Member Info for WolfofWarks

Hi Jeff - my assumption would be that UK and US are covered by the C11 as they make up the substantial bulk of the business.

The SP has no relevance to the D2E transaction. It's only useful for traders and people wanting to exit at this point. Hexam has it spot on - The debt holders will decide how much of the new cineworld they wish to hold in order to reduce their debt to the £1.9bn facility. Don't forget on top of this landlords will need to be appeased in order to issue favourable lease terms to CINE.

The BOD no longer have full control of the company from this point on.

Profitjock

Chapter 11 is simply the US form of going into administration. It's a chance for the company to try and re-organise their balance sheet in order to survive. The main difference between the US and UK is that in the states the directors still retain a small amount of control during the process - courts still have to approve major transactions, entering into new legal agreements, etc. In the UK an administrator takes full control of the company and usually involves a fire sale of the assets or an attempt to find a new buyer. In both situations the aim is to try and maintain the company as a viable business (going concern) but this is nearly always at the expense of the existing shareholders.

Chapter 11 is part of the bankruptcy code.

Everybody hails the success of Hertz. The existing holders at the time of the C11 only took 3% of the equity in the Newco.

The company have not taken being completely wiped out off the table either.

Every creditor would not have agreed this as most are powerless it will be the large secured lenders with the big skin in the game. It's madness to think even for a minute that a global corp could arrange an agreement with every single creditor.

Jeff - they have to restructure the balance sheet. The fact that chapter 11 is even an option shows how dire the situation is. The company have told us they have an issue with near term liquidity. This means cash is running out and they have exhausted their current borrowing capacity at a time when cheap easy money is no longer available.

We know what the balance sheet looked like 31/12/21 - it was bad. The most likely outcome is that it now looks considerably worse.

“At present no one knows 100% what is going to happen”

Whilst we can’t be 100% it’s obvious what the highly probable outcome is.

To quite from your own post earlier from the RNS:

“The strategic options through which Cineworld may achieve its restructuring objectives …..”

All of the options are with the aim of deleveraging the balance sheet by significantly diluting shareholders, the ‘restructuring objective’. What we don’t know is precisely how they are going to do it and how much of the company or newco will be attributed to current holders.

It’s happening though, don’t kid yourselves on that.

Well as we know the presumption is that a reader of accounts knows what they are looking at.

In real life though....

Hi Hexam - It's definitely a grey area and one of much discussion. I always like to be armed with facts, especially if I'm putting my own money on the table.

So I agree with the new treatment and it's cases like Cineworld which for me are why the new treatment is correct, otherwise they would be able to window dress a further committed expenditure of £4bn which at a time of poor liquidity and a time where said leases are being deferred or amended continually - it's also multi portfolio so not like they can fend off one landlord and ensure continuity like if they were running a factory or an NDC.

This was infinity and his TG group putting the frighteners on people with their unintelligent nonsense.

Well I know this share has been the most heavily shorted share in the UK market for absolutely donkeys yonks.

That's certainly a fact!

I'm not some autistic whizkid so haven't got the exact historic levels committed to memory.

I would have thought the higher the share price got the shorts would have increased by logic.

Herehopin - I suppose that would depend on whether they covered or not.

I don't know what the historic short positions are.

Hexam - I think you have your head buried in the sand regarding the lease liabilities mate. The reason that the accounting treatment changed was to allow this form of previously 'off the balance sheet' financing to be visible.

So that those who make credit decisions and do due diligence can see how much of the companies future working capital is already committed.

It just brings the treatment in line with HP and Finance Lease treatment where this has always been the case.

It is money they owe - just not necessarily today.

The 9% short were the ones who carried out proper due diligence.

Decent research would have identified a company on its arse up its eye balls in debt in a declining industry with too much competition.

This was evident 2 years ago.

Due to the timescales stated I would have thought an immediate rebuttal would have been a sensible move, certainly from a PR/IR point of view.

Why leave your shareholders in the dark overnight?

You have to be a liar to be a politician, it’s a prerequisite.

If you told folk the truth nobody would vote for you/

AJ - what you have described isn't a restructure.

How could the company manage this without dilution?

What does it have to offer the debt holders other than it's equity?

"If our earning get back to $4bn annually.....we will be fine, more than fine."

FTH - I take it you mean turnover, not earnings?

Your being persnickety - it you don’t make your rent payments then the liability remains on the balance sheet, ie it is rolled up.

If you read note 20 it actually states that the reason for the decline in both right of use assets and lease liabilities is due to the modification of lease and the IBR used to discount them.

Yes but a corresponding entry is made in the liabilities section - if those liabilities are then not paid they remain on the balance sheet.

MIKODX - how do you think they will deleverage the balance sheet if they cannot do a placing?