Member Info for WolfofWarks

'Deals signed by studios with the theatres agreeing 45 exclusivity. Gave them 50% of the box office. Previously each film’s box office was negotiated, but generally studios took 60% of the box office to theatres 40%. But cinemas make profit on popcorn and drinks.
These deals will not be open to new owners of ROW, if this even happens.'

On what basis? Surely they both need to live together and it should be a mutual partnership.

No journalist ever reveals there sources. No one would speak to them and their careers would be dead in the water.

Yes plus there’s an article from the FT that has previously done the rounds which references filings within their family trust structure which has secured their holdings against family loans.

‘ But less even less to any buyers, as studios will not offer them 50% of the box office. They would be lucky to get 40% off the studios.’

Ian - how does this work? How would the studios command what % of the box office the theatres get when it’s the theatres who receive the money?

Cineworld do not share 50% of the box office revenue now. Their margin is about 60% and that’s after all kinds of costs have been deducted plus other additional revenue.

I think your talking boll ocks as usual.

Ian - This is a different credibility of the sources leaking now though - FT and Bloomberg. These are the big boys of financial journalism and they got the pre C11 rumours spot on in all fairness.

Netflix films are largely sh it so I am not surprised.

weak sterling earnings into a strong dollar. it's exactly the same as the Apple example - which was global earnings being converted into dollars for presentational purposes in the accounts.

Patience - what about the unsecured creditors?

'Valid point Wolf (again). But; why would they do a rights offering if the company is already 100% owned by the lenders?

Whether its a loan or fresh capital via offerings its 2 times the same thing if the beneficiaries are the same unless they wanna reshuffle among lenders.'

The most likely answer here is that it's probably the quickest route to working capital and they most likely have lenders who are taking on the equity who are willing to provide this working capital by the nature of them being high financiers, without going to the credit markets.

It also allows those who are willing lenders to increase their stake in this business while diluting those who do not want to take part.

What's interesting me at this point is how the ad hoc group emerge from this in terms of whom own the new company. I can't believe the Newco will have a consortium of twenty odd lenders at the helm. They must have their own negotiation and settlement going on between them which also has to be concluded.

'and the nuance there is that rights offering (according to the internet) is for EXISTING shareholder. So, could mean we are not completely dead'

The rights offering will be in relation to the new Newco shares.

You can see an outline of the article on Reuters if you google the headline.

Like like the ex-Regal CFO is the favourite to take over.

Hi Waffen. They have various hedging in place in terms of the borrowing.

You can't really hedge for the financial accounts though as it's simply a paper exercise converting all the non-US earnings into the USD reporting currency.

A strong dollar lowers the value in USD of overseas earnings. For example, at the last quarter Apple had 10%+ growth in most of its global regions at a local currency level but showed under 10% growth for the group once they had been converted into USD.

If CW funds the global business from USD it worth have done very well last year in respect of purchasing power.

'I’m not sure if that’s good or bad. Has Mooky has a vast amount of shares, he might be the only reason they wouldn’t dilute shares but if he’s gone, they might have the power to screw us all over.'

Those shares are about to wiped out though. It's his CEO service contract that is still giving him a seat at the table at the moment.

I can never listen to the audio on my MacBook

Hi Penta - I would have thought the fineries of the court process regarding the plan will have to play out before the company updates holders.

Plus I don't think the lawyer is promoting in the news. I assume these statements have been taken from the court hearing which is public.

'@wolf are you short ?
Sp risen last couple of days are you worried ?
NG1'

Yes absolutely crapping myself over your imaginary short :)

10p well earned there.

Hi Penta - these are not banks though. They are investment houses, hedge funds, etc. They are the big boys. The problem with waiting for the future to overturn is that the bills still have to paid in-between.

Hi Penta - I think the problem is that the lenders have been supportive here for three years now and it came to the end of the road once they finally ran out of cash and then started the C11 proceedings.

I think the nail in the coffin was the initial priming facility that was put in place which gave those senior lenders ultimate power in terms of covenants and made any further refinance after then practically impossible.

They knew what they were doing and this is the inevitable outcome once the recovery didn’t happen.

Hi hexam - i was thinking more the pre c-11 because any other sundry creditors should be paid from the dip.

Hi hexam

How much is the debt with the unsecured creditors?

I thought the $6bn was all in and then more if you include long term leases.