Member Info for WolfofWarks

'WoW, I agree with you that the company will not emerge unscathed. It has already suffered that as it has dropped from a high of 300p to 5p (98% drop).

If there is dilution on a re-structure, let us see what that is or could the creditors propose a convertible debenture which matures to stock options at a later time and importantly a later price point?

Time will tell but I'm content sitting on an average of 3.2p and maintaining my long position.'

The company will come out of this, the question is whether shareholders do and to what extent the damage. Yes the rice has dropped but if the D4E goes badly it will fall even further, possibly to zero if the D4E ends up with someone taking neatly all the equity. Likewise if the D4E doesn't happen and holders walk away with ROW it could go up. Is all that maters regarding the SP is how many additional shares get added and whether the lenders if they take full control want to keep the company public or go private.

If Vue but the group for example it will end up going private at the guys behind them are hedge funds, private equity, etc. The company cannot honour it's current convertible bond so I'm not too sure there would be much investor appetite for another one unless if was at an extremely attract rate of interest for them. CLN's bring though own problems for shareholders though.

'Cineplex aren't a party to the Ch11. Their claim sits at the PLC level. They tried to get is registered but it wasn't'

Wellington - I trust your judgement as much as anyone on here but I'm not sure this is right. I'm almost certain I've seen dockets where they are the largest unsecured creditor on that particular committee followed by BNY Mellon who have a $213m convertible bond.

'I doubt very much if any deal will involve repaying the lenders all of their debt either because a bidder will play hardball with them or the deal will include a partial repayment of debt.'

You're forgetting that the whole purpose of the C11 is to maximise the recovery for creditors and whoever else might have a claim against the company - trade suppliers, employees, etc authorities, etc.

The point is RI is order for the future value of the business to be realised existing holders need to take a hit either in the form of significant dilution (more than likely) or wipeout (a possibility).

Ri - debt excluding leases is over $6bn

The debt needs wiping out at least partially at without it the group has questionable profitability. If the debt is included within the sale the purchase price will be peanuts.

The ROW debt is still in existence it’s just been taken on by the DIP consortium.

‘ Yes, there is a C11 restructure with a number of proposals that need to be agreed with creditors but it is not withstanding a sale of the entire Group and one that can absolutely achieve a high bid and subsequently translate into a higher market cap of the current one which is just ~£60m.’

Then it’s a question of how many new shares are created as part of the restructuring and refinancing of the rest of the group.

'This idea that many have that the debt has to be paid off right away if a takeover occurs is illogical.'

I would agree with you if it were not for the C11. The company is in bankruptcy proceedings and the aim of the lenders here is to maximise their recovery or take a palatable haircut which offsets against the equity they will receive in the business if the D4E goes ahead.

‘ No Wolff, just enjoy a bit of intellectual challenge with you old bean whether it’s IFRS, Goodwill or something else

And I’m still, given you think tax is an irrelevancy, or NOL Motions that Investec are suggesting, still waiting for those great brain cells to impart you wisdom on why both debtors and creditors advisors (in equal measure) are interested in the $2m odd of tax work EY are doing.

Are they doing the tax comps or just running a dating agency for the taxman perhaps?’

What I say and what you hear are increasingly becoming two very different things.

Surely you’ve got something better to do with your life than troll me?

Coo coo …..

‘ People do pay extra for control, often a 40% premium to the undisturbed share price, but this is a forced sale of a distressed business.’

I think this is the point that most don’t understand.

‘Shareholders will get paid for our shares IF we vote to accept an offer, the only risk is …..is the offer enough. We don’t loose our shares just because Vue (or whoever) buy us. We own a part of the company’

Hamish - No you won’t. CW have put the assets of the group up for sale, not the group itself. So any proceeds received will go towards paying down debt in order to satisfy the requirements of the C11. Whatever is left after the sale is what you will have a stake in. What it will be worth and how much debt will be retained, along with that happens to the Cineplex claim is anyones guess.

If Vue do buy the company rather than the assets literally billions of shares will be created to make this happen.

‘ Ctc Sharebel has slipped to number 8 on pumpedordumped leaderboard not trying hard enough.
Would advise newcomers to dealing in sny share to look on that website before taking any notice of anyone on chat posts’

How is Richard Jones only 46th in the list of all time rampers.

Sharable - honest question for you if I may.

Have you got any idea how this transaction will work and who will be the beneficiary of any proceeds?

Also where the shares will come from to make any possible takeover happen?

Vue was already private. The only mention I’ve ever seen is that they exited the business. On what terms though who knows.

'CW have put forward a plan which they feel values the business fairly, and squeezes out some more cash from the lenders in return for equity. '

Other than maybe some finance for working capital I very much doubt lenders will be stumping up any cash. The consideration will be in terms of how much of the debt gets written down for the equity.

Alak - how much each area is worth is dependent on sales, margins, profits, cost base, assets, debts, cash, etc.

Hi Bullbears - I'd be careful in drawing comparisons between a small business with a global giant in the middle of one of the most complex corporate processes a company can go through.

'Well If they did purchase regal for $5.8bn then I’d argue the raw valuation should be even higher than$6bn…unless the regal estate has plummeted in value…'

Bullbears - of course it has, it doesn't make any money at the moment. You can't really look to the past for an indication of future value. Especially during times of high inflation and interest rates as they play havoc on equity valuations, especially for companies that do not make money or have promise of xyz profits in xyz years into the future.

"Let’s flip the script. Say Cineworld get no buyers and go into chapter 7 bankruptcy.
Lenders lose almost everything."

Ian - that's not true, their debt is secured and they have first lien. So in the case of C7 there would be a fire sale of everything and virtually all proceeds go to to the DIP consortium. This is why they put up the finance for the C11 because it jumps them to the top of the payment queue and they win either way.

Elvis - grow up the adults are having a decent conversation here.

'My basic premise is if the raw value of the entire asset is more than the debt - then surely it shouldn’t go bust if it can find someone to invest. And the more premium they can convince someone to pay I. E through their marketing - is that we’ll be left with.'

Bullbears - if this was the case then they wouldn't be in the mess they are in. They would have been credit worthy and wouldn't have had to go into C11. Although the liquidity problems have been a battle since COVID which is why they have the legacy priming facility which made any future re-finance all but impossible and is why the ad hoc group are now holding all the cards.

'Let’s just say you have unlimited funds at your disposal, your in the market for a cinema chain, and someone comes to you with this entire cineworld operation with no debt, no cp judgement and it’s performance is around 2019/prepandemic level. '

Hi Bullbears - in order for the company to be debt free it would need paying off by any potential purchaser. That's $6bn+ straight way which I doubt the company is worth anywhere near. So straightaway you've got to arrange a haircut with the existing creditors and/or decide how much debt the company has got to carry forward.