Member Info for WolfofWarks

Near term liquity issues + comprehensive deleveraging transaction + very significant dilution + exploration of chapter 11 and other such protections = cash is about to run out.

Don’t kid yourselves otherwise folks. You don’t need to be Warren Buffet to figure out what is going on here.

It’s not cinema vs streaming.

It’s cinema vs streaming vs cheap dinning vs escape rooms, etc, etc, etc.

When the bankruptcy comes believe me they will be counting the lease liabilities.

They matter hence why they are now capitalised on the balance sheet and not accepted as off balance sheet finance no more.

When the plug gets pulled it’s yanked out fast.

B4gpiperinvestor - EBITDA doesn’t include the lease payments though so a large outgoing missing. On the cash flow statement in annual report depreciation and amortisation is over £500m.

They report on EBITDAl to take into account lease payments but I can’t find the actual reported figure in the report although only had a quick skim through.

Actually the business isn’t profitable and has failed to demonstrate sufficient profitability. It’s got to recover first amongst huge competition for those leisure dollars. The fundamentals are not strong.

The current share price is irrelevant as there won’t be a placing. What will matter to the creditors is the future enterprise value of the less indebted company. This will also dictate whether any further liquidity is out on the table.

Using Vue as an example it got taken over by its lenders and the original shareholders then exited the company.

So the company continues, the original shareholders get decimated and the new owners got to carry in debt free with a cash injection.

If he’s broken a covenant and has no liquidity then he’s not really in the driving seat here.

Cinema is great when it’s empty and you can immerse yourself in a decent film.

The problem is there hadn’t been any decent films for 15 years unless you like Star Wars, Marvel or James Bond.

Hexam is right. Leases are classed at right of use assets and are capitalised on the balance sheet at their discounted value which is then depreciated and the interest element of the finance charge is would down under interest paid for the duration of the lease.

So does not form part of EBITDA.

‘ Wolf, cine can’t really offer anything that the creditors will find palatable. This 38 million mktcap has nothing, other than let it continue so it can pay back its debt. Putting it bluntly and my favourite scenario, they will slap them with a little punishment and lend them some more money.’]
A debt free CINE is worth more than £38m. Creditors forgo their debt, they take most of the equity and CINE goes forward to try and revive their recovery plan. Creditors have taken a huge haircut but have a chance of recovering something in the new business going forward. That’s if they are even interested in holding what would be a significant stake in the company.

Melonhead - by total loss I was referring to the debt holders if they don’t carry out the D2E swap and CINE goes bust.

‘ They will have to give the creditors an offer they find palatable - which will basically be most of the equity with the creditors taking a big haircut and then enjoying potentially the prosperity of the new streamlined debt reduced CINE.

At the minute as things stand they are looking at total loss.’

"No lender will accept 10p to the £1"

That's what happens in these situations though.

They will have to give the creditors an offer they find palatable - which will basically be most of the equity with the creditors taking a big haircut and then enjoying potentially the prosperity of the new streamlined debt reduced CINE.

At the minute as things stand they are looking at total loss.

Haha I guess I'm still struggling after you said yesterday that it won't go under because it will soon be Christmas :)

"Jtan, imagine they restructure the debt and I do 10 bags instantly"

Poor - you'll probably need to do 10 bags just to get to you initial investment once you have been diluted.

"They are not looking to get rid of all debt! They are looking to refinance and get through the next 12 months as things are going back to some kind of normality!"

Thats's not true - they are looking to 'deleverage' the balance sheet. Which means severely reduce the debt (comprehensive was the word I think they used) by a very significant dilution of shareholders.

The company has told you this is going to happen and folk still don't seem to want to believe.

Luckily I am in both :)

Kallu's thesis has been greatly aided by the macro economics rather than him being some sort of genius.

The trend is very much still towards online, I mean for men in your average market town there are barely any shops to browse in.