Member Info for Wellington99

Hi BobMathews!
As a long term reader and first time poster can I also offer you the novel experience of the green filtered bin?
Byeee!

@ Wolf - good spot, many thanks.

@Wolf
Humour me.
Did you vote to Leave or Remain in the EU vote?
(Obvs you can tell me to sod off, but I have a theory)

My guess?
It'll be a financial bidder, probably Goldman Sachs, with a back room sweetheart deal.
They get to buy it for circa USD5bn that clears most of the debt (the DIP interest at 20% has already made most of them whole from this level) and leaves nothing for shareholders.
They then sit on it for 6 to 18 months and then dispose of it with the capital structure sorted out and cash flows running nicely for a 30%+ profit, maybe even to Mooky in his new vehicle. Mooky & Co will run it for them in the intervening period for $$$ in incentives to hit easy targets.
Shareholders get nothing from that transaction but they get the RoW business which will be made to look unattractive with dodgy debt and charges.
Mooky the munificent will buy that for 20p per share which many with a base cost of a few pence or massively reduced expectations will think is great deal and so it will go private.
(I expect that the financial bidder has already agreed to the financing for the second deal as you have to remember that Mooky's current shareholding is financed with debt by GS and so all the transactions are linked to make sure that they are made whole on that transaction as well.)
That RoW business gets 'the treatment' and it's suddenly a vibrant cash cow looking to acquire other entities.
(BTW I don't have a very high opinion of Mooky as a human being, but he is a great runner of cinemas, possibly the best.)
So the lenders get pretty much all of their money back, Mooky gets his empire reset to where it was 20 years ago and can follow the same playbook to get to #1 cinema operator, short term speculators get a 4 to 5 bagger and think they've won the lottery, institutions get take some losses but it's a rounding error to them in their portfolio and PIs who thought that they were equity partners in a PLC and bought in at over a quid get shafted.
As Gordon Gekko said, if you are not inside, you are outside.
The whole Chapter 11 thing is dinner theatre for us muppets.
Frankly, looking at all the data, that's the only structure that makes sense.

I'm guessing that if this was what came to pass that Mooky would take the whole thing private again and they would get 100% of Mooky!
(Which would be fine by me as I've had more than enough of him!)

@ Hexam - thanks, that's what I thought but there's very little information around on that part as it's not part of the Ch11.

I agree, unless it's caught up through some kind of intercompany guarantee, the RoW piece is what underpins the current share price suggesting that they are worth something and not zero.

Can we have a think about RoW for a minute as that might be what gets left behind in the quoted PLC?
I've seen some posts that RoW is debt free, but I think that the original RNS stated that the RoW debt was simply refinanced into a new company and so is still in existence.
I think that it matters since the RoW a small but quite profitable bit of the business which if left behind after the US & UK have been taken over by the lenders, if it is all equity financed then that would be something worth having, but if it is still leveraged up to the eyeballs then it's probably not worth much.
Anyone got any better info or thoughts?

Nope.
Covid and Mooky's incompetence (no MAC clause in Cineplex) has wiped out the equity slug and severely damaged the lenders recovery rate.
I can't see anyone bidding anything like the amount needed for us to get anything.
Our best bet is a restructuring where everyone puts new money in - shareholders have already taken their pain and now creditors need to have a haircut and then everyone needs to recapitalise the company.

@Bonkers0801
Then the Guest List will be very select, and you will be on it!
- Anyone got a forwarding address for Latpulldown he seems to have go AWOL ;-)?
- NO FEAR = NO BEER
- poorinvester = Your name's not down, you're not coming in.

Very balanced post Hexam.

Although I believe that the *correct* answer is "to the moon!"

After acursory review, given the number of intercompany and related party references I'd say that one of the emerging plans is to jettison UK & US to the creditors and use Cineworld RoW as an escape pod for the Geidingers and the creditors want to see if the directors have been planning this all along and squirreling assets away in RoW and loading up Regal with debt.
Just a guess.

50p or 50p per share?

Doubt it's anything to do with Mooky.
If they are considering a restructuring which includes D4E and some of that debt is held by individuals and they need the debt holders to consent to any transaction then they would need to know if the proposal was palatable to those investors from a tax point of view.

Thanks Hexam - it's a long old slog this, isn't it?
For clarification, the £1 by Friday could be the share price *or* the market capitalisation.
Only subscribers to my newsletter etc etc.

Be a £1 by Friday.
Wouldn't like to be out of this over the weekend.
Etc etc

Odd that it's a story at all.
Cineworld have said that they are approaching 30 or so parties who maight be interested, so it would be weird not to contact Vue.
The fact that Vue are in no position to deal is neither here nor there, it's the process that is required.
As an aside, taking two broken cars and welding them together rarely results in a reliable automobile.
I guess that Mooky would be happy to come back saying that no one wants to/ or can afford to buy them so the creditors should back the current management and suck up a D4E deal.
With the right incentives for management obvs.

Excellent stuff @Hexam & @HN&_77.
So in short, £1 by next Friday and you wouldn't want to be out of it over the weekend?

(I don't know about everyone else, but I wish that they would just 'open the darn box' so we know what the answer is. There have been so many false dawns, I do hope that the end of Feb for a draft plan doesn't get delayed!)

@Hexam
I agree that there's very little new here, although if one were to engage in a spot of 'Kremlinology', it would seem that this is a shot across various parties bows not to engage with the creditors directly, as the DIP/ Board are in charge of the process and won't countenance low ball offers that break the group up.

Understandably, I think that the creditors haven't responded to the initial plan as they want to see if (by some miracle) someone comes forward with a knockout offer that makes them whole so that they can walk away rather than get roped into a longer saga.

Who knows what will come out of all of this, but it doesn't feel like the BoD are rolling over and handing everything away to the creditors which seems to have been the base assumption of the market to date.

All in all, mildly bullish (which from a price of c3p, isn't too hard to be!)

I think that the future is bright for cinemas in general - Amazon, Netflix etc have added to the amount of content which is being created and given that streaming looks like hitting saturation point, I wouldn't be surprised if many of their larger offerings get at least a few weeks exclusive theatrical releases in the future. It adds a new revenue stream and improves the visibility of the release.

However, what we don't know is who will benefit from the lion's share of this development:
Narrowly speaking, will it be Cineworld current equity holders or Cineowrld creditors?
More widely, will it be the theatrical exhibitors, the content producers, the streamers or will it be the viewing public?

I see the streaming industry a bit like the shale oil industry - huge amounts invested to gain market share, but the capital providers made no money from the process, instead the big winners were consumers who benefited from lower prices and extra supply.

@ra11adw meet Green Box,
Green Box meet @ra11adw.