Fugazi (8 Viewers)

[chiefdave]

commercial terms to protect the council’s investment in ACL

Interesting point that leads to a couple of questions:

1) could Wasps not have taken out a commercial loan to repay the council thus avoiding any accusations of CCC providing a loan in dubious circumstances.

2) did the council protect their investment or have they in fact lost money by selling to Wasps at such a low price.

 

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[Jack Griffin]

Interesting point that leads to a couple of questions:

1) could Wasps not have taken out a commercial loan to repay the council thus avoiding any accusations of CCC providing a loan in dubious circumstances.

2) did the council protect their investment or have they in fact lost money by selling to Wasps at such a low price.

You'll have to wait for the next court case to find out.

 

[skybluetony176]

You'll have to wait for the next court case to find out.

Depends which one comes first. The appeal or the new one.

 

[albatross]

Interesting point that leads to a couple of questions:

1) could Wasps not have taken out a commercial loan to repay the council thus avoiding any accusations of CCC providing a loan in dubious circumstances.

2) did the council protect their investment or have they in fact lost money by selling to Wasps at such a low price.

The answers to your points

1) Yes they could have chosen to do this and they are free to do this at any time if it makes sense for their business model but it may be good business for both parties. This is what these new papers from SISU concern, they are trying to prove that it is the same loan so the the JR can continue.

2) The council (and anyone for that matter) can only sell an asset for the market value at that time. The same way house prices go up and down. the Value of ACL had been eroded from previous valuations and offers a they happened in the past. The council may well have lost money but they could not sell their share holding in ACL at a price that was not what could be considered roughly the market price.

 

[chiefdave]

The council (and anyone for that matter) can only sell an asset for the market value at that time. The same way house prices go up and down. the Value of ACL had been eroded from previous valuations and offers a they happened in the past. The council may well have lost money but they could not sell their share holding in ACL at a price that was not what could be considered roughly the market price.

But again if that is correct the council have not been truthful when talking about the health of ACL. Remember the outrage every time Fisher said anything about ACL needing CCFC or ACL not performing as well as was being made out. Seems he was right. I never in a million years thought I'd be saying something Fisher said was right but its looking like thats the case.

 

[albatross]

But again if that is correct the council have not been truthful when talking about the health of ACL. Remember the outrage every time Fisher said anything about ACL needing CCFC or ACL not performing as well as was being made out. Seems he was right. I never in a million years thought I'd be saying something Fisher said was right but its looking like thats the case.

As i said previously, the accounts filed by ACL would have given an accurate picture on the date of filing. Many company ensure that their cash balance etc.. is at its best when the accounts due. It is a snap shot of the state of the company at that point in time. . The accounts show that they were making money and they would have had a business plan showing growth so that would be the line of ACL. So no lies just a positive outlook.


The basis for Mr Fishers claims ,as the judge pointed out in his findings, that it was the direct actions of the club that were designed to distress the business of ACL. If the revenues are down the net worth of the company come sale time would be less. His interest in promoting his point of view was to actively reduce what the market may view the value of ACL should somebody wish to purchase. They wanted to push it as close to zero as possible. Again no out and out lies but a point of view to promote their strategy.

 

[chiefdave]

As i said previously, the accounts filed by ACL would have given an accurate picture on the date of filing. Many company ensure that their cash balance etc.. is at its best when the accounts due. It is a snap shot of the state of the company at that point in time. . The accounts show that they were making money and they would have had a business plan showing growth so that would be the line of ACL. So no lies just a positive outlook.

Surely they would be accurate to the date the accounts cover not the date filed which can be months later. In fact checked at Companies House there are still no accounts filed that cover a period in which we weren't playing there so the same fact remains. CCC were claiming everything was fine with ACL while by your own admission the value of the company was in freefall, not usually a sign of a company doing well.

The basis for Mr Fishers claims ,as the judge pointed out in his findings, that it was the direct actions of the club that were designed to distress the business of ACL. If the revenues are down the net worth of the company come sale time would be less. His interest in promoting his point of view was to actively reduce what the market may view the value of ACL should somebody wish to purchase. They wanted to push it as close to zero as possible. Again no out and out lies but a point of view to promote their strategy.

But if what CCC were repeatedly stating was true why has the value of ACL dropped. You can't have it both ways, if CCC were being truthful they have sold at a price far below the true value, if you believe the amount Wasps have paid is correct then quite simply CCC have been far from truthful when claiming us not being at the Ricoh had little impact and the future was bright.

 

[martcov]

Grendel's first post was very good, from Grendel's point of view. They do know how to jump in and make a deal - our owners should have seen it coming ( or maybe they did, but are not bothered ). They have treated some people badly, but they may have Impressed more people - strategically good, moraly not so - but they are in the business of turning a Business round - like our owners. They just seem to do it more quickly and have started off better than our owners did. They are as honest as any other business dealing with money to be hidden from the country where you are supposed to pay your tax. They are probably just as honest as SISU.... The council is unnaminous in favour of this deal. We don't know why - yet - but I woud think legal firms will have covered the deal. Not one councillor voted against it. I am not sure all Grendel's council points are accurate, but why doesn't he give this to Simon as a letter to the editor and let's see if we can get some points confirmed - or denied? Or why don't some on here challenge their councillor on these points? I have no comment on the trust as I don't know enough about how it works. As to Gendel's view that people are revelling, I don't know any - except maybe Italia - but some people see why Wasps are here and say so, just to get called Wasps fans. Although after all the goings on, it obvious why they are here and where the primary blame lies. Wasps are a side effect not the main cause of our problems. They have only just got here. Let's keep our eyes on the instigators of the problem and where we are heading instead of worrying about morals in Rugby franchising which has nothing to do with our future ( hopefully ).

 

[albatross]

Surely they would be accurate to the date the accounts cover not the date filed which can be months later. In fact checked at Companies House there are still no accounts filed that cover a period in which we weren't playing there so the same fact remains. CCC were claiming everything was fine with ACL while by your own admission the value of the company was in freefall, not usually a sign of a company doing well.

Agreed regarding the accounting period which shows them in profit. The rest we can only guess without the accounts and is open to spin and suggestion from both sides. I have not said it was in free fall as we do not know what the trading figures were, however I have seen other posts today where previously figures of £25m were offered and at the same time £12m from SISU so given the comments from SISU at high court they valued the business at a figure considerably less than their previous offers. Hence their strategy and statements. I don't thing either CCC/ ACL or SISU ever talked specifics regarding the yet un-published accounts just in generalities i.e. the business is unsustainable, or its does not need the football club and it turns a profit. SISU by their actions wanted the bank to foreclose on the business. The Yorkshire bank would then have owned a football stadium with no team. it would have been theirs to sell as quickly as possible and the council would have got £0.

But if what CCC were repeatedly stating was true why has the value of ACL dropped. You can't have it both ways, if CCC were being truthful they have sold at a price far below the true value, if you believe the amount Wasps have paid is correct then quite simply CCC have been far from truthful when claiming us not being at the Ricoh had little impact and the future was bright.

The market price is what someone is willing to pay for it. (not what has been spent on it or what we would like to think its worth) WASPS offered £2.77 for ccc's share SISU offer roughly the same so by at least two points of reference the market said that a 50% stake in ACL was worth about £2.77 million in October 2014.

I suspect that the value on 22nd Dec is somewhat more than a couple of months ago that with a 100% owner, a rugby team and a football team in residence and two parties interested in ownership

 

[shy_tall_knight]

The loan what is its value and what are WASPS responsibilities to it, surely this is key in establishing the true value of the purchase price

 

[Grendel]

The loan what is its value and what are WASPS responsibilities to it, surely this is key in establishing the true value of the purchase price

So the Higgs share was worthless all along then?

 

[Sky Blue Harry H]

Some good points made on here, but .... it's a bit like when people who are fighting each other seem to cite historic injustices from 500 years before to state why it's the other sides fault, rather than sort out a resolution. We all know we're in a mess. Lots of people think more than one party are to blame. Our biggest problem is we need our owners to give us a ****ing clue as to what they intend to do about it and try to get us onside with it. If they can't do that, they will struggle to unite us as fans (or maybe they will, but against them, not with them).

 

[skybluetony176]

So the Higgs share was worthless all along then?

That must have been why SISU made a counter offer to the Wasps offer and a better one at that, according some.

 

[shy_tall_knight]

So the Higgs share was worthless all along then?

Your not answering my question, I genuinely don't know what the position is with the loan, in my understanding if they have paid £5.2m plus taken on responsibility for a £10m loan, then the total purchase price is £15.2m not just £5.2m, I'm not trying to score points just understand what WASPS have actually paid for a 250 year lease

 

[dongonzalos]

He said that made the decision to takeover Ricoh firm ACL an easy one - even if it did equate to roughly £20million after he paid ACL’s partners £2.77m each for their shares and took over a £14.4m loan from Coventry City Council.

http://www.coventrytelegraph.net/news/coventry-news/wasps-owner-reveals-motives-ricoh-8331444

 

[chiefdave]

Albatross, I have no idea why you are going to such great lengths to defend the council when they have just screwed the club you're supposed to support for decades to come. I mean I hate SISU as much as anyone but it doesn't mean I want to put the future of the club at risk just to annoy them.

Agreed regarding the accounting period which shows them in profit. The rest we can only guess without the accounts and is open to spin and suggestion from both sides.

It's not guesswork though, CCC and Higgs have clearly stated over and over again that their projections show ACLs business getting stronger and stronger. That shouldn't be plucked out of thin air it should be based on facts, some of which only they have access to as owners of the business.

I have not said it was in free fall as we do not know what the trading figures were, however I have seen other posts today where previously figures of £25m were offered and at the same time £12m from SISU so given the comments from SISU at high court they valued the business at a figure considerably less than their previous offers. Hence their strategy and statements. I don't thing either CCC/ ACL or SISU ever talked specifics regarding the yet un-published accounts just in generalities i.e. the business is unsustainable, or its does not need the football club and it turns a profit. SISU by their actions wanted the bank to foreclose on the business. The Yorkshire bank would then have owned a football stadium with no team. it would have been theirs to sell as quickly as possible and the council would have got £0.

I'd say if previous valuations were in the £12 - 25m range for ACL with 40 something years left on the lease but the value at the point Wasps purchased was under £6m with 250 years left of the lease the value has very much been in freefall. Remember we're not talking about the value when SISU were trying to distress ACL, the loan removed the distressing aspect.

The market price is what someone is willing to pay for it. (not what has been spent on it or what we would like to think its worth) WASPS offered £2.77 for ccc's share SISU offer roughly the same so by at least two points of reference the market said that a 50% stake in ACL was worth about £2.77 million in October 2014.

Not really, the market price is what someone is willing to accept. I don't think we can use SISU's offer as a basis. When there's only two bidders and you know what the other bidder has proposed you would be an absolute idiot to offer far more.

I suspect that the value on 22nd Dec is somewhat more than a couple of months ago that with a 100% owner, a rugby team and a football team in residence and two parties interested in ownership

But CCC would have know that would be the effect of the takeover by Wasps and should have accounted for that. If anything that made the value of ACL greater to Wasps than any other bidder. CCC would also have known that in the next few months ACL will receive a windfall thanks to the naming rights renewal, seems they didn't account for that either.

I really don't understand your refusal to even question the deal that has been done, and you're not along in that. I'm not even saying CCC have done something wrong just that there are questions to be asked and their refusal to give any detail and continually hide behind commercial confidentiality is cause for concern.

It seems people are so busy blaming SISU for everything they are prepared to complete ignore any possibility of anyone else being to blame.

 

[stupot07]

Your not answering my question, I genuinely don't know what the position is with the loan, in my understanding if they have paid £5.2m plus taken on responsibility for a £10m loan, then the total purchase price is £15.2m not just £5.2m, I'm not trying to score points just understand what WASPS have actually paid for a 250 year lease

Is the loan now with wasps or ACL? If it's with wasps they have responsibility, if it's still with ACL Ltd, then it's them (the stadium company) responsibility. Wasps are just the major share holders. The problem is, that the loan is built within ACL's operating costs, like any bill or standing order. That would have likely remained in ACL regardless of who took over. So then it boils down to upfront cash. And in upfront cash terms they paid around £5.5m.


Sent from my iPhone using Tapatalk - so please excuse any spelling or grammar errors

 

[chiefdave]

Your not answering my question, I genuinely don't know what the position is with the loan, in my understanding if they have paid £5.2m plus taken on responsibility for a £10m loan, then the total purchase price is £15.2m not just £5.2m, I'm not trying to score points just understand what WASPS have actually paid for a 250 year lease

They've paid £5.2m, that's it. Any suggestion otherwise is spin to try and make the deal look better, from CCC's point of view, than it was. Wasps don't owe a penny to the council, it's ACL that owe the money and they are the ones that will make repayments not Wasps.

£5.2m is crazy when you consider in a few months they are likely to get at least double that for the stadium naming rights renewal.

 

[torchomatic]

And we paid double that in rent and got F all from ACL.

£5.2m is crazy when you consider in a few months they are likely to get at least double that for the stadium naming rights renewal.

 

[dongonzalos]

The loan what is its value and what are WASPS responsibilities to it, surely this is key in establishing the true value of the purchase price

Apparently not every time I correct someone saying the deal is worth around £20 million I keep getting reminded that it is only worth £5.5 Million.

Apparently when someone asks you what you bought your house for it the deposit you paid, not the other say 200k of mortgage or whatever figure. You agreed to be responsible for. Apparently we can just forget that figure.

 

[chiefdave]

Is the loan now with wasps or ACL? If it's with wasps they have responsibility, if it's still with ACL Ltd, then it's them (the stadium company) responsibility.

Even if it is with Wasps it's still not part of the sale price. The original loan was to ACL to buy an asset. In simple terms if ACL was taken over or it wasn't CCC were due that money.

If you buy a box factory and there's still a loan outstanding for the box making machine you don't add the balance due on the loan to the price you've paid for the company. Well you sometimes do when purchasing out of administration, then you'll see statements like abc proposed a package worth £x to purchase xyz.

 

[Hobo]

Grendel
Thanks for pointing out Wasps are a nasty Hedgefund, it just proves SISU are no good...not even as a nasty hedgefund.

I wish things had gone all Fugazi! What a great band they were!

 

[chiefdave]

Apparently not every time I correct someone saying the deal is worth around £20 million I keep getting reminded that it is only worth £5.5 Million.

Look at it this way, you lend me £1m to buy a factory. I then sell that factory to Coca Cola, they pay me £200K and will continue to make the loan payments to you, there's £500K outstanding on the loan. Have Coca Cola just paid you £500K to buy my factory or have they paid me £200K to buy it?

I would say they have paid £200K to me and taken on £500K in liabilities which they will pay out of the money their newly acquired factory generates.

 

[martcov]

Is the loan now with wasps or ACL? If it's with wasps they have responsibility, if it's still with ACL Ltd, then it's them (the stadium company) responsibility. Wasps are just the major share holders. The problem is, that the loan is built within ACL's operating costs, like any bill or standing order. That would have likely remained in ACL regardless of who took over. So then it boils down to upfront cash. And in upfront cash terms they paid around £5.5m.


Sent from my iPhone using Tapatalk - so please excuse any spelling or grammar errors

is a loan operating costs? Operating costs are things like electric and water, services etc.. Loan repayments are reducing a liability and will end some day. Running costs continue so long the business is running. ACL has to repay money borrowed - the same as if they had paid up front and taken out a loan to do so ( in effect that is what they have done, except the loan had been given to their predecessors for that reason and they just took it over - allbeit at new conditions ).

 

[Grendel]

Apparently not every time I correct someone saying the deal is worth around £20 million I keep getting reminded that it is only worth £5.5 Million.

Apparently when someone asks you what you bought your house for it the deposit you paid, not the other say 200k of mortgage or whatever figure. You agreed to be responsible for. Apparently we can just forget that figure.

So ACL was valued at negative equity all along then?

 

[Grendel]

Apparently not every time I correct someone saying the deal is worth around £20 million I keep getting reminded that it is only worth £5.5 Million.

Apparently when someone asks you what you bought your house for it the deposit you paid, not the other say 200k of mortgage or whatever figure. You agreed to be responsible for. Apparently we can just forget that figure.

Will you take OSB's word on this Don?

 

[shy_tall_knight]

You can spin as much as you like but it looks like the purchase price is £20m £5.5m cash and £14.4m of debt - SISU didn't get CCFC for free as they took on the loans.

 

[martcov]

Look at it this way, you lend me £1m to buy a factory. I then sell that factory to Coca Cola, they pay me £200K and will continue to make the loan payments to you, there's £500K outstanding on the loan. Have Coca Cola just paid you £500K to buy my factory or have they paid me £200K to buy it?

I would say they have paid £200K to me and taken on £500K in liabilities which they will pay out of the money their newly acquired factory generates.

I bought a flat with a 100% mortgage. So I got it for nothing - except a liability. On my deeds the purchase price is recorded as 130000 ( coincidentally the price of my mortgage.... ), and I paid stamp duty on that amount - although I didn't part with a penny. In ACLs case they will repay the loan out of their income and I pay my flat off out of my income. So did I pay 130,000,00 for my flat - as the taxman says - or did I get a free flat? - according to you guys.

 

[dongonzalos]

Look at it this way, you lend me £1m to buy a factory. I then sell that factory to Coca Cola, they pay me £200K and will continue to make the loan payments to you, there's £500K outstanding on the loan. Have Coca Cola just paid you £500K to buy my factory or have they paid me £200K to buy it?

I would say they have paid £200K to me and taken on £500K in liabilities which they will pay out of the money their newly acquired factory generates.

That money would have gone in their pocket as profit. Instead it is used to pay the loan. They owe that money the deal was worth around 20 million.
If they borrowed 14 million from TSB and payed the councils loan straight off. Would you be saying they paid 5.5 million for it?

 

[dongonzalos]

I bought a flat with a 100% mortgage. So I got it for nothing - except a liability. On my deeds the purchase price is recorded as 130000 ( coincidentally the price of my mortgage.... ), and I paid stamp duty on that amount - although I didn't part with a penny. In ACLs case they will repay the loan out of their income and I pay my flat off out of my income. So did I pay 130,000,00 for my flat - as the taxman says - or did I get a free flat? - according to you guys.

If you rented it out and paid back the mortgage out of your rental income then yes it looks like you got it completely free. What a bargain a flat worth £130000 sold for nothing. I need to get in on that game.

Sounds a bit Fugazi to me.

 

[martcov]

If you rented it out and paid back the mortgage out of your rental income then yes it looks like you got it completely free. What a bargain a flat worth £130000 sold for nothing. I need to get in on that game.

Sounds a bit Fugazi to me.

that is actually the plan.... But the taxman sees it differently. He says that the purchase price is that agreed between the buyer and seller. Where the finance comes from is irrelevant and how quickly it gets paid back has no effect on the original agreed price. The loan repayments are not running costs. I can only set the interest part of the repayments off against the tax as expenses.

 

[chiefdave]

I bought a flat with a 100% mortgage. So I got it for nothing - except a liability. On my deeds the purchase price is recorded as 130000 ( coincidentally the price of my mortgage.... ), and I paid stamp duty on that amount - although I didn't part with a penny. In ACLs case they will repay the loan out of their income and I pay my flat off out of my income. So did I pay 130,000,00 for my flat - as the taxman says - or did I get a free flat? - according to you guys.

That's not really the same thing even if you ignore the fact that the bank could have taken your flat off you if you hadn't paid them! A better analogy is this, you purchase your flat for £130K. You then take out a loan of £15K to renovate. You then sell the flat to me, I say I will pay the remaining instalments on your loan out of the payments I get for renting it out, the remaining balance on the loan is £10K. Have I paid £130K for your flat or £140K, what does it say on the deeds?

 

[chiefdave]

Look at it another way, instead of taking the initial YB loan ACL had the option to pay yearly for the lease, I think it was £1m a year. If they had taken that option and with Wasps having 250 years left to go on the lease would you say they had paid CCC £255.4m?

 

[martcov]

140k. The price of the flat is 140k if you agreed on 130k cash and 10k in repayments on my behalf - total 140k. Otherwise why do you want to pay my loan off out of your wages? I could of course ask for the full 140k up front and pay my own loan off. Price is still 140k.

 

[Grendel]

OSB has done a piece on this confirming that the purchase is £5.4 million - still don knows more than OSB don't you don?