Member Info for WolfofWarks

Hi Jeff - I haven’t been able to confirm anything.

Hi Wellington - Finance is my passion. It's like a hobby to me, I research everything I can. When a case like this comes up I have to know everything I can about it. It makes me a better investor and keeps the instincts sharp.

Plus you never know when all this is done there might be an opportunity here.

I've been through loads of the court docs now and I haven't been able to ascertain who the secured lenders are.

There are two charges on the Plc companies house page both to Barclays but both state that they are something like 'administrative agents'.

Some of the finance is being provided lower down the corporate structure as well so not necessarily at Plc level.

Ian - You have this completely wrong. Firstly the $1bn is only clearing one of the tranches of debt, not the entire debt of the DIP lenders. Secondly hedge funds, investment banks, private equity, pension funds, etc, all have the ability to lend in the $bn's, in fact retail banks are less likely to lend that kind of money.

From what I've read the brokering of the Regal deal by HSBC was them dipping there toe in large scale corporate advising in the UK market.

Ian - the RNS clearly states that the acquisition would be paid for via a rights issue.

Hexam - I’ve just concluded the same. The RNS isn’t that clear - I think they underwrote the rights issue which paid for Regal. It’s not clear who is behind the ‘committed debt facilities’.

Hexam - I’ve had a look and think the same. I’ve found an article where they were confirmed as broking the deal and it was a bit of a flagship deal for them, nothing about them putting up the funding though.

I’ve checked the annual report as well and the lenders are not named.

I must adjust other than Ian I’ve never seen HSBC mentioned in any of this, not to say they aren’t involved.

Can’t find anything in the court docs either that names the DIP lenders.

Found this presentation interesting from the kroll site. Gives a good invite into the debt structure and also the DIP facility.

https://cases.ra.kroll.com/cineworld/Home-DownloadPDF?id1=MjI3Njc5OQ%3D%3D&id2=0

Ian’s had such a poor grasp of this whole situation that I’m starting to think he is on a wind up.

There are no ‘main’ lenders. There are secured and unsecured. The article I posted earlier seems to suggest that the DIP party have 52% of the creditor vote - they can out vote HSBC. HSBC might even be part of the DIP group - we don’t know for definite, probably in the court docs somewhere.

Plus I’m pretty sure if any creditor has to write a loan off in a D4E they will be able to write it off against their tax bill - the only difference is the stake they are given in the new company will be subject to capital gains when/if they dispose of it.

Either way round the tax system gives them their relief. The likelihood is that the lenders have written off some of the debt when it first went bad.

Usual caveat - I’m not a tax expert.

“ Cineworld’s like this. ‘ Wolf****s ‘ has posted 333 comments about CINE which are all doom and gloom. He or she may be several people posting under one name. They have a vested interest in you selling. In the post pandemic time this is the most certain I’ve felt about any share. The court case is going to be in Cineworld’s favour and the sp will recover. There are many wealthy people who want us to think otherwise.”

Just spotted this. Just to confirm I have no financial interest in this whatsoever. I’m here purely for my own knowledge and understanding. I also only have one login - I’m sure a quick communication to LSE can confirm this.

“ They have a vested interest in you selling. In the post pandemic time this is the most certain I’ve felt about any share. The court case is going to be in Cineworld’s favour and the sp will recover.‘’

It’s comments like this that are the stuff of dreams. Even if the court case has a favourable outcome is simply means the company is slightly less fecked, the shorters called this right I’m afraid. If you are a long time holder and you’ve watched this drop from over £1 then your comment is ridiculous. If you’ve just bought in on conviction than you are purely gambling like my pal Poor and the now missing Figtreeharry, the latter who was desperate for everyone to pile in while it was in his interest and had now done a Shergar.

Jeff

Stakeholders are typically:

Customers
Suppliers
Creditors
Debtors
Employees
Shareholders
Government
Interest groups (environmental, activists, etc)

Basically anyone who has an interest in the company either actively or passively.

I once had an exam question on stakeholder theory around the building of a nuclear power station. Endless possibilities and parties affected, could really get my teeth stuck in.

You look at deadline site from which I posted the court filing they’ve got quite a bit of coverage from the proceedings.

If the reporting is correct the DIP party have 52% of the votes, so marginal control, bit like the brexit vote.

https://deadline.com/2022/09/cineworld-regal-cinemas-bankruptcy-1235111953/

https://deadline.com/tag/cineworld/

I’ll just caveat this with I’ve not listened to any if the proceeding so cannot verify if any of this is correct, I had not come across deadline before.

I commend you chaps on your balls!

Jeff - you hold your stake in the company via your shareholding, it determines your voting power and control over the decision making process at AGMs by appointing directors, passing resolutions, etc, etc.

“ Wolf was that the media report that the recent rns regarding holdings was about.”

Hi Jeff - yes the RNS confirmed they still hold the shares - the report initially stated that they has misfiled information, presumably a clerical error on CINE’s part.

There statement didn’t mention whether they have been used to securitise their family loans, which they must have done as the FT have made reference to their filings.

Hi Jeff - it’s confirmed in the initial court filing that the family’s holding company has a 20% stake still.

I guess the post D4E stake would depend if the new majority shareholders would want him running Newco. If so maybe he gets offered a decent package options etc. Could he even be given a slice of Newco for getting the D4E over the line - who knows.

In a bankruptcy the existing owners have an interest in keeping zero to ?% of the their stake but that all depends how strong their hand is. This will become clearer this week after the creditors meeting has been held. I would suggest if you have $3mn in the bank and over $5bn + it’s not all that strong.

Massive losers here potentially are BNY Melon who have an unsecured claim for a loan of $213mn according to the filing and they are way down the pecking order.

Regarding the stakeholders point, yes shareholders are stakeholders but are right at the bottom of the queue. If you look at what’s happened the DIP lenders are jostling for position as they are now at the front of the queue. I presume the buying of the ROW debt rights was also to give them more power when this comes to vote.

https://deadline.com/wp-content/uploads/2022/09/Cineworld-Chapter-11-Filing-Creditors.pdf

Have you been on the kroll site?

I assume it will be documented on their assuming it's part of the proceedings.

Hi Poor - my post was with regards to the balance of power with landlords. I haven't got a clue how many sites will close. I'd like to think not many and it's the debt that is strangling the company rather than the operations once things pick up.

It's a weird one as it's hard to look at how they could be differentiated. I was thinking maybe they could show sporting events, but you'd basically turn the cinemas into pubs and even they are struggling. Plus margin is probably pants compared to popcorn, tied to brewery, etc, etc.

Fwiw once you’re options become D4E and c11 you’ve usually exhausted all other avenues and the vultures are circling.

Mooky’s not really in charge at the moment, the courts and the creditors have the power.

There was an article in the FT the other week which suggested that the family has used the holdings as collateral for loans so it might well be he’s not in control of his holding anyway.

“
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https://www.ft.com/content/d73682bf-a7fc-446e-a2e3-a503fdf56bd0

Global City Holdings’ accounts show that it began 2020 with £595mn of debt “secured by Cineworld shares”.

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In March 2020, the group replaced a £420mn margin loan with a smaller £210mn debt facility with “no margining provisions”, after selling a 7.9 per cent stake in the company for £116mn to repay some of this debt. The accounts also show that the group repaid an additional £117mn of debt in the first half of 2020.

In July 2020, Global City Holdings “breached certain financial covenants” on this debt facility and “did not pay” principal and interest that was due, prompting lenders to send a “reservation of rights letter” warning that they could take action against the borrower.

In September 2020, the Greidingers refinanced the loan with a new lender, while striking the deal to shift ownership of Global City Theatres to DKG Park. Cineworld has previously disclosed that the new lender was British hedge fund Sand Grove Capital Management, but has not disclosed the size of the loan.”

https://www.ft.com/content/d73682bf-a7fc-446e-a2e3-a503fdf56bd0