Cineworld Share Discussion Threads

[jaknife] 05/7/2023 12:48

PWhite73,

"However administration is a legal process that requires the company follows the law. One of the laws is that an independent valuation must be made of the company's assets to ensure all stakeholders are treated fairly at the beginning, during and at the end of the administration process."

I am afraid that you are mistake, the law that you claim above simply does not exist.

Feel free to prove otherwise (ie point to where this supposed law is on the statute book) but you won't be able to because you have fundamentally misunderstood how the administration process works in the UK.

JakNife

[pwhite73] 05/7/2023 12:27

LTHTRUST - "Shareholders have been told that they were likely to receive NOTHING for a long time."

The company can say whatever it likes just as all AIM companies claim dilutions are in the best interest of the shareholders.

However administration is a legal process that requires the company follows the law. One of the laws is that an independent valuation must be made of the company's assets to ensure all stakeholders are treated fairly at the beginning, during and at the end of the administration process.

For the purpose of UK administration Cineworld has not had an independent valuation of its assets. I have shown you PJT Partners were in bed with CINE two years before C11.

[lthtrust] 05/7/2023 11:51

Cineworld had negative shareholder equity before the need for chapter 11 protection (or administration). Shareholders have been told that they were likely to receive NOTHING for a long time. The problem being that cineworld's debts way exceed it's tangible assets. This stems from Cineworld's leasehold business model. Cineworld has $6 BILLION of secured debt and plenty of unsecured debt. This is from February 2023:
"The world’s second-largest theater chain, which owns Regal Cinemas in the US, has struggled to find buyers for the whole company in recent months. It has received no bids that come close to covering Cineworld’s $6 billion in outstanding secured debt, Sussberg said. ".

[williamcooper104] 05/7/2023 11:35

The listed entity is a going concern and will be left in funds to wind itself down The admin process creates the (temporary) going concern as it stays creditors actions

[williamcooper104] 05/7/2023 11:22

Sorry all - wrong thread

[williamcooper104] 05/7/2023 11:18

Bbox sold a box - a big one Yield - 4 percent Nice (It's 20 years - but still v good yield) Will go back into the ground at up to double the yield Very nice And that's why I like BBOX

[pwhite73] 05/7/2023 11:06

LTHTRUST - "Some people are so stupid they believe that because a company receives DIP funding whilst under chapter 11 bankruptcy protection, the said company is no longer bankrupt."

That's correct the company is no longer bankrupt once it receives DIP financing. The US court has to approve DIP financing but only if it deems the company will be taken out of bankruptcy when recapitalised. That's exactly what's happened to CINE.

However in this case a bit of trickery is required to wrestle the company from its rightful owners the shareholders. The trickery here is to argue the assets, customers and staff have been saved but the PLC hasn't. This trick is not normally required in UK administration because the Plc is put into administration first and then the company or new company recapitalised. Here its the other way round.

[pwhite73] 05/7/2023 10:44

milliIQ - "cine is not a going concern."

It is a criminal offence for a company to trade whilst insolvent. If CINE were not a going concern the FCA would not permit the shares to be traded on the London Stock Exchange.

[cambridge130] 05/7/2023 10:40

Cine shares about to go to zero and investors will lose the lot.

[pwhite73] 05/7/2023 10:07

loglorry1 - All valuations have to be paid for so paying for the valuation is not the issue here. However insolvency law in this country does stipulate that the valuation company is independent of the debtors, creditors, shareholders and all stakeholders.

PJT Partners are not independent of CINE they were partnered with CINE two years before it filed for C11.



27 October 2020 - "The world's second-biggest cinema chain Cineworld has brought in a team of consultants from AlixPartners and PJT Partners to help it come through the most challenging period in its 25-year history."

[bbmsionlypostafter mk2] 05/7/2023 09:59

Anyone reading PW73's posts should bear this one posted today from a VRS thread in mind if you are considering following any of his investment advice.

The loss from 180p to 1.8p is 90% but this loss is the same as from 1.8p to 0.18p. From 180p to 1.8p just looks far worse.

[loglorry1] 05/7/2023 09:53

LOL PWhite!

So you want the bondholder group to effectively pay the $150K for another valuation rather than accept the one they have already paid for becuase you don't think it was independent because the bondholder group paid for it?

You criticise the one they paid for as not being independent (cos they paid for it) and then ask them to pay for another one!

[lthtrust] 05/7/2023 09:44

As the judge said Cineworld are currently "hopelessly insolvent". Some people are so stupid they believe that because a company receives DIP funding whilst under chapter 11 bankruptcy protection, the said company is no longer bankrupt.

[pwhite73] 04/7/2023 23:48

JakNife - "1. The judge would have happily allowed a third party valuation, however, the issue was that the shareholder group wanted Cineworld to pay $150,000 for that third party valuation."

tron343 - The above is simply not true. Cineworld had already paid out £30 million in legal fees does anyone really believe they were concerned about a miserly £150k to get the C11 over the line. The judge was never going to allow an independent valuation or equity committee after nine months of deliberations.

JakNife - "A. The judge accept the PJT valuation, which if anything was on the optimistic side, as evidenced by the fact that no one was prepared to bid an amount that was close to the PJT valuation."

tron343 - Cineworld never revealed what any of the bids were or who they were from. So there is not a shred of evidence to support the above statement.

The only hope now is a refusal of or an objection to the administration order.

[monte1] 04/7/2023 19:02

What influence do shorters have on the ‘business value’ Werethereisawill?

[werethereisawill] 04/7/2023 18:33

B the business value would need to be double
Shorters are making sure this doesn’t happen

[jaknife] 04/7/2023 17:55

tron343,

"Are there any legal issues / challenges that can be raised to challenge CINE in the UK courts? Shocked that the USA judge would not even allow a third party valuation."

That isn't an accurate summary of the facts.

1. The judge would have happily allowed a third party valuation, however, the issue was that the shareholder group wanted Cineworld to pay $150,000 for that third party valuation.

2. The shareholder group had sent in some rough numbers to justify their wild claim that a third party valuation would produce a figure that was materially higher than the valuation that PJT Partners had produced. However, those rough numbers were fundamentally flawed as they confused pre and post rent EBITDA and then applied the wrong market multiple.

3. PJT Partners had submitted a valuation to the court which complied with all the necessary Daubert rules and had been accepted by all the parties involved including creditors that were going to receive payments of less than 1% of their claim value.

4. PJT Partners' EV valuation for the business was between $2.8bn to $3.4bn.

5. Regardless of the PJT Partners' EV valuation the "Gold Standard" in US Ch 11 cases for valuations is to go to the market and invite bids. The assets of Cineworld were marketed for sale and over 40 bids were received, however, none of those bids came close to PJT's valuation.

6. Cineworld Group's liabilities were of the order of "$7.9 billion to $8.6 billion" as at 16th June.

In the circumstances it was perfectly reasonable that:

A. The judge accept the PJT valuation, which if anything was on the optimistic side, as evidenced by the fact that no one was prepared to bid an amount that was close to the PJT valuation.

B. The judge conclude that Cineworld was "Hopelessly Insolvent" given that the business value would need to more than double before shareholders might get close to getting paid anything.

C. The judge denied the right for the shareholder group to form a formal shareholder committee, which would then have been able to have its legal fees met by Cineworld.

None of this would have stopped the shareholder group obtaining a third party valuation, it's just that they would have had to pay the $150k to get it themselves.

JakNife

[pwhite73] 04/7/2023 14:06

tron343 - Any creditor, shareholder or stakeholder can appeal against an administration order.

[tron343] 04/7/2023 13:32

Are there any legal issues / challenges that can be raised to challenge CINE in the UK courts? Shocked that the USA judge would not even allow a third party valuation.

[millennialinvestor] 04/7/2023 12:23

As hopeless as your whining.

[werethereisawill] 04/7/2023 11:35

Mill
Hopelessly insolvent ? Yet made a profit March and April! Most probably May and June too and every month for the rest of the year !? Hopelessly ?

[millennialinvestor] 04/7/2023 10:21

But they are hopelessly insolvent otherwise they wouldn't be in this mess. duh.