Happy New Year all
Not got a lot of time to get involved in this right now. Its my busiest month of the year with the self assessment deadline. So will just make a couple of statements that are based on the audited accounts that have been filed.
Bear in mind that the owners are specialists in debt. Also no debt was ever actually purchased only shares or assets. Group companies can legally move assets, losses, liabilities around the internal group if they see fit and the paperwork is correct - sometimes it will require the permission of a 3rd party creditor
- there is no evidence of management fees being taken outside of the group companies. The only management fees were between CCFC ltd (paid) and CCFC H Ltd (received) and that meant the monies stayed within the group.
- any management fees paid to 3rd parties including SISU or ARVO would be payments to a related party and should have been disclosed under the Companies Act in the notes to the accounts
- Interest has either been paid by the group to ARVO, The Arley Group (Ranson), or to the purchasers of Prozone who advanced funds to the SBS&L group
- the accumulated total amount "invested" by SISU investors goes as follows
2008 11.03m
2009 23.73m
2010 24.1m
2011 29.7m
2012 28.6m
2013 28.6m
2014 28.6m
- SISU investors have not put any more money in since 2012. According to the accounts they did not accrue any interest until 2012. That's accrue it was rolled up as a creditor/liability not physically paid out.
- It would seem that between 2011 and 2012 what they were owed decreased by £1.125m. So something has been repaid following sale of Prozone it would seem
by 31/05/13 ARVO had made loans to the Group of 13.3m. The following year some of this and the accrued interest was converted in to some of the preference shares that were issued. There is no reason why ARVO should not charge interest for the use of its money. It is not a substitute for management charges - for one thing ARVO are not involved in the management. Is ARVO 100% owned by SISU Capital who knows. The interest rate would appear to be well over 10% but the security for the money lent is pretty poor - interest rates reflect the security
At 31/05/2014 external debt for the group (it is the external debt that is important not what Otium owes SBS&L or even the shares SBS&L owns in Otium) stood at 36.7m plus preference shares of 14.2m. There were a lot more preference shares issued but the balance were issued internally from Otium to SBS&L. The preference shares are not voting capital but in effect a type of debt. SBS&L group is in the hole for over £50m. As otium are the only trading element then effectively that's Otium's hole
Got to be careful with some terminology too. Otium is trading within its cash flow means - cash neutral. that means it spends the cash it receives. That is not necessarily the same as saying the accounts are at breakeven. For instance the £1m in interest each year is being rolled up in to creditors and not actually paid out (up till 31/05/14) so no cash spent on it but it will appear as a cost on the accounts
Losses of the group
2008 3.9m
2009 8.2m
2010 5.8m
2011 16.1m
2012 4.0m
2013 7.2m
2014 8.3m
equates in total to the "hole" the group are in
There has been a lot of realignment going on in the accounts. All perfectly legal if somewhat difficult to keep a track of. Bottom line however is that CCFC or Otium or SBS&L or whatever you like to call it all is still a basket case
Did the losses from CCFC H need to be transferred to Otium? Personally I don't see why and I have an even harder time believing the FL insisted on it.... but that's just my opinion it could be the case that they did. But why laden a new set up with old historical debt that really was just figures on paper? Makes it harder to sell on surely?
I think saying the Ricoh is worth £48.5m is misleading. The long lease is worth 48.5m with Wasps owning it at the date of the valuation in the opinion of expert professional valuers for the purposes of providing security for a bond issue. It is not the sale value of the lease. Nor is it the value of the shares in ACL before the sale to Wasps. The lease forms part of the assets owned by ACL but the value of ACL shares (effectively the Ricoh) must also include all of the known liabilities of ACL too plus an assessment of its future as it stood without a major long term tenant of the stadium - when sold by CCC/AEGC. The value of ACL now is totally different to what it was before the sale to Wasps. Like it or not what went on with CCFC depressed the value and left ACL vulnerable and the opportunity was missed by the CCFC owners - I think they overplayed their hand badly
Hope that helps
