£61m of debt wiped out in latest CCFC accounts (7 Viewers)

[SimonGilbert]

£61m of debt wiped out by Coventry City owners SISU in latest filed accounts

http://www.coventrytelegraph.net/news/coventry-news/coventry-city-owners-sisu-wipe-8777372 #PUSB

 

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[matesx]

???

somebody tell me this is genuinely good news for CCFC

 

[Captain Dart]

Ouch, the club lost £6.87M over the period. Almost double what Wasps lost!

 

[christonabike]

Maybe Byng lent them a few bob.

 

[skyblueinBaku]

On the surface it sounds good - but I don't understand accountantspeak. I'll wait until OSB steps forward with a translation.

 

[Sub]

The accounts also point to the club’s ambition to build its own stadium and indicate that the cost of this would be met by a separate, but associated, company. ?

So CCFC wouldn't own this new stadium either ?

 

[crowsnest]

Copy of the accounts available on the clubs website

http://www.ccfc.co.uk/news/article/download-accounts-coventry-city-league-one-2316117.aspx

 

[King of the Lesbians]

<flips coin> Heads. It's a bad thing...

 

[lifelongcityfan]

conversion of the loans to equity is a good thing... the only way they (sisu) can get that money back is have some value added to the club and make the shares worth something.
In my opinion that was a good move by the league and something that SISU would not have done off their own free will.

 

[chiefdave]

That's a turn up for the books. I suppose they could always hold out claiming their shares are worth £60m but they must know they are never going to see that money again.

If the debt has been wiped out in the clubs accounts does it follow that it's also wiped out in the accounts of the lender? I assume it must be as you couldn't really submit your accounts saying you were owned £60m when the organisation that supposedly owes you it doesn't list a debt.

 

[Thenose]

The accounts also show that the club has retained an option on returning to Sixfields should there be a problem at the Ricoh Arena.

Oh dear, back to Northampton when they piss the Wasps off...

 

[lifelongcityfan]

That's a turn up for the books. I suppose they could always hold out claiming their shares are worth £60m but they must know they are never going to see that money again.

If the debt has been wiped out in the clubs accounts does it follow that it's also wiped out in the accounts of the lender? I assume it must be as you couldn't really submit your accounts saying you were owned £60m when the organisation that supposedly owes you it doesn't list a debt.

yes it does.. the debtor in the lenders books would no longer exist- they now have shares in CCFC- lucky them!!

 

[chiefdave]

The accounts also point to the club’s ambition to build its own stadium and indicate that the cost of this would be met by a separate, but associated, company. ?

So CCFC wouldn't own this new stadium either ?

That in inself is not unusual, it's all down to how the companies are linked and if we are charged rent, recieve revenues and who owes any debt.

 

[Grendel]

Oh dear, back to Northampton when they piss the Wasps off...

You hope.

 

[shmmeee]

First Mowbray, now this. Who are you and what have you done with Sisu? (Pending OSB making some sense of this for us mere mortals)

 

[SkyBlue_Bear83]

Don't really understand accounting but sounds good that they have written off the majority of their debt?

With Wilson money and back at the Ricoh this years accounts could be break even.

 

[lifelongcityfan]

also , the only way they can get a return if those shares become worth someting...so my take is good news. smart move by the league!
sure OSB will add his more depth analysis...

 

[torchomatic]

So what? You may want to look at this: http://www.coventrytelegraph.net/news/coventry-news/wasps-rfc-accounts-reveal-63m-8720201

Almost identical statement from Wasps; "you may look at the figures and think they look bad", etc. Also don't forget they have a £13M loan to pay off. And their attendances are also dropping off despite the continued deals.

Ouch, the club lost £6.87M over the period. Almost double what Wasps lost!

 

[lapsed_skyblue]

Conversion of debt into equity should mean that the previous strategy of putting the company into administration will not work again. They used the debt to effectively bar bids from any other party.

 

[Thenose]

You hope.

I truly don't, but SISU hardly have a great record in building relationships, they seem to prefer threats and scorched earth...

 

[torchomatic]

Well, they could always concoct a sob story, say they didn't have a choice and that we would fold, etc and everyone would shout YIPPEE! and support the move.

I truly don't, but SISU hardly have a great record in building relationships, they seem to prefer threats and scorched earth...

 

[shmmeee]

The company also accrued £5.6million of administration expenses and almost £2.1million of loan interest - but club officials insist the owners have not taken any money out of the club. They say the figures must be included on the balance sheet for accounting purposes.

Can anyone explain that bit a bit more? Is that £7.7m part of the £8.4m loss? But it wasn't actually taken out, so the "real terms" loss would be more like £0.7m, right? Or have I got that wrong?

Surely not all of the £5.6m on administration would be Sisu related, some of it would be legitimate wouldn't it?

Anyone who can shed light would be appreciated.

 

[Evo1883]

Takeover??

 

[torchomatic]

I guess all of it is legitimate if they have been funding our losses.

Surely not all of the £5.6m on administration would be Sisu related, some of it would be legitimate wouldn't it?

Anyone who can shed light would be appreciated.

 

[chiefdave]

Besides the obvious fact we are now less in debt than before there are a couple of upsides to this that I can see. 1) the only way for SISU to now get a return is success on the field, the idea that they can take millions out of the club when players are sold as they are 'owed' it is out the window 2) we become a more attractive proposition for a takeover. Any takeover will most likely be for the famous £1 but the issue has always been what happens to the debt, now the debt is a lot lower it should become a more viable proposition.

It makes it even more of a shame that the Ricoh is go, had that not happened in light of this news a potential new owner could be looking at picking up the club and ACL for somewhere in the region of £20m. That's a big change from when we were talking about someone having to pay SISU £60m plus £20m or more for ACL. Sadly now any potential new owner will still need to find the finance for a new ground if we want to challenge above L1 level.

 

[lifelongcityfan]

Can anyone explain that bit a bit more? Is that £7.7m part of the £8.4m loss? But it wasn't actually taken out, so the "real terms" loss would be more like £0.7m, right? Or have I got that wrong?

Surely not all of the £5.6m on administration would be Sisu related, some of it would be legitimate wouldn't it?

Anyone who can shed light would be appreciated.

as I understand it these are the management fees that the owners continue to charge the club wuth.
SISU apologists should note that these are far higher than any rent!!!

There will probably be legal fees in there as well...ummm wait a minute why did we incurr those?

 

[shmmeee]

conversion of the loans to equity is a good thing... the only way they (sisu) can get that money back is have some value added to the club and make the shares worth something.
In my opinion that was a good move by the league and something that SISU would not have done off their own free will.

Agreed. If this was the League's doing I take back at least 5% of the insults I threw their way. Probably did more to help the club be sustainable there than any chairman has. Of course if they had ruled that CCFC Ltd was the club as they should we would have had a proper admin process and probably be debt free with new owners...

 

[Captain Dart]

<flips coin> Heads. It's a bad thing...

Tails. Its a terrible thing.

 

[shmmeee]

as I understand it these are the management fees that the owners continue to charge the club wuth.
SISU apologists should note that these are far higher than any rent!!!

There will probably be legal fees in there as well...ummm wait a minute why did we incurr those?

I get that, but there must be some genuine administration that needs doing at the club, it can't all be dodgy Cayman companies and lawsuits.

 

[Captain Dart]

also , the only way they can get a return if those shares become worth someting...so my take is good news. smart move by the league!
sure OSB will add his more depth analysis...

I presume the expectation is that they can eventually be sold for a few pence in the pound.

 

[lifelongcityfan]

I get that, but there must be some genuine administration that needs doing at the club, it can't all be dodgy Cayman companies and lawsuits.

fair point...could be the actual charges of the administrators..although i would have thought they would have been paid out if the net assets of the co. in admin

 

[shmmeee]

I guess all of it is legitimate if they have been funding our losses.

I read the article as saying Sisu weren't actually taking that fee, but it was being shown on the accounts and so going onto the debt owed. As opposed to actual cash leaving the business and needing to be borrowed....now I write I out I see there's not really any difference.

 

[SkyBlue_Bear83]

Without the proper accounting knowledge or expertise, any conclusions drawn from this will likely be ill-informed and wrong anyway. People will see what they want to see.

 

[torchomatic]

To be honest I can't even spell akounts nevermind understand them.

I read the article as saying Sisu weren't actually taking that fee, but it was being shown on the accounts and so going onto the debt owed. As opposed to actual cash leaving the business and needing to be borrowed....now I write I out I see there's not really any difference.

 

[mattylad]

Besides the obvious fact we are now less in debt than before there are a couple of upsides to this that I can see. 1) the only way for SISU to now get a return is success on the field, the idea that they can take millions out of the club when players are sold as they are 'owed' it is out the window 2) we become a more attractive proposition for a takeover. Any takeover will most likely be for the famous £1 but the issue has always been what happens to the debt, now the debt is a lot lower it should become a more viable proposition.

It makes it even more of a shame that the Ricoh is go, had that not happened in light of this news a potential new owner could be looking at picking up the club and ACL for somewhere in the region of £20m. That's a big change from when we were talking about someone having to pay SISU £60m plus £20m or more for ACL. Sadly now any potential new owner will still need to find the finance for a new ground if we want to challenge above L1 level.

It makes the short term takeover of the club virtually impossible as no one is going to buy out the shares at the value now attached to them. It does however mean that SISU need a succesful club but history shows they won't be throwing big bundles of cash at it anytime soon.