Member Info for WolfofWarks

I'm going to Vue tomorrow afternoon and it's £4.99 for me and my boy each.

Not a bad price really. We are also going to Jump in later in the week and it's around £18 each.

Regards

Cinema won't of anywhere, just CINE in it's current form.

I fully expect this to keep trading and re-establish itself as Newco.

Tegop - one of the stats I found from a Google search was inflation adjusted and revs were stagnant.

Poor what you have described there is a low growth low PE scenario for an income investor. Not exactly exciting.

I think the pandemic and the slow recovery is because of streaming though along with other factors. You can watch too gun and minions at home already on sky store premier. The films are coming out quicker and quicker so the box office is losing its USP - it’s like death by a thousand cuts.

You can’t blame the pandemic - shopping has returned, restaurants are full, sports events, etc, etc.

It's scary

Have a look at cinema attendances in UK and US over the last 20 years - there has been no growth. To keep the attendances roughly how they are the cinema chains have had to make large investments in the quality of the experience. This has kept attendances treading water though, no growth.

If CINE do manage positive cash flow then it will be used to service debt - no investments in Netflix are going to be happening here.

To compare the potential here to Aramco is quite frankly laughable.

Poor - that’s the idea of the D2E. They convince them to save the company by giving them most of the equity.

Then a streamlined company with more manageable debt could borrow again.

At the minute they are likely to lose the lot so it’s a question of what can they recoup.

The ex shareholders won’t have much if any say in the new company. This type of arrangement happens all the time. They’ve simply reached the end of the road - the money has run out and there’s little options on the table.

I’d wager if you walked into your local cineworld and spoke to the guests hardly any would know this is happening so an ex shareholder revolt is unlikely to achieve anything.

Poor - just to add that the fact that there are multiple large creditors as well as hundreds of landlords makes this deleveraging transaction very difficult. There are too many stakeholders involved.

Poor - this is a potential bankruptcy. there will not be a solution that satisfies everyone. This happens every day of the week, it's just that this is more high profile. It's highly unlikely that in its current form anyone would lend CINE any more money. It's been done twice before on the promise of a recovery that hasn't materialised.

Plus for this type of rescue the capital is not out there like 12 months ago. High interest and high inflation macroeconomics make investments where returns lie far in the future completely unviable.

A streamlined CINE with substantially less or no debt on the balance sheet will be able to go back to the markets for finance and capital as it will be a profitable business. It's highly unlikely that current shareholders will be a part of that though.

"Yes... the mkt cap of Vue in the debt for equity restructuring is £650m......CW is x3 the size of Vue......plus they have the option of selling the european division to reduce debt......ch 11 does not always result in shareholders receiving nothing look at hertz!......"

Hertz shareholders only received 3% of the shares in the new company, plus a load of warrants.

Plus part of the reason the shareholders did so well was the hedge funds paid off all the debt but the company value going into the bankruptcy had been pumped up by all the Robinhood traders by something like 600% so they ended up getting a tasty distribution form the old company.

This was on the promise of a COVID recovery and the semi conductor shortage playing into their hands. CINE haven't got such luck unfortunately.

"Lenders will not want that gamble. Better to hold off and wait for their money to be paid. Than right it off in the tiniest hope of making it back from shares in the new company. Until the company is worth something, there will be no dilution. IMO"

Ian - You are missing the point. The minute CINE go into C11 they are saying they can no longer meet their existing commitments, ie there is no money to be paid. At this point the vultures will circle and all these lenders, landlords and Cineplex will look to realise the maximum they can.

"Very significant dilution is not the same as ‘total wipeout’"

Unless you've bought in the last two week's you've pretty much been wiped out already right especially if you bought on the rise to £1.20.

I'd urge anyone who is unfamiliar with what happens in insolvency proceeding to look at incumbent shareholders when companies have to attempt to satisfy their creditors in this scenario. Even with the big names that have been mentioned try and research what happened to the shareholders who were holding the baby when time was initially called.

Quiggers - I agree. At the point of insolvency the board are not really in control of the company and it's against the law to continue trading when this is known (I'd have to check but I think it's a civil rather than criminal offence).

If they are considering C11 as an option then the company must be approaching this point.

"Andy111......where as the company said ch 11 will wipe out shareholders ?"

It's the consequence of 'comprehensive deleveraging transaction' combined with 'very significant dilution' and that was before they put the C11 on the table.

It's financial speak for 'we fooked' and hence the drop to 2p.

C11 basically allows the company to re-organise the debts and the likelihood is this will be at the expense of current investors - they literally do not have any other hand to play. I seriously doubt the market is there in the current macro environment for any kind of 'Hail Mary' raise.

Penta - No one will be buying CINE. The chapter 11 protection will allow time to work out how much of the company they need to give to the creditors in order for them to take a haircut on the debt.

If landlords are already serving winding up orders and the company is approaching insolvency then this could happen pretty fast. Such negotiations with creditors have likely been going on for a very long time and if chapter 11 is on the table you would think that they have reached or be reaching their course.

I’ll go 9:1.

So 90% haircut.

Hi Poor - hope you are well.

I think shorting is the preserve of the sophisticated investor and the iis, maybe the odd PI with CFDs (which will lot affect the share price). I’d be surprised if many on these board have actual proper shorts.

The only genuine shorter I think I can recall is seadoc on Syme but he seemed quite intelligent like he knew what he was going on about. I think even he was spread betting.

‘ Oh I agree. Cineplex couldn’t give a damn about Cineworld. But Cineplex would be last in line for any kind of payment in bankruptcy proceedings. Therefore it is in their best interests to negotiate a lower settlement offer which would be more than anything they would get if Cineworld was pushed into bankruptcy.’

You could argue that Cineplex have more to gain by Cineworld going under and reducing competition.

Hi Hexam - I’d love it if it could be turned around.

I think the problem here is there is no clear obvious roadmap which would let investors now partake in that. All future benefits will most likely accrue to the new majority holders post deleveraging/reorganisation.

I was having a look at the US and UK attendances earlier out of interest and from the stats that I saw (which couldn’t be verified) that hasn’t been any real solid growth this century in either markets.

So I think it’s a case of hoping to get back to what things were, which also explains why Mooky grew the business through acquisition rather than having a decent growth roadmap.

The problem is the low interests rates and constant supply of free money has created the macro environment we find ourselves in today.

Interests rates are still low - a reasonable interest rate is healthy for an economy.

The problem is the cost of housing and the leverage people have took on to get on the housing ladder.