Eros Media 26 Discussion Threads

[spectoacc] 19/8/2021 08:55

Lol indeed. Only now they've been found out. But surprised that leaves the market giving the bonds a 2/3rd's chance of redemption.

[cc2014] 19/8/2021 08:44

It doesn't matter whether there is any cash down the back of the sofa, only that people believe there is cash down the back of the sofa.

Which appears to have been the play all along...

[spectoacc] 19/8/2021 08:27

Still going up. Not been following it closely, but presumably an extension kicks the can down the road long enough for....what? Eros to discover some cash down the back of the sofa?

[boris the huge] 18/8/2021 21:44

Maybe it’s a hitathon between the market markers

[mokhan2] 18/8/2021 18:12

I wonder about these 10K trades that have been going through regularly since the bonds crashed recently. Definitely not retail.

[pyueck] 12/8/2021 15:18

Yes, selling at a loss is often painful, but may turn out to be the best outcome. If somebody has held since the issue in 2014, in cash terms with the interest and 56p in the £ back you wouldn't have lost much.

[dagsteeth] 12/8/2021 15:05

The only remarkable thing left in this sorry mess is that the market will still give you 55p for something which I think is worthless.

I have followed my own advice!

[grahamg8] 12/8/2021 07:46

pyueck, we would not just be negotiating with Eros but also with JP Morgan. They do have the upper hand because their money is secured and so they can let Eros go bust and still get paid out (almost certainly). We don't know what will be left of the carcass once the top predators have had their fill. Try to squeeze too hard and JPM just walk off. An increased coupon in exchange for 18m later payment is a reasonable deal. So the real question is will ErosSTX be profitable enough over that time to repay us, or will they be in an even worse financial position?

[rob the slob] 12/8/2021 00:01

Email Mark Taber for advice. @marktaber_FII [e-mail]

[pyueck] 11/8/2021 21:38

If retail bond holders don’t approve this then Eros stx is probably not a going concern. We have negotiating position and should force their hand.

[grahamg8] 11/8/2021 19:57

Two words: Secured creditor.

[pyueck] 11/8/2021 17:54

Graham, why should JP Morgan get paid out and we don't. We should group together and send a list of demands in order for us to approve this or we will vote no on mass:

a) Retail bondholders get paid out on the proceeds from film sales in proportion with JP Morgan
b) Retail bondholders get paid an interest rate in line with the % received from JP Morgan
c) The Lulla family members have no more involvement in the company.

Why should JP Morgan get the spoils and we get the leftovers. We can screw over JP Morgan as much as they can screw us, but we need to work together.

[grahamg8] 11/8/2021 17:44

Squeaky bum time all round. If the bond holders don't sign off on this then JP Morgan won't extend their loan and Eros goes under. With no financials and an internal investigation in progress the bond holders are being asked to believe that the company will survive long enough to payout in 2023. The positive spin being presented is that the STX film library can be sold at a high enough price to pay off JP Morgan and the mezzanine finance. Well they would say that, and we have absolutely no way of telling if it is realistic. Then enough profits or other assets have to be found and turned into cash to raise our £50m in 20 months time.

Far too racey for me. Sold most of my bonds and kept a few as gambling chips.

[pokerperson] 11/8/2021 12:54

Thanks peachy. Nicely sidelined until there’s nothing left

[peachy7] 11/8/2021 12:17

The proposals extend the bond from 15 October 2021 to 15 April 2023.

[mdanese] 10/8/2021 20:15

Bonds of India-based entertainment company ErosSTX Global Corp. have fallen by about 40 points to be quoted in the 47-52 range after yesterday’s announcement that the group had made an appeal to extend the deadline for filing its 2021 annual report, sources told Reorg.

ErosSTX said in its announcement that it is exploring restructuring options for its £50 million 6.5% U.K. retail bond maturing Oct. 15 and $150 million JPMorgan asset-backed credit facility maturing Oct. 7: hxxps://reorg.com/erosstx-bonds/

[pokerperson] 10/8/2021 17:06

I think you are missing what is a technical point

The entity which issued the bonds has no assets just investments in subsidiaries. The assets and the secured debt sits in the subsidiaries. All of India is ringfenced for Indian creditors. So topco where the bond resides only gets any cash remitted up to it after every secured and Indian unsecured creditor has been paid in full. None of us know how much cash there actually is since all the receivables seem to be fiction. My point therefore is that it is pure hope value that there will be sufficient monetisation of assets in a distressed sale for anything to end up back in topco to satisfy the retail bond.

We can all take our own view as to whether assets will be greater than liabilities and don’t forget the millions currently being spent in restructuring and refinancing fees and that’s even before insolvency fees. 56cents in the dollar seems optimistic to me which is why I am likely to bail.

However what you can’t ignore is the waterfall structure for the cash and why our bond is so far at the bottom of the heap and why triggering this extension now simply negates the need to even consult with us as the company gets carved up between its other creditors

Over the last 5 days the market has shown it hasn’t got a clue what fair value is but in every insolvency type situation I have seen, let alone one in which there appears to be fraud, related parties, opaque corporate structures, a bet to zero is much more likely than a bet to 100. The market usually figures it out in the end but generally way later than it should for bonds or distressed equity.

Ps even if they do sell their entire library for more than the total debts, in the absence of a new financing they are then running a unfunded business with no assets which means they will never make profits or generate cash to repay our bond which they have clearly said they won’t pay back now even if they have excess cash. And they will still have a hefty wage bill which will continue to rank above our bond

I’m sorry, it’s curtains, the banks will get paid off out of STX and the promoters will find a way to walk off with whatever they can in India. Topco shareholders and bond holders will get nothing

[aamhager] 10/8/2021 16:49

Not sure why you are saying i am incorrect. You agree that the bond is issued by the combined company which is what I said. The point is we have a claim on STX assets or whatever is left of them after paying the secured debt. If they can't honor the bond payment (whether extended or not) they they have no choice but go bankrupt.
Personally, I think they have enough assets, they recently paid 75mUSD for a single movie "Greenland". They are trying to monetise their whole library of 46 movies

[pokerperson] 10/8/2021 16:33

Sadly you are incorrect.

Eros International Plc changed its name to Eros STX Global Corporation pursuant to the July 2020 merger with STX Entertainment, which integrated as a wholly owned subsidiary, merging two international media and entertainment groups

The bond issuing company has merely changed its name and the assets are in various subsidiaries while the bond has been issued by topco in the Isle of Man. The prospectus is clear that not only is the bond unsecured but it is subordinate to all unsecured creditors in all the Indian entities. No doubt these will include lots of related parties who no doubt have siphoned off every bit of cash

Stx is a merged subsidiary and will be ringfenced by its banks so no cash will escape from there.

Not scaremongering but there will be zero cash to pass up to topco where the bond resides.

[aamhager] 10/8/2021 15:56

The retail bond is definitely the responsibility of the combined group. EROS international PLC does not exist anymore.

Their PR on Aug 3rd confirms this, actually they hinted at an extension.

[pokerperson] 10/8/2021 15:40

Aamhager.

Sadly there are no cross guarantees in the retail bond documentation, I checked back to the original filings, so I am afraid we are dealing with Eros and I suspect that Stx can just let it go

Ps bank debt is only ahead if it is secured, which this is… not there are anywhere enough assets to provide security and that’s before one even considers the weekly cash burn.

Make no mistake the business is currently being run exclusively to maximise the return to JP Morgan and it they who are calling all the shots

[aamhager] 10/8/2021 15:28

Well they failed the covenants and are in technical default, so all debt become due. In general bank debt always is ahead of unsecured debt.

Not sure how to vote myself but I am glad we are dealing with STX which seems to have some assets at least. If it was EROS it would have been 100% bankruptcy with little recovery.

[pokerperson] 10/8/2021 15:19

Aamhager. Not the mezzannine which gets accelerated through this consent before ours.

More to the point, if we cave, we have no leverage through the current breach to trigger an insolvency process which means we can be fully ignored as they go through the debt restructure with the secured creditors

[aamhager] 10/8/2021 14:34

The bank debt is secured and expires before our bonds