Member Info for WolfofWarks

Penta - you can't use EBITDA on businesses that have heavy lease payments. Cineworld themselves use EBITDAl in the accounts which is EBITDA less lease repayments.

Even then investors would be far more sophisticated than applying a simple multiple on this figures as it takes no account of what debt might be carried forward - the forward EBITDAL figure has to be recovered first so it's far from certain - that will discount any potential valuation. I would suggest maybe a multiple like that could be used when the target is making consistent or growing cashflows and is liquid.

If the dilution is significant you'll be looking at way more than 20% more shares.

Ian - that's absolute nonsense. An investor will only pay what they believe it's worth given the methodology they are using to value the future free cash flows. Which are then discounted by their cost of capital.

I think a simply step would be to look at what the PE ratio was on average around 2019 and then work out what the earnings are likely to be if profit did reach 2019 levels again. That would give you a rough idea of what it could be worth.

That's not to say companies don't end up overpaying but this isn't the jewel in someone's crown, it's a corporate rescue.

Intercompany transactions are meat and two veg for large groups of companies, I doubt there's anything sinister going on. Quite often they are just cash loans between entities to help manage liquidity. Or it might be share of central overhead or central facilities like the loan arrangements, management charges, etc. Obviously this all needs tidying up if the group is potentially being split up. The creditors will be sanity checking large transactions to make sure there is no skulduggery going on.

When companies run out of money they get taken over, end of, the idea that these tax losses have to be bought is absolutely ridiculous. Shareholders are at the back of the queue to receive any cash from this. In the GM example that you kept harping on about in relation to this existing holders got completely obliterated.

The losses obviously have some value to any potential purchaser but this will be tied up in their valuation of the company and from what I remember in terms of some of the criteria you posted the creditors are included in the vote to pass it through.

AA must be splitting his sides laughing when he sits in bed at night. No matter how much he screws them over they keep coming back for more.

Elvis - holders could still be wiped out without the need for c7. At the point of c7 you are basically saying there is no business to save, which we know is not the case.

This is an example of Hexam was saying the other day where you put two and two together and come up with five.

With all due respect Elvis you’ve only turned up here recently with your pigeon accounting.

We’ve been discussing this from the outset and you’ve missed the lion’s share of the decent discussions.

At no point have I ever said I think C7 is likely to be the outcome. There's a viable business underneath all the debt. The pain has to be one through to get to it though and it remains to be seen who will enjoy the benefit of it.

With that kind of dilution that would put 91.5bn shares in issue - at a MC of $4bn that's an SP of about 3.6p post acquisition for a debt free CW. I would say that $4bn valuation would be tough given the future free cash flows that still have to recover and the heavy discounting of those flows due to higher inflation/interest rates.

Re the ROW debt I don't think it's clear what the future is in the event of this part of the business being retained by the plc. I recon they would need to take on some or all of the ROW debt. The lenders are not going to let them walk off into the sunset while they are left taking haircuts or still have a load of risk on the table with the new owners. It wouldn't make any commercial sense.

It’s pointless getting excited about possible buyers until you know what the terms are, where the proceeds will end up and how many shares are going to be created to make the transaction happen and the C11 come to an end.

Plus how many shares end up in circulation at the end of all this.

The 40p JMP call is in the broker tab on this site.

Comcast ... a technology company .... another one who has got there eggs in the streaming basket.

It this gets bought outright I reckon it'll be a hedge fund or PE with the hopes of turning it around and either re-floating it or selling within five years. Bit like what's happening with Vue.

That 40p JPM target is from March 2022 .....

It's a piece of legacy data picked up by an algorithm ...

Didn't he farm turkeys?

Ian - they’ve just announced operating income of $2bn.

They are repointing sharpening the business and making efficiencies.

You make it sound like they are up **** creek.

‘ I personally feel Disney will not win, they might submit a proposal. But others out there with deeper pockets and greater need.’

Ian - disney is a multi billions dollar conglomerate. I doubt many other bidders have as deep pockets as them. Only the likes of Amazon and Apple but I seriously doubt they are involved - again their eggs are in the streaming basket.

Hi Doughb - the point is they already have the biggest portion of the pie right - their demands in terms of stake leaves the cinemas with less. Making that final mile part less profitable for them than other producers.

Hexam/Wellington - I was quite interested at the time and just had a look back. Docket 46 is your friend here. It looks like to the ROW debt has been cleared but the rights and liens attached moved over to the DIP lenders.

So as far as the group is concerned it moved from the left hand to the right. It did however stop those ROW subsidiaries not included in the C11 from going into default and basically wreaking havoc on the whole process.

So they are pretty aggressive in their negotiations with cinemas then due to the strength of their catalogue, that makes purchasing a cinema chain less lucrative for them compared to other producers.

'Wolf of course they wont go public with their intentions.. they have possible signed NDA's if they are involved in any way..
But all i know is that Walt Disney would be turning in his grave if no one snatches at this opportunity they have been blocked from taking for so long due to Paramount decrees.. I wouldn't write of Disney as a possible bidder just yet..'

I just don't think Cinema is the opportunity many people think it is. If you've thrown the kitchen sink at streaming, even Disney don't expect this segment to break even till 2025, then a move into Cinema's represents a backwards step, but one with question marks around viability and an uncertain road map to profitability. I can't imagine their shareholders will be best be pleased.

I listed to Bob Igar on CBNC earlier and nowhere in the results or subsequent interview have they outlined any kind of move into bricks and mortar cinemas.

Film making feeding into box office but with the ultimate aim of shoring up their streaming offering.