Club aims to raise £35m from bond (6 Viewers)

[chiefdave]

In the sales blurb for the bond it states that Wasps own the arena outright, would seem to be a odd thing to get wrong. Also says the Arena has been valued at £48m.

That ties in with what I was told although I haven't seen it myself so I'm relying on information from my accountant. When I pushed him he wasn't certain if it definitely said they own the Ricoh but that was definitely the impression given.

He also said the figures, both the current situation and future projections, were pure fantasy.

 

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[Rusty Trombone]

Which link is that on?

http://www.wasps.co.uk/the-club/bonds/secured-bonds

Go to Information booklet, then page 8.

 

[Nick]

Surely they wouldn't get away with blatantly trying to deceive?

 

[skybluetony176]

Why is asking for money from supporters clever?

I can't say I know the details of the investment they're selling so I can't answer that.

But that isn't even the point I was making. The point I was making was that SISU have not been clever enough to acquire ACL and the Ricoh like Wasps have and therefore are not in the position to use it as an asset to raise funds from investors like Wasps are.

 

[chiefdave]

So realistically, if it all went to pot what would happen?

They would have to try and flog the lease / ACL to pay people back?

well if it's guaranteed then at some point you get your initial stake returned so at some point Wasps will need to generate profit of £35m to cover that over the term of the bond. If they don't have it they will need to either raise money on what they offered as security or ownership would pass to the bond holders at a guess.

if the value of the asset being used as a guarantee doesn't cover the amount needed there might be a problem.

Which link is that on?

dont think its online, it will most likely turn up, probably in modified form, as part of the fan offer.

edit: or follow the link a couple of posts up!

 

[chiefdave]

Surely they wouldn't get away with blatantly trying to deceive?

From what I was told they're a bit of a laughing stock at the moment but I would think bonds would be covered by regulations so they will need to back up what they have said.

Fuel for another JR and / or investigation from the charity commission? Would it not follow if Wasps statements are true CCC and Higgs sold at well below market value?

 

[Rusty Trombone]

Some interesting(?maybe?) figures in the prospectus, needs OSB to have a look at really, shows that ACL also made a loss for the six months to Nov 14. The money they raise from the bond will repay the Council, and up to £10m to repay loans given by Richardson, some other loans £4m, and then fund ACL running costs and wasps running costs.

 

[Nick]

Some interesting(?maybe?) figures in the prospectus, needs OSB to have a look at really, shows that ACL also made a loss for the six months to Nov 14. The money they raise from the bond will repay the Council, and up to £10m to repay loans given by Richardson, some other loans, and then fund ACL running costs and wasps running costs.

Where have you seen it?

 

[Rusty Trombone]

Where have you seen it?

Followed the link posted earlier, looked on the prospectus part, around page 52 says what the money will be used for.

 

[Nick]

Do you need to be signed up? Is there a direct link to the prospectus?

 

[Rusty Trombone]

Do you need to be signed up? Is there a direct link to the prospectus?

No signing up, yep fairly direct link, just one more click.

http://www.wasps.co.uk/the-club/bonds/secured-bonds

then click prospectus towards the bottom.

 

[chiefdave]

shows that ACL also made a loss for the six months to Nov 14. The money they raise from the bond will repay the Council, and up to £10m to repay loans given by Richardson, some other loans £4m, and then fund ACL running costs and wasps running costs.

You must have that wrong Rusty After all Richardson is a huge Wasps fan and definitely not interested in the money. And we've been told ACL is hugely profitable with massive increases in business so clearly they won't need money to cover losses by ACL and Wasps.

What seems odd is Wasps must know what SISU are like and the ongoing JR(s?). This seems like ideal fuel for SISU to drag everyone back into court again.

 

[SkyBlue_Bear83]

Use of Proceeds
The proceeds from the issue of the Bonds will be used by Wasps Holdings and ACL for the following
purposes:
(a)
to repay in full the facility provided to ACL by CCC;
(b)
to repay in full the Close Leasing Facility;
(c)
to part repay to Derek Richardson anamount of up to £10 million onor after the Issue Date pursuant to the Shareholder Loan
If £10 million is repaid, this will leave a remaining balance of £10,361,658 under the Shareholder Loan;
(d)
to fund the Interest Service Reserve Account, as detailed in the terms and conditions of the Bonds and under Section 3 (Information About the Bonds –
How will the Bonds be secured?”)
(e)
for general working capital purposes of ACL and Wasps Holdings.
All existing security granted by the Group to CCC and Close Leasing Limited in relation to the facilities
described above will be released on the date that the Bonds are issued.

 

[Rusty Trombone]

You must have that wrong Rusty After all Richardson is a huge Wasps fan and definitely not interested in the money. And we've been told ACL is hugely profitable with massive increases in business so clearly they won't need money to cover losses by ACL and Wasps.

What seems odd is Wasps must know what SISU are like and the ongoing JR(s?). This seems like ideal fuel for SISU to drag everyone back into court again.

They mention the ongoing court action in there, say that paying the loan back means that part (SISU's request for the loan to be paid back) of the case falls away.

Also mentions that the break in our 4 year rental is in ACL's favour not the club. So we've only got 1 guaranteed year left.

 

[SkyBlue_Bear83]

Where do I hand over my £2k?

 

[Rusty Trombone]

Where do I hand over my £2k?

I'll inbox you my account details. Thanks, see you in 2022.

 

[chiefdave]

Every time we find out any new details the whole thing seems to stink more and more. What we're basically seeing now is CCC have sold ACL to a company that doesn't have the money to pay back the loan, doesn't have the money to run their own business and doesn't have the money to run ACL!

This would be like Fisher coming out and asking the fans for money to pay back SISU and pay for a new ground and cover any losses for the next few seasons. I know councils can make some odd decisions but how on earth did they fall for this. They must have taken everything Wasps said on face value and not asked for evidence of anything.

 

[chiefdave]

If you were a potential investor alarm bells would ring straight away. They say they will pay back the bond in 5 years but need the cash to cover the running of ACL and Wasps for the next few years. Unless I'm missing something obvious (which is quite possible!) doesn't that require them to average £5m profit a year for the next 5 years just to pay back the bonds?

 

[SkyBlue_Bear83]

http://www.bbc.co.uk/sport/0/rugby-union/32476299

Wasps say they are on course to become the richest rugby club in the world after announcing their latest financial initiative.



Well if we went and borrowed more money than any other club in the country then we'd have the highest revenue in the UK as well, question is can they pay it back or do they even have any intention of paying it back?

Do they actually have any chance of hitting there £35 million target? Is this bond idea actually an attractive prospect to serious investors? (forget fans for the moment)

 

[SkyBlue_Bear83]

http://www.coventryobserver.co.uk/2...ns-and-pay-back-council-taxpayers-131528.html

Called it spot on here

 

[chiefdave]

Had a quick look, will give it a more thorough read tomorrow. First thoughts are that it raises some questions for CCC to answer. Hopefully the CT will spring into action. Just at first glance they need it be asked about the stated value against what they sold it for, the lack of security for the club which we were told they had secured and how they've managed to agree to a deal like this with someone who doesn't have the money for it!

Well if we went and borrowed more money than any other club in the country then we'd have the highest revenue in the UK as well, question is can they pay it back or do they even have any intention of paying it back?

Do they actually have any chance of hitting there £35 million target? Is this bond idea actually an attractive prospect to serious investors? (forget fans for the moment)

Think they'll have to pay it back or go out of business. Not sure you can get out of repaying a bond if the value is in the company, if they're offering the Ricoh as security if they don't have the cash they will need to sell that, which would be interesting as they don't own it!

From what I've heard serious investors have taken one look at the figures and chucked it in the bin as, in simple terms I could understand, they can't see how two companies who are both struggling are suddenly going to start making the sort of money they are talking about.

 

[James Smith]

What really struck me was the fear of SISU doing something like this was exactly why people were against CCC selling to them. Sure now it's Wasps doing this we will see it is fine and nothing to worry about.

Funnily enough I read that just after the article about boiler room sales tactics and whilst there is no connection between the two it made me laugh. For the record I was against the council selling to Wasps and I find this development just as unappealing.

 

[James Smith]

Where is in the know when you need him?

That was a him? Who was the one with the journalist boyfriend who claimed inside info then?

 

[James Smith]

No signing up, yep fairly direct link, just one more click.

http://www.wasps.co.uk/the-club/bonds/secured-bonds

then click prospectus towards the bottom.

I read and agreed that I wasn't a resident of the USA, Japan, Jersey, Isle of Man, Mars etc. and clicked on Prospectus only to find that..... The prospectus link doesn't work on my tablet so I'll have to have a look at work tomorrow.
However on the secured bonds page it says:

The Bonds will be secured over Wasps Holdings and Arena Coventry Limited, including the Ricoh Arena.

To me that would say the bricks and mortar of the place which the hypocritical council obviously didn't sell to them.

 

[skybluejelly]

Maybe Michael mcindoe is there financial adviser ...does it not imply that they will use 10 million to fund the reserve pot to service the 6% interest they promise ..sounds like a really low paying Ponzi scheme

 

[skybluetony176]

You must have that wrong Rusty After all Richardson is a huge Wasps fan and definitely not interested in the money. And we've been told ACL is hugely profitable with massive increases in business so clearly they won't need money to cover losses by ACL and Wasps.

What seems odd is Wasps must know what SISU are like and the ongoing JR(s?). This seems like ideal fuel for SISU to drag everyone back into court again.

Oooooo. Another smoking gun. I'm salivating.

 

[Skyblueweeman]

Surely they wouldn't get away with blatantly trying to deceive?

They're a hedge fund.

It's ok though, it's Wasps.


Sent from my iPhone using Tapatalk

 

[Rusty Trombone]

If you were a potential investor alarm bells would ring straight away. They say they will pay back the bond in 5 years but need the cash to cover the running of ACL and Wasps for the next few years. Unless I'm missing something obvious (which is quite possible!) doesn't that require them to average £5m profit a year for the next 5 years just to pay back the bonds?

Either that, or they could give another bond out again. All the people that had just got their 6.5% for 7 years will no doubt be interested again. So keep doing that and never pay the loan back, just interest, that the loan helps service anyway.

 

[Rusty Trombone]

Maybe Michael mcindoe is there financial adviser ...does it not imply that they will use 10 million to fund the reserve pot to service the 6% interest they promise ..sounds like a really low paying Ponzi scheme

Hard to argue against that. Interest cost over the 7 years will be £16m, £13m to the Council, £4m other loan, £10m to Richardson, and that leaves errrrrrrr, minus £8m for working capital.

I know the hope is that the interest will come from future profits, but it's hard not to be cynical.

 

[chiefdave]

Oooooo. Another smoking gun. I'm salivating.

Didn't say it was a smoking gun did I? We know SISU like to drag everyone into court, we know councils and charities are required to get best value. Wasps paid less than £6m a few months later they're saying its been valued at £48m, seems to be a bit of a discrepancy there.

 

[Nick]

Didn't say it was a smoking gun did I? We know SISU like to drag everyone into court, we know councils and charities are required to get best value. Wasps paid less than £6m a few months later they're saying its been valued at £48m, seems to be a bit of a discrepancy there.

Isn't that like me buying a house for 50k and trying to re mortgage for 500k?

 

[Nick]

Fantastic News - http://www.coventrytelegraph.net/news/coventry-news/wasps-rfc-looks-raise-35million-9121703

Copy and Paste Article.

No mention of it paying Richardson back too?

 

[chiefdave]

Isn't that like me buying a house for 50k and trying to re mortgage for 500k?

Seems that way, so either you've got the house very very cheap or you're lying to the bank about how much it is worth when you're applying for your mortgage.

 

[Nick]

Seems that way, so either you've got the house very very cheap or you're lying to the bank about how much it is worth when you're applying for your mortgage.

The house seller openly admitted when the last person interested wanted to buy in their offer was way over value. So nowhere near the value I'm mortgaging at.

 

[skybluetony176]

Didn't say it was a smoking gun did I? We know SISU like to drag everyone into court, we know councils and charities are required to get best value. Wasps paid less than £6m a few months later they're saying its been valued at £48m, seems to be a bit of a discrepancy there.

True, you didn't. Knowing SISU it will probably turn out to be a dried up water pistol like last time anyway.