Member Info for WolfofWarks

Myoh - I think that's probably the best explanation of the current plight I've seen on here.

Fully agree with this part as well it's the crows lining up in the order they are going to pick at the corpse:

"I think the only reason that there's money going into CINE from current lendors is because they're trying to move up the priority list of debtors. A list that shareholders are bottom of."

HI Poor - this is the point - they are not looking to raise money - they are reorganising their balance sheet and a less debt laden Cine can then go back to the back to the markets for new finance and capital - although depending on how it is rescued it may well have a facility in place from it's new shareholders ie the lenders.

So let's say they negotiate down 80% of the current debt. They restructured company would move forward with only £1bn debt on the balance sheet.

The question then becomes how many shares have to be created for the lenders to take that haircut, how much of the company do they have to give them to allow this to happen.

The simple answer is I don't know but it will be a lot. In Hertz the existing shareholders were given 3% of the new company. In Vue the existing shareholders at the time exited the company - not sure if this would have been total wipeout or not.

Hexam - What kind of PE did Cine used to trade on pre covid.

I don't really see it as a growth business but if we're saying earning could be £400m on a PE of 10 that gives you $4bn as rough idea perhaps without doing anything too sophisticated.

Obviously that doesn't take into account any future interest payments either.

"Yes Jefff - I do feel that teh creditors are not so 'not on board' as is being made out.

CW have a lot of stuff up in the air, and a changed post pandemic environment means tehy need to get a few things recalibrated for further lending. Which is understandable.

Aside from teh CP case which is uncertain, there are leases/costs which tehy probably now have opportunity to nowto make more competitive. So the lenders probably said to them - go take these months - get your sh*t together and come back to us.

This is a profitable business. You dont see profitable businesses usually being put down!"

Hi - this isn't a situation that has just cropped up. The lenders and landlords are fully aware of Cine's woes and have been negotiating with them regarding their liabilities for over two years. The only difference now is that Cine has finally run out of cash and is living off a lifeline (the DIP) while its affairs are (hopefully) reorganised. Leases have already been reduced, deferred, etc, so it's unknown how much more mileage there is in that particular avenue.

Easiwynns - correct and this was what I tried to explain to Infinity on a number of occasions.

Poor you have to look at how much the company is worth without the debt or what newco looks like with a reduced debt burden, full slate, etc, etc. i don’t know enough about the business operationally to put a valuation on it myself.

The simple explanation to your question and I’ve answered it on multiple occasions is CINE will reduce debt by a capital reorganisation which will involved writing off some or all of the debt by issue using new equity either in a new company or by creating billions of new shares in the old one. The company have told you this will happen on multiple occasions.

There are about 200 documents on the kroll site setting this out via the C11 process.

I doubt that they’ll be debt free the questions are 1) how much of the debt will be on the table and 2) how much equity will be created.

Cine current owes £5bn just in loans and the company will be worth nowhere near £5bn. So it’s a question of how much of a haircut will the lenders be willing to take to have their slice (or all) of Newco.

I haven’t got time to answer now but I’ll go through all this tonight.

Sophisticated investors would probably value the debt free company by discounting the future cash flows. It will lowball the value though due to high interest rate high inflation environment.

There’s a broad rally going on so I guess this might not be the best place to be for traders.

Just to add that $271m of this facility has already been used to pay off the ROW lenders. So that debt now sits with the DIP group.

If you read the Bloomberg article $1bn of the DIP will be paid back to the lenders - the judge only deferred it to allow more creditors to come forward with regards to the D4E transaction.

The DIP funders are part of the original lending group, this is common in C11 as it gives them first place in the queue either in terms of the D4E swap or getting paid out of assets on the case of a liquidation.

Ian the judge hadn’t ruled anything illegal like you keep continually stating, only amended the terms. The 20% yield is compensation for not being able to carry out the transaction straight away.

The family cannot stitch up shareholders as the court appointed trustee is in control here and their priorities are the employees and creditors.

The new company or new capital structure does not come as a result of the deal but at the end of the c11 process, if it can be agreed. This funding deal was only the first step to keep the company solvent so the C11 can run its course.

I’d urge caution in dealing with a company that can’t even get the status of the shares correct.

You’ve got to put the Netflix number into context. They lost 1m subscribers. Still 222m left.

It’s more to do with the increase in competition in streaming rather than the resurgence of cinema.

My last few trips to the cinema have been good, but mainly because it’s been empty, which obviously isn’t ideal moving forward.

I'm hoping that the combined results of the enlarged company will hopefully start persuading markets that this is a big again. It's the debt that needs keeping on eye on from hereon in.

To become a meme stock you just need the meme crowd to start buying on mass. All the meme stocks have been well known US stocks though available though the likes of the Robinhood app to US retail investors.

If the 22nd is the trading update this information is already available on the Cineworld website. It was posted up here yesterday as it makes up part of the DIP.

The docs are a minefield. I was trying to scan through the more pertinent ones yesterday but I’m not a legal person so even trying to identify them is difficult. Like you say all written in legal terms as well which you would obviously expect.

The cash flow forecast was a good find though and the DIP link on the investor site are probably the main docs for me.

Hi Kammi - what would that RNS be? Actually we don’t need to restructure the balance sheet after all. We’ve just found $5bn down the back of the mattress.

Even if cineplex appeal goes well it just means the company is not in more debt. It doesn’t address the fundamental issues that the C11 is trying to address.

These moves are not normal though they are because of the Reddit guys. That won’t happen with a UK stock.

Revlon hasn’t been finalised yet.

The money to be made is from trading but it’s very high risk. One RNS could wipe your holding to zero.

That’s quite a sell off from here.

I’m hoping we see a bit of a rally this week.