Cineplex convertible | General financial discussion | Discussion forum

For me, it's an "avoid," only because I do fear about the long-term impacts of COVID-19 on the film production, distribution, and exhibition industries, and because of my experience with being exuberant on the stability of the yellow pages business. Yellow Media Limited, or whatever it's called now, was subsequently recapitalized outside of CCAA under a normal CBCA process, that resulted in existing common shareholders receiving 1 share for every 250 shares they held. I held 265 shares, and because there was no fractional payout on the other 15 shares, it was effectively a 1-for-265 reverse share split for me. Suffice it to say, it's been my worst performing investment. I still hold it because it's worth less than the $9.99 trading commission (it would cost me more money to sell it).

You're asking about a convertible debenture in Cineplex; my example is still relevant because YLO.UN debentureholders still took major haircuts and losses when their debentures were converted into common stock in the above-quoted recapitalization transaction.

Cheers,
Doug

Cineplex is basically junk bonds and 4 years at 5.75% simply not enuf premium to justify the risk in my mind.
I rather buy some Cad banks share to earn 5-6% which I consider much safer (assume you can wait it out if it trades lower and takes longer to recover).

Never believe what management says, unless they say their survival is in question, thats when you can trust it 100%.

As far as I know, brokerages will only charge commission equal to proceeds. Was the case for some penny stock spouse held.

Example: Net proceeds $4.13. Commission $4.13.

Have to get crap like that off the books.

AltaRed said
As far as I know, brokerages will only charge commission equal to proceeds. Was the case for some penny stock spouse held.

Example: Net proceeds $4.13. Commission $4.13.

Have to get crap like that off the books.  

Oh, that'd be alright if they still did that, thanks @AltaRed. 🙂

At least they don't make you cough up more money to cover the shortfall in the trading commission. 😛

Cheers,
Doug

Bud said
Cineplex Cineplex convertible debenture/bond matures 2025 pays 5.75% annual … Is the collateral secure? they own some real estate undervalued?

There's no collateral now or in the future for the 5.75% convertible unsecured subordinated debentures. Even trade debt (like their advertising bills) have priority:

Rank and Subordination

The Debentures will be direct, subordinated, unsecured obligations of the Company and will rank equally with one another and subordinate to all liabilities of the Company (including all trade debt), except liabilities which by their terms rank in right of payment equally with or subordinate to the Debentures, and will rank pari passu to all future unsecured subordinated debentures issued by the Company. The Indenture setting out the terms of the Debentures will not restrict the Company or its subsidiaries from incurring additional indebtedness or from mortgaging, pledging or charging its properties to secure any indebtedness or liabilities.

Norman1 said

Bud said
Cineplex Cineplex convertible debenture/bond matures 2025 pays 5.75% annual … Is the collateral secure? they own some real estate undervalued?

There's no collateral now or in the future for the 5.75% convertible unsecured subordinated debentures. Even trade debt (like their advertising bills) have priority:

Rank and Subordination

The Debentures will be direct, subordinated, unsecured obligations of the Company and will rank equally with one another and subordinate to all liabilities of the Company (including all trade debt), except liabilities which by their terms rank in right of payment equally with or subordinate to the Debentures, and will rank pari passu to all future unsecured subordinated debentures issued by the Company. The Indenture setting out the terms of the Debentures will not restrict the Company or its subsidiaries from incurring additional indebtedness or from mortgaging, pledging or charging its properties to secure any indebtedness or liabilities.

  

Thanks, Norman. That's useful information for contextualizing terms like trade debt, too.

Also, regarding Bud's original question on Cineplex' real estate, I suspect most of it is leased, as is commonly the case among movie theatre rental chains (at least in Canada).

The Empire theatres, which were sold, principally, to Cineplex and Landmark Cinemas may be an exception to this in that they may have been owned by the theatre chain. I don't see them listed on the Crombie REIT website, so it's possible Cineplex and Landmark may have some owned real estate, but in any case, they would require major redevelopment. (The Paramount theatre in downtown Kelowna was, sadly, closed a number of years ago, sold, and repurposed into (a) a downtown Tim Horton's franchise and (b) a craft brewery. The Uptown theatre a few blocks over closed many years before that and was leased as, among other things, a type of church, a spirital healing centre, and some other therapeutic centre until it was demolished late last year. No idea what's planned for that spot now; probably condos.)

Cheers,
Doug

Norman1 said

Londonguy said

It's not about giving something away for free, it's about closing out the trade so you can make use of the tax loss, which can be worth a lot. And if the pig has been delisted (highly likely), there's no way to sell it conventionally, so the donation process is a substitute mechanism that lets you formalize the disposition and thereby bulletproof your tax loss claim 

That's not necessary. One can file a special deemed disposition election under Income Tax Act subsection 50(1) once the company has filed for bankruptcy or insolvency. Taxtips.ca: Worthless Shares or Debt has the details.  

Maybe so, but just clicking on "donate your shareholding" was a lot easier

Bud said
I bet the feds will throw some candy at them and Indigo under the guise of "canadian content" if they run short.  

Dont think JT's purse string is THAT loose.