Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
I think we should have a Hexam Youtube Channel.
Will help while away the time until we get the Business Plan at the end of Feb.
Reading through the dockets and what the lawyers have been doing I would guess that:
Plan A is to go through a Debt for Equity swap leaving Mooky & Co in charge with as much of their equity in place as possible and an opportunity to get more through management options based on performance. If that doesn't work;
Plan B is to stretch the timeline out as long as possible to get the best price for Regal & the UK assets as the recovery comes through and then fall back to the RoW operations as a base to build again from, which is where they started from anyway. However, Mooky isn't in complete control so it may be that;
Plan C is that they all get fired and the creditors take the lot.
Or in terms of Quantum Mechanics, I think we have Schrödinger's cinema company.
Cineworld is in superposition at the moment, until an observer opens the Chapter 11 box.
The shareprice is therefore currently the average of the probabilistic outcomes.
@Retail
That's the $64,000 question.
No doubt someone will be along to say it will be one hundred pennies in the pound by Friday and another will say sell it all now it's worthless.
Congratulations @Whited on being the 225th goon I have filtered!
(Yup, I just counted them)
I'd agree with Hexam, although it is a bit like being caught between the Scylla and Charybdis.
Argo's recent cash infusion is an opportunity to get out, there is no long term business there, unless you don't understand that Bitcoin is a Ponzi scheme and will be priced at zero eventually
The Cineworld business has a positive future, but whether it's the creditors or current equity holders who benefit from it, that's to be seen. The market thinks that it's more likely to be the creditors, but there are ways for current shareholders to come out OK.
So on balance I'd rather have a small chance than no chance!
Hi StanleyPro
I don't disagree, although at the moment the BoD's responsibility is towards making the creditors whole and not the equity holders (i.e. Cineworld) - if a firesale makes the creditors whole and shafts the shareholders then that is what they will ultimately be obliged to do.
No doubt part of these manoeuvres are intended to show that the two interests do overlap and thus I expect most of what is going on is window dressing to play for time and thus show that the business is more valuable in six to twleve months time that now.
I read this as that whilst the Board remains in control of the process (i.e. to present a restructuring plan which they have asked extra time to do), although are obligated to market the business for sale, they are ruling out selling the assets piecemeal, which would be relatively easy but wouldn't recognise the full value of the Cineworld business as a whole going concern.
So they will job the whole Group (which I take to mean the businesses in CH11) around the market to see if someone will take the whole thing off their hands, which is possible but unlikely. The note about the Takeover Code etc means that the transaction would not be for Cineworld's current equity but for just the assets/ subsidiaries and so shareholders wouldn't get a say in the matter.
To me this looks like a way of extending the time in Ch11 as long as possible to hope for an upturn in the markets and thus to improve the position of the equity (and thus the Greidingers c20%) via a vis the debt when a D4E finally takes place.
I think that people need to hope that either no one comes forward on these terms and so the process gets dragged out until Cineworld can turn a profit or that several bidders emerge and a competitive process results in a decent sales price (!).
If you Google "very significant dilution" (and exclude Cineowrld from the search results by putting a - in front of it) most of the examples mean over 90% dilution, or of that magnitude.
No idea where we end up, but it looks like the BoD are playing the long game whereas the creditors are looking for a quick resolution.
@ganbitxjs The banks will get their money back, in fact they lent the DIP money to push themselves up the creditor queue to ensure it.
What is not clear is whether there is any value in the equity.
@Bonkers0801 is quite correct, we don't know if ultimately the rump of the business will be sold off to pay down the creditors leaving equity with nothing or if a NewCo is spun out with the creditors taking the new equity leaving current shareholders with nothing.
I don't know the outcome of the Ch11 process and whether it will see an attempt to get Cineplex to accept xp in the pound as a way of closing the matter down, but I would really like the case to go to appeal.
Having watched some of it and read the papers, I really think that Barbara got it spectacularly wrong and would like to know if that is the case!
The pandemic was bad, but that judgement effectively cut off any chance of new financing (see Israel's Day One statement).
It's new - filed yesterday:
https://cases.ra.kroll.com/cineworld/Home-DownloadPDF?id1=MjMyNTg5NA==&id2=-1
I wouldn't be surprised if this is the first of many requested extensions.
Looks like they are playing the long game, hoping that business picks up and that the Group starts to turn a profit again, which is good news all round.
@Wolf - Agreed
The most salient point about this article is the bit at the bottom which wasn't reproduced:
"With assistance by Sabah Meddings"
She was at the Sunday Times and is now at Bloomberg and is the one who broke the CH11 early on.
Seems like Ms Meddings still has her informant in the Cineworld camp.
@ Wolf apologies, yes I am mixing up my posters.
And Elvis has left the building (via a Green Box)
Elvis, you might want to dial down on the disco biscuits.
Wolf's analysis is pretty much spot on.
It's his prognosis and voyeuristic interest in Cineworld that I have issues with.
(And for the record I'm an FCA and (IIRC) Wolf is a retired corporate lawyer.)
They are buying time, hoping that the business recovers and thus improves their relative position. The longer that they can draw this out, the better the chances are that the equity has some value, whereas if the details of whatever transaction is being mooted are settled now it would be based on low earnings and a compressed multiple.
In six months, both numbers could be much better.
(Or worse!)
Every little helps.
Although this is like welcoming a wave when the tide is in charge.
It was mini-Budget remorse last week when chancellor Jeremy Hunt pressed Ctrl+Alt+Del on Trussonomics, and 10-year gilts fell back to 4%, from a recent 4.5% peak.
This is alleviating some repricing pressure on property values, but REITs are trading at discounts to net asset value (NAV) last seen during the global financial crisis (GFC), and the lack of REIT executives buying their own stock doesn’t add confidence.
In September, the narrative was between Truss the radical tax-cutter and Sunak the cautious inflation fighter, but on fiscal matters they weren’t far apart. Sunak derided “fairy-tale economics” of unfunded tax cuts with soaring inflation, but promised tax cuts once inflation had been “gripped”. There was an element of timing and tone.
Rishinomics showed complacency about recession by raising taxes. The OECD warned against the UK’s “contractionary” position and urged “slowing fiscal consolidation to support growth”. Until the OBR reports on 31 October, the downgrading by Moody’s of the UK’s economic outlook to negative is likely to cast a pall over gilt yields and REITs.
The cheap borrowing taps have certainly been turned off and REITs face challenges in beating costs of capital. Cyclical downturns precipitate consolidation in capital-intensive industries and REITs need to reduce their costs, including by shrinking boards, with fewer COOs and CIOs.
Five-year interest rates have risen from 1% to 4%, lending margins from 100bps to 200bps and equity from 5% to 10%, so the squeeze is on and spread traders have been priced out of the market. Meanwhile, Landsec and British Land are 40% smaller by equity market value after a decade of cheap borrowing, which is the raw material of these firms.
REIT shares trading at GFC discounts could invite a rerun of the £35bn of asset privatisations in the noughties. Disclosure is better, but still not adequate, so mergers and acquisitions (M&As) must be agreed, with only two successful hostile bids in the past 30 years: Slough Estates expensively acquired Bilton in 1998; and Hammerson unwisely outbid a management buyout for Grantchester in 2002.
There has been £9bn of M&As since 2019, with cash offers pitched at NAV and, on average, 30% above share price, and such activity could kick off again. The sector is overpopulated, with a proliferation of spread trader REITs, and is overdue for winnowing. Too many REITs are controlling too many assets and those with the lowest cost of capital have the capacity to cut rents in a downturn, invest to combat depreciation, green-up their portfolios and afford the best managerial talent.
PIs can short the market with a SB or CFD account although that is an ersatz short.
Usually, that position will just be netted by the House with longs going the other way, but if *loads* of PIs are going short, the House will cover off its risk and hedge the bet by putting on a proper short in the market.
So yes, it *could* impact the true market price.
But in this case I suspect that it is more a figment of Magmanus's pharmacologically addled mind rather than an actual market phenomenon.
I agree with Bonkers0801.
NOFEAR is a disingenuous clown and living proof that even a stopped clock is right twice a day.