has been downgraded on the ratings board, who is going to continue doing that?

This is exactly what I am saying, they will want blood and it will be done via equity - that is where investors lose out.

M00la sure - list their other options for all to hear and to offer that balance.

freekick perhaps - but a simplistic approach, assume the following to balance your post.

Shares at 30p with 50% dilution leaves an end result of 15p.

Debt reduction and revenues resume, at 15p the company could return to 30p or evening 45p but that is 100-200% gain to the share price and the MCAP.

The level of dilution would be determined on appetite of the market, who knows.

Regardless there needs to be a huge uplift and turnaround for the level of debt sitting on CINEs books to be paid down.

Does somebody on the positive side (instead of posting silly comments) have any idea on the operating costs? All of which are also not going away even when opened, the reason I ask is even before debt servicing they will likely be running at a monthly loss.

M00la absolutely not, I will not be buying CINE since I stand by my views.

I don’t feel the company will go under I merely feel existing holders will be wiped out so why would I invest at any point or even want in lower?

Equally my views may make people sell at a loss and protect what remains of their investment but on the flip side constant bullish rubbish can see investors jump in to lose it all.

Balance is needed.

themuir my posts nor anyone’s here will have any bearing on the share price. This is not a micro cap. It is the institutions who move the market in CINEs case.

A bearish view is often welcome against a bullish so to offset the ridiculous posts of “big rise tomorrow” which is a finger in the air guess.

I am interested in the companies developments and I am entitled to post my views.

The post was to counter the argument of “the biggest holders and the board won’t dilute themselves at this low level”.

The debt and revenue structure (or lack of) is playing out in exactly the same way as CINE.

I am comparing the circumstances not the business sector.

RS202 one other thing, the results you commented on are for 2019.

2020 is where the focus is and your comments take zero effects of COVID into account.

Surely you know this before posting such comments?

M00la of course but similar scenario.

Over borrowed and no clear visibility on revenue streams.

Exactly the same - a recipe for disaster.

RS202.

Very simple to copy and paste extracts, I can quite easily find posts to counter your argument.

Look at what has now occurred, increased PPE and sanitary costings, face mask requirement, reduced visitor count to date, fear of second wave and now major films pulled from the screens until 2021.

Let us see who was right, I wouldn’t be so dismissive and open your eyes to reality.

M00la again absolutely no different to Hammerson.

When forced into a corner they don’t have much choice else the lenders call in their loans. Figure it out.

M00la - why wouldn’t they?

Hammerson for example have just done the same - share holders wiped out circa 94% if they do not double down to stand their corner.

As I said - good luck.

I have made a few objective but posts on here which have been shut down by a few dangerous and ill informed posters - some of which are still peddling ridiculous I’ll informed comments to all involved.

The main point which concerns me is the lack of acknowledgement for the dire situation CINE are in with regards to their debt position. To keep things simple there are a few factors investors must understand before listening to silly posts about take overs, AMC rose x so CINE should too (and the best one) - debt does not invest or interest private investors.

1. CINE will release its figures on the 21st August which will of course not make for good reading due to COVID-19. The market knows this.
2. CINE recently renegotiated its debt position with lenders to prevent a breech of its covenants. These were raised from 5.5x to 9.0x on an EBITDA model which requires revenues to substantially increase in Q4 in order to cover the new ageeement or else they will breech again.
3. Given point 2 is unlikely (new films are delayed until 2021, substantial reduction in seating required due to COVID rules, cinema goers will be required to wear face masks and so likely stay at home to stream films that can be seen in cinemas, PPE and sanitation will increase CINE operational costs but to name a few).
4. To satisfy this breech something will need to be done, it is without question lenders can’t keep increasing - as such they will likely request a debt for equity swap, or request the company issue a rights issue or placing to reduce the debt to reduce a large portion of debt owing.
5. The above will likely mean wipeout for existing shareholders, an increase in shares available at a potential huge discount to garner interest will dilute holders to nothing.

I strongly suggest point 5 is researched for those not involved as it is without doubt the likely conclusion to keep CINE afloat. This will occur sometime in the coming months ahead of a covenant test and not on/or after.

Good luck with your decisions.

Brilliant post redmur!

Onulesin, on the contrary - I don’t hold here I followed the company post Intu with interest due to the unfolding economic chaos.

"The point I raise is the Fitch score associated with the DEBT, which has a maturity of 2023, is something corporate investors need to concern themselves with not private investors."

That is the most ridiculous post I have ever read. You are invested in the company which is exposed to the debt, nobody mentioned trading debt but the debt is on the books of the company you own.

If the covenants are breached can you explain to me HOW they will service this debt?

Do you understand what a debt for equity swap is and how that is extremely detrimental to the private investor for which you claim they have no concern?

RS2002 - who said anything about CINE going bankrupt?

What I said was if the covenants fail testing (having already been risen by circa 40%) then either debtors will need to raise again (unlikely) or they will want capital reduction.

How do you propose debt will be paid down? Debt for equity and share holders in such circumstances will take an almighty haircut.

That is what is likely to happen here if as I said the run up to December outlook does not improve (and IMHO it is unlikely to)

Sizeable Spike In Leverage: As a result of the cash burn in 2020 and the gradual return to normality envisaged in our base case, we see Cineworld's funds from operations (FFO) gross leverage rising to about 10.0x at end-2021 from 5.0x at end-2019. The figure is unlikely to be meaningful in 2020 due to low EBITDA generation. The gradual return to normality by 4Q21 should enable Cineworld to reduce leverage down to 5.0x by end-2022. A second pandemic wave and further lockdowns would be the main downside risk to our base case.

Covenant Breach Likely: Cineworld's 2019 results indicate that the company had US dollar and euro term loans totalling USD3.6 billion and a RCF of USD462.5 million. The RCF is subject to net debt-to-EBITDA covenants, which are triggered at above 35% utilisation, and the term loans also have cross default provisions in respect of the covenant. However, our base case forecasts that the leverage covenant increase to 9.0x for the December 2020 testing may not be sufficient and may require further flexibility from Cineworld's lenders. This flexibility may also be required in 2021 depending on the level of cinema attendance.

True, the Two Daves will put a dent in Hammerson’s £3 billion net debt and, unlike at Intu, secure survival. Bizarrely, they even “expect to resume dividends” this year. And, of course, they’ve been unlucky, including the corona collapse of a £400 million retail parks sale. But Mr Atkins has earnt £18.5 million over his ten years in charge. And the duo got too many big calls wrong. Sadly, the joke’s been on the shareholders.

And then some of the comments are useful - one contributor often writes a lot better than the journalists, and he notes:

From the Hammerson RNS:

"The Capital Reorganisation will result in Hammerson shareholders holding: 1 Consolidated Share of 5 pence nominal value for every 5 Existing Shares of 25 pence nominal value"

So you will end up with fewer shares (not more), but each new share having the right to subscribe to 24 new deeply discounted shares.

Basically, its a very strong incentive for existing shareholders to cough up at least as much as their current holding is worth. If they don't, they'll be massively diluted.

Times article above:

All comedy duos like to bow out with a bang. But who could have expected such a bravura twist from the “Two Daves”? They’ve made their final hurrah a Hammerson horror show.

It’s left investors crying with laughter — or maybe just crying. True, Covid-19 is partly to blame for the swansong routine of the outgoing chairman David Tyler and chief executive David Atkins. But their black comic genius still shines through. What better treat for shopping centre audiences at the likes of Birmingham’s Bullring and London’s Brent Cross?

The pair’s main skit? Issuing no less than “3,678,209,328 new shares” via a £552 million rights issue: a sum trumping Hammerson’s pre-announcement £430 million market value. It was such a jaw-dropper it came with a 1-for-5 share consolidation. The new stock? “2,400 per cent” of the old register.

Still, that’s not the best joke. It’s that the rights issue is being priced at 15p, a 94.6 per cent discount to the consolidated price. Yes, 15p. Or a thirty-sixth of the 534½p at which the Two Daves launched their £3.4 billion all-share bid in December 2017 for Intu; their rival which went bust. That Intu-Outu caper, which incensed investors, ended with them recommending shareholders vote down their own deal. Worse, they followed up by breezily batting away a 635p-a-share bid approach from France’s Klépierre.

Yes, times have changed, with the corona mayhem accelerating shopping’s shift online and seeing clients refuse to pay rent. But even so. There’s another puzzler, too. How does anyone square the rights price with the half-year net asset value? Yes, it’s been cut by 21 per cent. But apparently it’s 458p per share. Are the property valuers and auditors having a laugh? Or is the dislocation between the market’s view of Hammerson’s value and the one in the accounts really that vast? Or is there actually some real value there? The shares, down 15 per cent, closed at 47½p.

True, the cash-call’s got the backing of Hammerson’s two top shareholders. But at a price: APG, with 20 per cent, gets to buy the half it doesn’t already own of VIA, Hammerson’s European designer outlets venture, for £274 million: an “18.7 per cent discount to gross asset value” and a deal “conditional on the rights issue proceeding”. Activist investor Lighthouse Capital, with 15 per cent, had already prised a board seat. And now, remarkably, its boss is allowed to make comments in Hammerson’s interim results statement. Is he now in charge?

Both knew of the Two Daves’ weak hand, even before they coupled a £1.09 billion loss with the warning that without the £826 million cash coming in there’d be a “significant doubt” over the group’s “going concern” status. The five rights banks capitalised on it too, with a mickey-taking 15p underwriting price. Banking, legal and other fees totalled £32 million.

True, the Two Daves will put a dent in Hammerson’s £3 billion net debt and, unlike at Intu, secure survival. Bizarrely, they e

Poker I could not agree more.

It will depend on what those "technicalities" are - needless to say, legal and consultation costs will not be cheap and all fall to the bottom line in terms of cash outflow.

It is a headache they certainly do not need right now