Member Info for WolfofWarks

"The reality here is that a heap of work is going on in the background for that exact reason - that Cine will be a going concern not destined for the scrap heap as those RNS would have you believe… or put another way the direction of travel hint is in those lawyers bills, not the RNS.'

Elvis - the outcome here is extremely uncertain. By virtue of the bankruptcy proceedings CW in not a going concern. The directors have a limited control of the company at the moment and it's living off a DIP. Newco no doubt will be a going concern though but that's after the carcass has been ripped apart and the lenders have their meat.

I actually find your take on this quite irresponsible, especially given how you appear to be from some sort of accounting background. All off the back of some summary detail on a legal invoice in which you have no idea of the questions being asked or the context.

The problem with the Big 4 is that these should be a Big 8 or 12. They take too much money in advisory fees and they don't want to detriment and lose a client. Have a listen to the IC podcast - there's an interview with the FT journalist who broke the Wirecard scandal and he did so by basically poking around some of the offshore companies and following the cash, or lack of.

Hi Elvis - The $4bn loan is not Ad Hoc - The DIP is the Ad Hoc loan - however the funders behind the $4bn are the same funders behind the DIP according the chart of page 27, which makes sense because they have essentially put themselves to the top of the queue now by virtue of them having first lien.

Elvis - the whole point of the D4E transactions is that the lenders will swap some of all of the debt for equity. So the debt may fall away, although I suspect not in its entirety, but this will be by virtue of the lenders essentially taking the lions share or dare I say it potentially all of the company.

Usually a line is drawn through the old company and the new capital structure is achieved by setting up a new company. This is why I have cautioned you against jumping to conclusions regarding the content of that legal invoice. Because these discussion regarding the re-organisation will no doubt involved the takeover panel, FCA and have tax considerations that need to be investigated. The DIP consortium is basically the power broker now.

Hi Jeff - think of Libor as having a variable rate mortgage loan.

The difference between mine and Hexam's number is that I've picked up the finance expense line with includes hedging, fx movements, and other associated finance costs where I think Hexam has picked up the line for bank loans and overdrafts.

Hi Jeff - I've just had a quick look at the interims and it's about $500m for the first six months of the current year. However there was $230m relating to leases which is an accounting adjustment rather than proper interest so you could net this off to $270m for the first six months. This was before DIP though so I would expect the final interest paid at year end to be well in excess of $540m.

Not too sure if any of that rate is variable either so could be substantially higher if so given what's happened to interest rates this year. They may have swaps or hedging in place though. Haven't looked into it with any great detail,

This also doesn't include the Regal Dissenting Shareholders claim nor the Cineplex judgement.

This is why I find it hard to see anything other than Newco coming out off this am I assume those two amounts owed will then fall away with the old company.

Elvis - I have to say that that I am awfully confused on your position. The company has run out of cash and is living off a C11 lifeline and you think the RNS wording and GC statement were too risk adverse?

Going concern is not a listing rule as you put it, it's an underlying accounting concept.

Jeff - very back of *** packet valuation that myself and Hexam knocked up a while back using nothing more than a return to normalised earnings x realistic PE ratio.

Interest paid should be in the interims, if not the annual report won't be a million miles out. The DIP rate is probably buried in them dockets near the start of the proceedings I would think.

Elvis - Page 27 of the opening presentation has a decent breakdown of how the debt is made up.

The top three lines are the bits that have been refinanced which were basically the initial COVID rescue loans and I assume rolled up interest takes them up to the $1bn payment.

It doesn't give interest % though, which is something Jeff was asking about earlier. Maybe they are in the annual report.

Hi Elvis - The loans should sit somewhere between $5.6 bn.

The DIP on a net basis added around $600m to the debt, as you say $1bn was used to refinance the existing debt - also at the outset of the DIP $300m was used of the initial finance to clear the ROW debt.

So you are looking at something along the lines of:

Bfwd debt - $5bn
DIP - $1.9bn
Less - Primer Loan Repayment $1bn
Less - ROW repayment $300m
Cfwd - $5.6bn

This is very bag of a *** packet though.

Hexam mentioned the other day that the leases are around $4bn - these are a moving target though as they are being constantly re-negotiated.

Elvis - that was two sensible statements in a row regarding going concern so now I'm completely unsure what your position is.

'As you know it is the directors who are required to produce going concern statements so at the interim, the directors were most probably so busy, they allowed slaughter and may to go p-tong on advisory so they filled their boots with advisory fees on the RNS (you can see this in the lawyers s bill). As Cine has two ex seniors auditors o it’s board, one from Deloitte one from KPMG, they would have been inundated with documentation and emails from Slaughter and May, who “guess what” put their legalese on it. '

This is pure conjecture on your part. I would argue that given what has happened here over the last two years the GC statement is the most important part of the annual report and/or interims and the part that would have needed to be worded the most carefully in order to communicate a precarious position to the markets. If the directors haven't took ownership of that as you are suggesting then that really is poor and for me a completely unlikely scenario. While they wouldn't have written it work for word they would/should have owned the content.

Hi Jeff - it doesn't matter what happened pre COVID it's the now and what might happen in the future that determines valuation. Mooky and co need to show a decent roadmap to profitability. The debt holders will want their money back or a stake in the reboot if Mooky can convince them of its potential.

"Let's face it wolf anyone that listened to your opinion when it was in the lows 2s is probably kicking themselves no offence;-)"

Jeff - My opinions are around the fundamentals and the prospects for the company long term rather than the share price on any given day. More based on investment rather than trading. I see Magmanus and Poor have moved on!

Elvis - I really don't agree with your assessment of going concern as being a mere box ticking exercise. Maybe for the majority of rich FTSE 100 groups but for small caps and struggling companies it is absolutely essential. CW's statement in the 2021 and interim 2022 was very detailed and comprehensive. It certainly wasn't box ticking, neither should it be. Surely looking what has happened since the 2021 annual report is evidence enough of the importance of such statements.

I'd be interested to see the importance of film to streaming subscribers.

Me personally, I watch box sets mainly on Netflix, Sky & Amazon. Not really films.

Disney is the main platform where I watch movies and they are usually the children like Toy Story, Monsters Inc, etc, and I expect once my son is older we'll be watching the marvel films together. Oh and I watch Star Wars as well.

On a very simple PE basis the future value of the company is probably in the region of $2-4bn imo. Sales proceeds are unlikely to clear the debt. the DIP would get paid off and maybe more of the senior debt.

Ian - would would the junior lenders get paid first? Who are the interested parties outside the DIP consortium? What evidence so you have that CP leaked the stories? The judge mentioned as sale of one the potential options on the reorganisation plan.

I posted a link to Investecs site re cineworld yesterday. They are advisors and worked on the Regal acquisition. What they are doing for them at the moment I do not know, nor does anyone else.

You see the thing is Elvis you are so certain of what you think is happening, the truth is none of us know.

Plus I’ve never said I was an auditor, ever. Stop being so childish.

I left HSBC trading platform as it was getting ridiculous on what that would let you buy. They literally wrap you up in cotton wool so it's no surprise to me they are on that list.

Maidit - your information is out of date. The second half of the DIP funding was announced in the court dockets, although it wasn't new news so probably wasn't RNSable.

Plus the interims were released at the end of September which used graver language, in particular in the going concern statement.

Hexam - you are indeed right. I think once I start reading his posts by eyes start rolling up!

Yes last weekend he told us that the sales documents were being drawn up .....