Fugazi (5 Viewers)

[chiefdave]

If the wasp did not clear the existing loan are servicing the loan that was made to ACL then they have fell into SISU's web and the appeal they have made has grounds

I think that's one for the lawyers. Didn't the judge in the JR say it was OK as CCC were protecting their own investment, that wouldn't be the case now would it? Think that would need a whole new legal action launched so that's something to look forward to in the new year!

Could be interesting if CCC or Higgs at any point said in court about how fantastically well ACL was doing without us there. That one might take some explaining given how cheaply they've sold it to Wasps should any new action be launched.

 

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[dongonzalos]

I think that's one for the lawyers. Didn't the judge in the JR say it was OK as CCC were protecting their own investment, that wouldn't be the case now would it? Think that would need a whole new legal action launched so that's something to look forward to in the new year!

Could be interesting if CCC or Higgs at any point said in court about how fantastically well ACL was doing without us there. That one might take some explaining given how cheaply they've sold it to Wasps should any new action be launched.

That's why you probably want wasps to do well. Otherwise it could be another 5-7 years of attempting to get to break even point and looking for opportunities to put financial pressure on wasps and I would guess try to get kicked out if the Ricoh to try and put more pressure in Wasps.

 

[chiefdave]

So they would have had to basically get another loan to pay that loan off? Can you explain for the retards like me

The theory was the loan from CCC to ACL was OK as CCC were protecting their own investment now. Only now they don't own ACL, it is owned by a hedge fund. I suppose the argument would be the council giving loans to a company owned by a hedge fund is very different to the council giving loans to a company it part owns with a charity.

I would have thought the best idea would have been for ACL to take out finance themselves from another source and pay off the CCC loan. Shouldn't be a problem with ACL obtaining credit if it is as commercial successful as has been claimed by CCC and Higgs.

 

[chiefdave]

That's why you probably want wasps to do well. Otherwise it could be another 5-7 years of attempting to get to break even point and looking for opportunities to put financial pressure on wasps and I would guess try to get kicked out if the Ricoh to try and put more pressure in Wasps.

If, and it's a huge if, it was found that the loan to ACL was now state aid as ACL is privately owned it wouldn't matter how well Wasps are doing would it? A judge wouldn't go, well lets not worry about it, seems Wasps are doing OK.

 

[Nick]

Trying to make sense of the discussion about the purchase price.

What happens then if the loan was to say for example Hugh Hefner, CCC and Higgs would get their share for purchase but Hugh Hefner would get the loan money going forward wouldn't he? Just a coincidence that CCC had loaned the money?

If I bought a car and took on the loan, I would only give the owner x amount (purchase price) but would then pay the loan company the rest?

Am I miles off? I did sell a car once with finance left over, the guy gave me an amount and then called the finance company and paid them what they wanted.

 

[chiefdave]

Exactly right but it seems far to complicated for most people!

 

[Astute]

I have just found out on this thread that I paid less for my house than I thought. I paid 120k cash (equity from previous house) and a 70k loan. As the loan doesn't count I only paid 120k.

 

[stupot07]

I have just found out on this thread that I paid less for my house than I thought. I paid 120k cash (equity from previous house) and a 70k loan. As the loan doesn't count I only paid 120k.

Nope. You personally borrowed that money (mortgage) and paid the vendor £190k upfront for the house. The value registered at the land registry would be £190k.

If you then sold your house tomorrow (let say it's still worth £190k). The buyer would pay you £190k, it's then up to you to sort your new mortgage out for your new house.

The share value of ACL (100%) to 100% it was £5.5m. They didn't borrow £14m and pay higgs and ccc c£10m (£2.77m deposit, c£7m loan) each for their shares (equivalent of mortgage for buying a house).

That £14m loan is basically covering the upfront rent payment that ACL paid ccc rather than paying annual rent.

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

 

[albatross]

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?

Yes but that is to purchase ACL with all the liabilities. i.e. a £14m loan / mortgage that has to be paid to the council. If they refinance they still have to pay £14m to the council. So once you determine how much they pay in total it is not a great leap to be able accept that the deal in total will be about £20m.

 

[Macca]

So what's everyone going to do about it then? Quite frankly whining about it on here is getting more than tedious. If you believe in something enough need to take action

 

[Otis]

I can only think that people have so much hate for SISU it is stopping them from seeing any other issues. It seems as soon as you ask a question of any other party involved you somehow become a SISU supporter.

I don't think most people do just blame Sisu, despite all the claims to the contrary. All sides hold a degree of culpability.

Thing is in all this, even if a new stadium is the answer, if it is outside of Coventry and closer to another town, the club will lose supporters. I think that is an undeniable fact. People can argue all their want on the rights and wrongs of this stance, but listen to the fans and see how many are saying they will walk away.

We already have a dwindling fanbase. For me, to move a number of miles outside of the city is pure madness.

If we move and end up in Nuneaton I will be one of those who will stop going and this after to close to 50 years going up, man and boy.. The club really need to listen to the fans on this one. A ground in Nuneaton can have all the CCFC badges it wants emblazoned on the fascia, it would never feel like home to me. Listening to fans on this, I know there are a lot of people who feel exactly the same.

Will the club listen to fans though? That is the crux of the matter here.

 

[oldskyblue58]

The purchase price was what was paid for the shares. The shares price are what all the assets and liabilities of ACL were worth. You cannot single out one existing creditor and say I tell you what lets call that part of the sale price.

Using the logic of "£20m" then why not build in to it what was owed to suppliers, HMRC, Compass, staff etc there will be creditors that exist for all of those that ACL will have to pay, that using the flawed "£20m sale price" argument Richardson would be "responsible for"...... they all have to be paid just like the loan

On the other side of that of course are the assets (the original lease the fixtures & fittings etc.), the debtors, the prepaid items that must work in the opposite direction and decrease the sale price in the "20m" logic surely.

To spin it as Wasps paid £20m is complete rubbish. What they bought for £5.54m was the shares that included all the assets and liabilities of ACL,..... including the liability to CCC

 

[lordsummerisle]

Thank God, some people might listen to you OSB.

Imagine that Chiefdave has got a fractured skull after banging his head repeatedly against a brick wall on here.

 

[shy_tall_knight]

If the net assets (assets less liabilities) are a net liability of £10m, then the purchase price is £5.4m + £10m.

I presume there are few assets in ACL just the leases with the hotel, casino , ccfc and that the liabilities- the loan are significantly higher.

However need to also factor in the potential stadium naming rights which could be very significant

 

[oldskyblue58]

Except net assets of the ACL group at 31/05/13 were £7.4m according to the published accounts

The purchase price of the shares remains what it was £5.4m

Factor in the costs of the dispute, maybe discounts for renovations to be done and a few other things that any buyer would haggle over and is £5.4m so very far away from the balance sheet value or market value?

 

[oldskyblue58]

As I understand it there is a break clause on the stadium sponsorship in 2015 or 2016 so that will limit value. Any new owner may have their own ideas on the stadium sponsor so the existing one would carry little value for them

 

[Godiva]

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.

You are comparing apples with bananas. The flat in your example is your personal asset, the loan is your personal liability. You - not the flat - will have to generate an income to service the loan. If you fail to service the loan you will not only lose your flat but will also owe the reminder of the loan if the flat is sold or auctioned at less than the outstanding loan.
ACL is a limited company. The liabilities (loans) belong to the company. It's the company's generated revenue that service the loan - not the shareholders revenue. If the company fail to service the loan the company will go bankrupt without the shareholders being liable for the reminder of the loan.

Wasps paid £5.5m for the shares in ACL. Within ACL lies the loan as part of the total balance of assets and liabilities. It's wrong to pick one liability and add to the price of the shares - why not add all the liabilities?

 

[Godiva]

Except net assets of the ACL group at 31/05/13 were £7.4m according to the published accounts

The purchase price of the shares remains what it was £5.4m

Factor in the costs of the dispute, maybe discounts for renovations to be done and a few other things that any buyer would haggle over and is £5.4m so very far away from the balance sheet value or market value?

Interesting. What would you reasonably value the increase of the lease to 250yrs? What would the net assets be without that increase?

 

[oldskyblue58]

hard to tell without knowing the terms. How much did they pay for it, is there a minimal rent etc

I would think the value of ACL is going to increase not only because of the lease but because of the relationship to premiership rugby. I would think that Wasps will be able to attract a premium for sponsorships and corporate activities that ACL under CCC & AEHC could not ...... or that CCFC in their current state could match

 

[shy_tall_knight]

OSB - I am amazed that the net assets were £7.8m, is that because the value of the ricoh is included ie the land & buildings

 

[Godiva]

hard to tell without knowing the terms. How much did they pay for it, is there a minimal rent etc

I would think the value of ACL is going to increase not only because of the lease but because of the relationship to premiership rugby. I would think that Wasps will be able to attract a premium for sponsorships and corporate activities that ACL under CCC & AEHC could not ...... or that CCFC in their current state could match

I agree the value of ACL will increase going forward. At least while ccfc is there generating revenue. I am not convinced ACL/Wasps can make a combined profit in the long run after ccfc has left.

But I believe we were discussing the price Wasps paid and so the value on take-over day.
I think the lease period increase as well as getting ccfc back was necessary to lift the value to an amount that would see Higgs get back a fraction more than the £2m they were seemingly offered by sisu two years ago.

 

[fernandopartridge]

Yes but that is to purchase ACL with all the liabilities. i.e. a £14m loan / mortgage that has to be paid to the council. If they refinance they still have to pay £14m to the council. So once you determine how much they pay in total it is not a great leap to be able accept that the deal in total will be about £20m.

What happens if the £14m isn't repaid

 

[albatross]

What happens if the £14m isn't repaid

CCC have a charge over the RICOH and would foreclose, ACL goes bust and CCC have the RICOH as an asset to sell on.

 

[chiefdave]

CCC have a charge over the RICOH and would foreclose, ACL goes bust and CCC have the RICOH as an asset to sell on.

You have no way of knowing that if ACL misses a payment CCC would foreclose. You have no way of knowing if there is something in the deal between Wasps, CCC and Higgs that, for example, allows a certain level of arrears to be built up before any action is taken. This is more important now than previously as it's in the hands of a private rather than public entity.

 

[Grendel]

CCC have a charge over the RICOH and would foreclose, ACL goes bust and CCC have the RICOH as an asset to sell on.

Do you have any evidence or is this more tripe fed down your throat by your council friends.

 

[albatross]

You have no way of knowing that if ACL misses a payment CCC would foreclose. You have no way of knowing if there is something in the deal between Wasps, CCC and Higgs that, for example, allows a certain level of arrears to be built up before any action is taken. This is more important now than previously as it's in the hands of a private rather than public entity.

He asked what would happen if the £14m was not repaid. The ultimate sanction is repossession . The Ricoh and the 250 year leas is the asset that secured the debt.

I have read it again and nowhere did he ask what happens if they miss one payment , or 5 or built up areas that usually ends up in a agreed settlement between the two parties.

if they have changed the terms of the deal that much its probably a new loan which puts SISU in a tight spot as there is no no link between the Judicial review and the current arrangement with ACL.

 

[Godiva]

He asked what would happen if the £14m was not repaid. The ultimate sanction is repossession . The Ricoh and the 250 year leas is the asset that secured the debt.

If that happens then ACL goes out of business and CCC will have back the lease to a stadium with CCFC at a new stadium and Wasps probably gone too.

if they have changed the terms of the deal that much its probably a new loan which puts SISU in a tight spot as there is no no link between the Judicial review and the current arrangement with ACL.

Or a new loan on 'market terms' support sisu's claim that the original loan was unlawful state aid?

 

[oldskyblue58]

OSB - I am amazed that the net assets were £7.8m, is that because the value of the ricoh is included ie the land & buildings

What can I tell you, that's the figure given on the audited group accounts to 31/05/13. ACL accounts have shown one loss in 2006 the rest of the years have shown profits plus a £4.5m gain on the sale of some shares in the group company IEC to Compass. They have been cash flow positive in 5 out of the 8 years to 31/05/13 per the cash flow statements in the accounts

Overall they show net assets of £7.8m and over the 8 years to 31/05/13 show a total positive cash flow of £625k. The profits have been reinvested in to the business.

it does include a value of the lease at that time but the land & buildings belong to CCC so no

 

[oldskyblue58]

I agree the value of ACL will increase going forward. At least while ccfc is there generating revenue. I am not convinced ACL/Wasps can make a combined profit in the long run after ccfc has left.

But I believe we were discussing the price Wasps paid and so the value on take-over day.
I think the lease period increase as well as getting ccfc back was necessary to lift the value to an amount that would see Higgs get back a fraction more than the £2m they were seemingly offered by sisu two years ago.

I beg to differ, I think that Wasps will do ok without CCFC but it is preferable for CCFC to be there in the Wasps business case so long as CCFC is successful. At present with crowds averaging under 9000 I doubt that given the costs involved that they breakeven. The biggest match day income is ticket sales and that all goes to CCFC the F&B take is not going to be great for ACL. The income ACL/WASPS are guaranteed is the rent rumoured to be less than £100k or under £5000 per match. So unless CCFC is successful with bigger crowds there isn't much in it for ACL/WASPS but there could be. The WASPS business case will not fall down if CCFC leave if all that is true

 

[Godiva]

I beg to differ, I think that Wasps will do ok without CCFC but it is preferable for CCFC to be there in the Wasps business case so long as CCFC is successful. At present with crowds averaging under 9000 I doubt that given the costs involved that they breakeven. The biggest match day income is ticket sales and that all goes to CCFC the F&B take is not going to be great for ACL. The income ACL/WASPS are guaranteed is the rent rumoured to be less than £100k or under £5000 per match. So unless CCFC is successful with bigger crowds there isn't much in it for ACL/WASPS but there could be. The WASPS business case will not fall down if CCFC leave if all that is true

Plus bringing some 250.000 punters to the stadium will surely have an effect on sponsor deals and some add-on's to the rest of the business. I don't think CCFC being there is bad for ACL's bottom line. And I do think it will be noticed when the club moves out.

 

[oldskyblue58]

The over riding factor as far as sponsorship is concerned is Wasps not CCFC. Were CCFC to be successful then that may well change but as long as they bump along as they then stadium sponsors etc will be far more interested in Wasps. CCFC being there and successful with crowds 11k + is good for ACL certainly but if they have set up for that to breakeven and get 8000 fans then that suggests they could be making a loss on the deal. Certainly if CCFC move then it will be noticed, but I can not believe that the Wasps business plan for the complex hinges on CCFC being there - simply because you do not plan success by betting it on something known to be volatile and something completely out of Wasps control. They might plan for it to be the icing on the cake they surely wouldn't bet on it being the cake

Present crowd levels indicate a footfall of nearer 200,000. However ACL do not make most of their money from football footfall do they.

 

[shy_tall_knight]

Hi OSB believe or not I am a qualified accountant but out of touch a bit but according to our group accountant, there may be fixed assets such as fixtures and fittings( ie what the £20m loan was required to complete the stadium) that are included in ACL's books , so although there are net assets, they are not net current assets which can be easily turned into cash. The land & the buildings belong to CCC but the interior fittings, the costs of the creating the car parks may all be in ACL's books. Those £7.8m of net assets are most likely a £14m loan plus £21.8m of assets which are not current assets and only have a value as part of the stadium.

So in my opinion they have paid circa £20m for the use of these assets - purchase price of ACL £5.4m plus a loan that they have to finance which we believe is around £14m.

 

[stupot07]

Hi OSB believe or not I am a qualified accountant but out of touch a bit but according to our group accountant, there may be fixed assets such as fixtures and fittings( ie what the £20m loan was required to complete the stadium) that are included in ACL's books , so although there are net assets, they are not net current assets which can be easily turned into cash. The land & the buildings belong to CCC but the interior fittings, the costs of the creating the car parks may all be in ACL's books. Those £7.8m of net assets are most likely a £14m loan plus £21.8m of assets which are not current assets and only have a value as part of the stadium.

So in my opinion they have paid circa £20m for the use of these assets - purchase price of ACL £5.4m plus a loan that they have to finance which we believe is around £14m.

The £20m loan was the rent for the 50 year lease. They had the option to pay it annually or upfront. Nothing to do with the fixtures and fittings.


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

 

[Jack Griffin]

He asked what would happen if the £14m was not repaid. The ultimate sanction is repossession . The Ricoh and the 250 year leas is the asset that secured the debt.

I have read it again and nowhere did he ask what happens if they miss one payment , or 5 or built up areas that usually ends up in a agreed settlement between the two parties.

if they have changed the terms of the deal that much its probably a new loan which puts SISU in a tight spot as there is no no link between the Judicial review and the current arrangement with ACL.

I wonder if the parties to the agreement thought of that & planned accordingly, :thinking about:

 

[Jack Griffin]

If that happens then ACL goes out of business and CCC will have back the lease to a stadium with CCFC at a new stadium and Wasps probably gone too.

That is all very hypothetical, hey what if they don't? One would hope adequate due diligence has been done.