Member Info for WolfofWarks

The dip is lifeline financing to get through the c11 process, it’s not a permanent solution. Now those lenders want their money back and are top of the queue for collection.

Bullbears - they’re two years past the point of being able to trade their way out of this. They are in breach of all their loan obligations and have run out of cash. Even with the improved performance of Avatar it’s one hotly anticipated film.

It’s all about recovery for the first lien lenders now.

'First lien lenders do not want to take on the company. One of them being landlords. '

That's not true - landlords are not in the ad hoc group. This is outlined in the first day presentation.

Some of them may still be secured lenders but they are not in pole position like the ad hoc group.

they've basically gone from 'potentially' to 'expected'.

Patience - just do the maths. £6bn debt is secured by the ad hoc group who have first lien. The company is worth no where near that, the bids received if reported to be correct are not interested in the main bulk of the business which is the US and UK. That's before you even take into account the Cineplex claim. The bids are not even all cash.

I'm not saying it's final by the way but the continual use of the word 'expects' or 'expected' paints the picture of what it happening at this point in time.

absolute cretin.

The scenario has now been realised, that's the difference. The debt is so vast and the value of the company in relation to it is so small. I knew it was a possibility but I didn't expect it to happen so quickly.

The RNS is basically saying that there is no chance the creditors will sign off any plan that allows shareholding to have even a slither of the pie. Which means they are now fighting for pennies in the pound themselves.

Basically the ad hoc group are pretty much going to walk away with the lot.

Feel sorry for all the decent long term holders here.

‘ i have never heard of a share dilution on the stock Market where investors are left with no shares ?’

This is your problem Maid. I dont think you really have an idea what’s going on here. Typical chartist/trader type.

Probably the latest incarnation of Fig Tree Harry, Magnus, etc.

Maid - the $1bn refinanced the facility that was put in place during COVID. I think they may have paid a small amount to some of the landlords iirc but they didn’t pay off all small stakeholders.

Tegop - ROW is only extradited from the C11 process in terms of them not having the automatic stay from legal action that the c11 territories have.

In terms of them being an asset they are very much part of the group and any D4E transaction. Remember the DIP lenders put up the finance for ROW debt to be cleared and own the rights to it.

So if Newco is created all of the subsidiaries would move into the new structure unless they have already been sold.

Bullbears - they can’t have certain resolutions for certain individuals Creditors.

They are bunched into classes and a queue is formed.

Penta - I’m assuming all the loan covenants have been breached so not too sure how relevant the repayment schedules are now since the C11.

All shares rank pari passu which means they have equal weight. So the lenders can’t sort Mooky out with his 20% and leave you all high and dry.

If they want him at the helm of newco I’m sure he’ll end up smelling of roses with a decent package plus equity plan.

The lawyers are not leaking. There was a court hearing.

It wouldn't make sense to liquidate. Without the debt there's a decent business underneath.

My guess for the lenders a D4E would allow them to turn the business around and exit in order to get their money back, bit like what is happening at Vue.

The lenders like Cine would explore all options in order to maximise their recovery - so talks with AMC, etc.

'On another note, why cant the lenders accept a D4E to only partially wipe out the debt? Why the sudden rush to get their money back? They can clearly see the recovery in the industry taking place.. surely it makes sense to lower the debt to a manageable level and let Cineworld get back to its money printing ways. Never a loss making year until this once in a lifetime pandemic nonsense.'

They want to recover as much as possible as soon as possible - the roadmap to profitability isn't straightforward either don't forget. The debt holders will have have to taker some pain here as well as the sum of the parts won't come close to the $6bn owed.

Why would they want their money back now - high inflation and interest rates eat into the time value of money. If you look at UK inflation at the moment £1 last year is only worth 90p today.

'fingers crossed but its all the same language used about a possible wipeout.. amigo is in the form of a 19/1 RI that the FCA pushed for saying shareholders shouldnt benefit. Now the courts will agree that shareholders should get nothing from this proceeding.. why are shareholders always done out of their money? wahhh'

It because they are back of the queue and have limited liability. If a company goes under you lose the value you paid for the shares. Whereas if you were a sole trader or a limited company with a guarantee your lenders they would come after your personal assets.

'well, AMC tried to negotiate with the lenders.. and was confirmed by Cineworld that all negotiations will be held through them.. not the lenders.'

Cineworld are not really in a position to enforce this though as it's the lenders who ultimately cast the votes that decide what happens here, especially after this sales process seems to have fell on its ****.

My son can't wait for Mario.

I had to watch feckin' Puss In Boots yesterday for nearly two hours!

Hi Tegop - The debt facility was taken on by the DIP lenders - they created a new holding company to stick it all under.

So while ROW is debt free from a Plc perspective the debt had just moved from ROW to DIP. That's why the DIP financing was so high - it cleared the ROW debt, the priming facility (which was stopping them getting further financing) and working capital to get them through the C11 period,

'The shares may be in the Plc but Cinema City International N.V. (which was valued at £500m in 2014 when it was bought by Cineworld) are where those operations remain registered.'

RI - It doesn't matter the Plc ultimately owns the lot. The D4E will involve either billions of additional shares being issued to the lenders in order to (partially) satisfy the debts. Any parts that are sold in the interim will lessen the dilution but obviously there will be less businesses, future profits, etc, going forward.

There will likely be a debt facility in place as well as the new company will need working capital, etc.

If the lenders take over the group they take over the whole lot including ROW. The D4E in my view would be at the Plc level because the debt held is at the Plc level or at least in the holding company structure part of the group, if that makes sense.

The shares you own are in the Plc not attributable to different parts of the group. I think the bit where the Plc retained ROW would have been in the event of a sale of the assets, which may still well happen but I wouldn’t have thought in their entirety if the offers are lowball. Even then it wasn’t clear whether ROW was or wasn’t excluded.