Member Info for tidd83

Something else to consider is the legal spat between Cineworld and Cineplex following the collapse of the deal.

This is a massive headache Cineworld do not neet and cannot afford, the legal case alone will have a detrimental effect on their cash positions and who knows what a negative outcome will do.

The complexity of the deal structure and who is right and wrong is not clear but there are certainly grounds for review. In my opinion Cineworld changed stance based on the economics and to try and keep their own house in order, perhaps looking for technicalities to pull the plug.

Whether those technicalities warrant the cease of the deal who knows but it does seem somewhat convenient to walk away at such a time of unrest.

Legal case, heavily indebted, low customer base, struggling revenue streams, increased costs to open, no visibility on revenues.

It makes you think.

Good money after bad?

Objectively forget your current position - knowing how thing stand economically right now. If you did not have an investment in Hammerson would you buy one now knowing what you know? Debt is still incredibly high and with the disgraced government taking the economy to wrack and ruin (especially in the retail and commercial property sector) would you buy?

If your answer is no then you should know what to do. Loyalty offers nothing and a bird in the hand is better than one in the bush.

Onuelesin - just to be clear if you dont take the RI you will potentially lose 94.6% of your investment.

If you invested £2000 you could potentially end up with a net result of £100 if you don't take up the RI, if you did you may in effected need another £2000 to keep your current investment level.

All figures are approximations but it will help explain the process. You can sell your entitlement to RI but it is just another factor to consider.

The issue with CINE as is the case with Hammerson is its debt and covenant testing.

Opening of the complexes will be at a cost to CINE, reduction in seating and costs for sanitary and PPE requirements. The film listings are going to be poor with most major film makers delaying their films until 2021.

Add in the issue of now being required to wear a face mask and the whole buzz of the experience goes away, many will just stay at home and watch their streaming services (many people are also still living in fear thanks to the the governments consistent fear campaigns).

Their guidance on revenues is not exactly clear, their debt has been recently downgraded to junk bond territory and it is now one of the heaviest shorted companies on the market.

IMHO if you really want exposure to a sector in extreme trouble with a company ladened with debt and you aren't sure how the RI is structured perhaps it is best to wait until it is all resolved and to see if the VIA deal goes ahead before making any decision.

A lot of people clearly do not understand what they are buying and, if they do not take up the RI after purchase or even know how to deal with it they will be wiped out.

However there will then be a RI to offer you 24 shares for each 1 you own at 15p.

If you choose not to purchase those (effectively doubling your exposure) your initial capital will take an almighty hit.

I guess that makes my target lower...

Poker well spotted, indeed you are right.

Agreeably you would then need to calculate the prior write down on the books given the low sale price.

The portion sale of VIA is effectively (or was) a key revenue stream.

The raise will bolster cash positions and service debt to keep the sharks at bay HOWEVER, in order for this to work the retail sector needs to see a near term upsurge back to normality.

Will that happen? I for one do not think so. There will be more pain to come however it does allow the company to stay afloat in the hopes the economy turns but it will be a long and slow recovery and given the situation around rent collection and pricing mechanisms I do not believe revenues will be sufficient to keep the wolves from the door.

down, I calculated that earlier but if you review the TERP url below and add on VIAs proposed sale value (if concluded) you will see that I was pretty much bang on.

https://www.trignosource.com/finance/TERP.html

whatever price you pay be sure to stand your corner in the RI or you will lose practically 95% of your investment.

Effectively you need to double down. Why would you?

And then there is £2.2bn debt to add to the mix...

Either way - personally I would not be buying in the market today.

Those who choose to take up their RI will cover the destruction (but as I said more good money after bad).

Those who do not will have their capital decimated.

There will be some bits and pieces ive missed like reduction in nominal value benefits ££ but thats my interpretation

This should help;

766,000,000 in issue today @ 384m mcap = 50p per share.

consolidation for nominal value reduction @ 5-1 to leaves 153,000,000 in issue = £2.50 a share.

153,000,000 x 24 RI shares = 3,672,000,000 new shares to issue

15p RI price x 3,672,000,000 = £550,800,000 cash raised

3,672,000,000 + 153,000,000 existing shares = 3,825,000,000 (total issue)

Which gives the company post todays MCAP price...

£384m existing MCAP + cash £550,800,000 + VIA sales of £274,000,000 = £1,208,800,000 enlarged capital

£1,208,800,000 / 3,825,000,000 = 31.6p per share.

Dave Atkins, do not pass go - do not collect £200 and whilst on your way sell your property back to the bank at discount value to cover what you owe them.

"The company said on Thursday it would look to dispose of more assets to bring its loan-to-value ratio down."

Crown Jewels already gone, anything else it sells to cover the outstanding £2.2bn of debt (if this RI and sale is successful) will just eat into future revenues.

I feel for those who are in there and have lost. All down IMHO to a huge over reaction by Government which has resulted in total destruction to the retail sector.

I cannot see how this can recover, even if the shares are taken up the future revenues look uncertain given the new Index tracking based model. Only 34% of revenues have been collected from Q3 (an increase of JUST 4%).

The raise has been done at a huge discount to NAV which shows the appetite of the market, NAV is illusionary in this case since continual write downs are on the cards. The INTU estates are being sold off into a market with little appetite which does not help in the marketing valuations of those Hammerson wish to sell.

Not entirely sure how debt will be serviced going forward this to me feels like sticking a plaster on a gaping wound (if they even get it away at all)

https://www.ft.com/content/4240275a-110a-4a6d-9412-31e9267ba441

Poker yes but more good money after bad?

The retail sector will not recover for some time. HMSO newly designed policy on setting variables rents against an Index is quite inventive however it appears its a means to an end to just ensure rents are paid.

Ultimately the real question will be can they hedge as, whilst prices may be lower at present for occupants it is only merely to secure a foothold. (Some payments are better than none) - I cant see their debtors following suit and reducing their rates against a suffering market place.

Rent collection: As at 31 July 2020, 72% of H1 2020 rent had been collected for the Group, with 34% of Q3 rent due collected. Average rental waiver of 1.1 months and deferral of 0.8 months during Covid-19 closures

34% only a very marginal increase.

It’s shareholder wipeout in order to survive unfortunately.

Look at INTU, the only way potentially they have garnered interest to raise such an amount in these markets.