Club aims to raise £35m from bond (8 Viewers)

[James Smith]

SISU didn't deliberately set out to crush our club, they have just done a spectacularly shit job of trying to get a return on their investment (unless of course Joy is secretly a Sunderland fan and she's still pissed about 1977)

Whilst some people are no doubt eulogizing about the fantastic deal that Wasps got... it was the one deal that had SISU managed to get (and not fuck up) which would have probably seen a far hastier exit from them than we will see now.

Yes, what was Igwe doing all the time he was with us.

 

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[James Smith]

Yes! Not surprised though.

 

[James Smith]

The position to negotiate might be moot. It appears that ACL/Wasps could cut us loose at the end of the season and we will have no control of it.

Wasps don't fall under the jurisdiction of the FL or the FA, and no-one at CCC cares nor can do anything anyway.

What then........?

I asked something like this whilst we were self exiled in Northampton and was told not to worry. They'd never get a tenant for the stadium and to be fair I suspect everyone was assuming that the council wouldn't be two faced and hypocritical and agree to sell to someone from many many miles away.

 

[James Smith]

The option is the club then takes out an add in the Wasps evening telegraph and puts the contract in there for the fans to see.

Nah Wasps are into their confidentiality contracts apparently.

 

[chiefdave]

Not too far off the ill fated operation premiership scheme , and we all know how that ended up.

There's a lot of similarities between what we hear from Wasps Richardson and what our Richardson said at the time of the Arena 2000 project. You never know what might happen and judging by their lack of funds and the owner seeming to want to get his money back out rather than put in one bad season and relegation and they could be in trouble.

 

[torchomatic]

Fingers crossed!

one bad season and relegation and they could be in trouble.

 

[torchomatic]

They'd do one of their lists: "five reasons why Coventry City were turfed out of the Ricoh"

1. They have Coventry in their name
2. It was SISU what done it all
3. Have you seen the crowds the football club get? They're shit
4. The ball's the wrong shape for a start.
5. Their fans don't wave flags.

As if the CET would publish it... conflict of interests and all..

 

[Broken Hearted Sky Blue]

Fingers crossed!

Wouldn't rely on that,another Wasps would take it over after all as a franchise you dont just have one franchise do you you have a number,I would have thought

 

[torchomatic]

Aw, come on. Don't take away my hope. It's all I have left.

Wouldn't rely on that,another Wasps would take it over after all as a franchise you dont just have one franchise do you you have a number,I would have thought

 

[Broken Hearted Sky Blue]

Aw, come on. Don't take away my hope. It's all I have left.

I haven't even got that you lucky bugger.

 

[Terry Gibson's perm]

Nah Wasps are into their confidentiality contracts apparently.

Would make a nice change though to be taken to court rather than doing the taking and surely they are due a win soon, they seem to have about the same record of winning cases as the first team winning points.

 

[torchomatic]

From The Times, 28 April:

One of the best ways of losing money over the past few years has been investing in football clubs. Fans buy the shares not on the basis that they might or might not be a good investment but through tribal, not to say blind, loyalty.

Owning a rugby club has not been an easy way to riches, either.Wasps, one of the better-known names in the game and owner of one of the biggest grounds in the sport — and one of the country’s biggest convention centres, to boot — is raising between £25 million and £35 million through the issue of retail bonds offering a coupon of 6.5 per cent, among the highest returns available on the London Stock Exchange’s quoted Orb market.

Wasps bought the Ricoh Arena in Coventry in the autumn. It needs to repay the £13.4 million loan it took out as part of the £20 million purchase. The bonds issue will do this, without requiring Derek Richardson, the Irish businessman and owner of Wasps, to sell any of his equity.

This should raise question marks. The most obvious course would be for Wasps, along with its new acquisition, to float on the Alternative Investment Market and seek fresh funds that way. The trading record of the companies involved may well have precluded this. The prospectus shows that Wasps lost £392,000 at the attributable level in the last financial year. The Ricoh Arena lost more than £2 million. There were good reasons for this, not least the fact that Coventry City Football Club decamped from the stadium for a while. At its new home, Wasps will be better placed, but no one is suggesting much better than break-even this year.

Anyone buying into a seven-year retail bond wants, at a minimum, certainty that the company issuing it will be in existence in seven years’ time. Wasps almost certaintly will be — those non-rugby conference and hotel facilities provide two thirds of the revenues — yet that yield, though attractive, is not the only such available on the stock market. Phoenix Group, the insurance consolidator, is up there; various infrastructure funds offer a similar return. The usual high yielders, Vodafone and the pharma and tobacco stocks, are not far behind and offer much less risk.

My advice Avoid
Why Though the coupon is attractive, the company is not yet in profit and there are far safer sources of income on the stock market
Minimum investment £2,000

 

[Grendel]

Acl lost £2 million?

 

[chiefdave]

That's fair enough for the man on the street but journalists should be digging deeper and not just printing what they are told to print by Wasps. Lets give them the benefit of the doubt, this news raises a lot of questions to be asked of CCC, Higgs and Wasps, lets see if over the coming days those questions do get asked.

Well I was hopeful, given how glaring obvious some of the questions needing to be asked were, that our local media would get on the case. Seems I'm going to be disappointed as a few days on and we've heard nothing.

 

[SkyBlue_Bear83]

From The Times, 28 April:

One of the best ways of losing money over the past few years has been investing in football clubs. Fans buy the shares not on the basis that they might or might not be a good investment but through tribal, not to say blind, loyalty.

Owning a rugby club has not been an easy way to riches, either.Wasps, one of the better-known names in the game and owner of one of the biggest grounds in the sport — and one of the country’s biggest convention centres, to boot — is raising between £25 million and £35 million through the issue of retail bonds offering a coupon of 6.5 per cent, among the highest returns available on the London Stock Exchange’s quoted Orb market.

Wasps bought the Ricoh Arena in Coventry in the autumn. It needs to repay the £13.4 million loan it took out as part of the £20 million purchase. The bonds issue will do this, without requiring Derek Richardson, the Irish businessman and owner of Wasps, to sell any of his equity.

This should raise question marks. The most obvious course would be for Wasps, along with its new acquisition, to float on the Alternative Investment Market and seek fresh funds that way. The trading record of the companies involved may well have precluded this. The prospectus shows that Wasps lost £392,000 at the attributable level in the last financial year. The Ricoh Arena lost more than £2 million. There were good reasons for this, not least the fact that Coventry City Football Club decamped from the stadium for a while. At its new home, Wasps will be better placed, but no one is suggesting much better than break-even this year.

Anyone buying into a seven-year retail bond wants, at a minimum, certainty that the company issuing it will be in existence in seven years’ time. Wasps almost certaintly will be — those non-rugby conference and hotel facilities provide two thirds of the revenues — yet that yield, though attractive, is not the only such available on the stock market. Phoenix Group, the insurance consolidator, is up there; various infrastructure funds offer a similar return. The usual high yielders, Vodafone and the pharma and tobacco stocks, are not far behind and offer much less risk.

My advice Avoid
Why Though the coupon is attractive, the company is not yet in profit and there are far safer sources of income on the stock market
Minimum investment £2,000

Avoid? What, the Wasps Evening Telegraph told me it was an attractive investment. How do I get my money back? I just put in £100k

 

[stupot07]

Acl lost £2 million?

Think they have mixed up acl and wasps.


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

 

[Grendel]

Think they have mixed up acl and wasps.


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

Don't know. Someone on their forum said the prospectus for this bond said ACL was a financial basket case near to bankruptcy - wasps did lose only £400,000

 

[Noggin]

Avoid? What, the Wasps Evening Telegraph told me it was an attractive investment. How do I get my money back? I just put in £100k

The telegraphs comments arn't that different to the Times comments. I agree with the Times that there are other investments with similar reward and less risk, though the suggestion that investing in pharma and tobacco stocks is much less risk is complete nonsense, less chance of losing it all probably but a much much higher chance of losing say 30% (don't get me wrong I'm not saying the wasps bonds are better than pharma and tobacco stocks, I own multiple of both and have no intention of owning a wasps bond, but the risk isn't less though the potential reward is greater). I'm surprised you guys are pleased with the Times comments though, you seem happy because they sum up with avoid yet they are basically saying that it it's a good return and it will almost certainly work out it's just that you can get even more certainty elsewhere.

 

[Moff]

I'm surprised you guys are pleased with the Times comments though, you seem happy because they sum up with avoid yet they are basically saying that it it's a good return and it will almost certainly work out it's just that you can get even more certainty elsewhere.

I am certainly not pleased with the Times comments, and would have been far happier if they were talking about wasps in dire financial trouble.

As it is, avoid seems they best advice. I also invest and wouldnt touch this one. As for certainly working out, I wouldnt be so sure that in 6 or 7 years time that wasps position will be very certain at all.

 

[oldskyblue58]

Don't know. Someone on their forum said the prospectus for this bond said ACL was a financial basket case near to bankruptcy - wasps did lose only £400,000

Don't think they are reading the prospectus properly G

The unaudited figures since the last published accounts in the prospectus show

Wasps Holdings losing £2,053,054 (6 months to 31/12/14)

and

ACL losing £497,058 (6 months to 30/11/14)

 

[lordsummerisle]

Seems that more than a few "financial experts" are under a misapprenhension that could cost investors(and their readers) money.

This from a Telegraph "Personal Finance" expert.

This is the second reassuring aspect of the Wasps bonds - the security offered. If the club is unable to pay bondholders what they are due, the stadium will be sold to raise the money to pay them back. This is a solid asset, although of course one cannot say for sure how much it might fetch in the future if it had to be sold. It has been valued by Strutt & Parker, the estate agent, at £48.5m, more than the maximum of £35m that the bond issue will raise.

Seems to be the consensus from most finance pages, sure CCC would have something to say about it..

 

[Nick]

Have you got a link?

 

[lordsummerisle]

Here you go!

http://www.telegraph.co.uk/finance/.../11566692/Wasps-bond-pays-6.5pc-interest.html


Guardian can't get it right either:

http://www.theguardian.com/money/2015/apr/28/wasps-fans-retail-bond-rugby-club-debts

 

[chiefdave]

Why are the CT not all over this? The prospectus claims the investment is secured against the Ricoh but unless something we don't know about has happened Wasps don't own that. Surely they can't just make a clearly false claim like that and not be questioned. Let alone the implications for misleading potential investors.

 

[Nick]

Maybe they do secretly own the ricoh now?

Nobody really seems arsed about digging

 

[oldskyblue58]

What the prospectus actually says is that part of the security given is ACL's interest in the stadium. That interest is of course the long leasehold interest - something also made very clear in the prospectus and the valuation disclosed.

Clearly some of these financial experts do not read properly..... mind you the prospectus is 276 pages so its perhaps understandable given print deadlines etc

 

[oldskyblue58]

the security as detailed in the prospectus

"The security includes a legal mortgage (explained in more detail below) granted by ACL and ACL2006 over their title to the Arena in Coventry, a mortgage over the whole share capital of ACL, a mortgage over the whole share capital of ACL2006, fixed charges over insurance policies held by ACL and ACL2006 in respect of the Arena, a fixed charge over a cash account (described in more detail below) (the “Interest Service Reserve Account”) to be opened by the Issuer on or prior to the Issue Date, and a floating charge over all of the other undertaking and assets, both present and future, of each of the Issuer, the Guarantors and ACL2006. In addition, if the “P-Shares” (as defined below), held by Wasps Holdings are ever sold prior to the maturity date of the Bonds, then the cash proceeds of the sale at such time are required to be paid into a designated bank account opened by Wasps Holdings with the Account Bank and secured by way of a fixed charge for the benefit of the Trustee, the paying agents under the Bonds, the Account Bank and the Bondholders."

the valuation disclosed in the prospectus

The valuation of the Arena given by Strutt & Parker for the long leasehold interest as at 23 April 2015 is £48,500,000.

A Prospectus is a legal document and because of the nature of these bonds and how they are to be traded need to comply with LSE regulations.

 

[chiefdave]

What the prospectus actually says is that part of the security given is ACL's interest in the stadium. That interest is of course the long leasehold interest - something also made very clear in the prospectus and the valuation disclosed.

Clearly some of these financial experts do not read properly..... mind you the prospectus is 276 pages so its perhaps understandable given print deadlines etc

If it is the case that the information buried in a 276 page prospectus is correct yet the summary on their website states "The Bonds will be secured over Wasps Holdings and Arena Coventry Limited, including the Ricoh Arena" I would suggest they are attempting to mislead to make the security sound greater than it actually is.

 

[oldskyblue58]

what is really misleading about that? It is secured by all the assets of ACL which includes a 250 year long lease on the stadium plus certain assets of Wasps Holdings which includes their shares in ACL and the proceeds of any P share disposal. No one else can operate from the Ricoh without Wasps Holdings approval for the next 250 years can they?

 

[chiefdave]

If I read that the bond was secured against the Ricoh Arena I would assume ownership, I don't think I'm the only way that would think that.

There's no way, if I was trying to raise funding against one of my businesses, I would say it was secured against the premises if all I had was a lease that would revert to the freeholder should an insolvency event occur.

What security will the Ricoh be if Wasps are in financial trouble and can't meet their commitments? At that point wouldn't they be looking at administration and the lease reverting to CCC?

 

[oldskyblue58]

so no business would ever secure finance against a long lease then? No finance would ever be provided without a cast iron guarantee of not going bust?

It is easy to pick on a few words in isolation. The prospectus , which is the legal offer document, makes clear what is on offer, what the risks are, what the security is and its current value, and what happens in the event of failure etc.

The press announcement might not be to your liking but it isn't incorrect. The Ricoh will be subject to a mortgage secured on the Wasps/ACL title to it, that title remains for the next 250 years. For the next 250 years the Ricoh effectively belongs to Wasps

 

[chiefdave]

so no business would ever secure finance against a long lease then? No finance would ever be provided without a cast iron guarantee of not going bust?

That's not what I mean. Maybe I'm not explaining it right. Lets say Wasps owned the freehold and the lease, I would say that was a much greater level of security than just owning the lease. I would expect the lease to revert to the freeholder should Wasps, for example, enter administration. How much security is it then? I would say none at all. Therefore suggesting that the bonds are secured against the Ricoh suggests a higher level of security than actually exists.

It is easy to pick on a few words in isolation. The prospectus , which is the legal offer document, makes clear what is on offer, what the risks are, what the security is and its current value, and what happens in the event of failure etc.

I'm not picking out a few words. Wasps have a summary at wasps.co.uk/bonds/secured-bonds, I would suggest that the average Wasps fan, or indeed anyone at all, who read that would assume Wasps own the Ricoh and can sell it should the need arise in order to ensure the investors get their money.

The press announcement might not be to your liking but it isn't incorrect. The Ricoh will be subject to a mortgage secured on the Wasps/ACL title to it, that title remains for the next 250 years. For the next 250 years the Ricoh effectively belongs to Wasps

Clearly I'm not the only one reading it as securing against the building itself which Wasps can then sell. The pieces from 'experts' quoted on this thread have said the same thing. We have a lot of knowledge of the history and therefore what it is exactly Wasps have, most other people don't have that and will take things at face value.

To me its simple, if it says Ricoh Arena lease it is correct, if it says Ricoh Arena it is misleading.

 

[duffer]

so no business would ever secure finance against a long lease then? No finance would ever be provided without a cast iron guarantee of not going bust?

It is easy to pick on a few words in isolation. The prospectus , which is the legal offer document, makes clear what is on offer, what the risks are, what the security is and its current value, and what happens in the event of failure etc.

The press announcement might not be to your liking but it isn't incorrect. The Ricoh will be subject to a mortgage secured on the Wasps/ACL title to it, that title remains for the next 250 years. For the next 250 years the Ricoh effectively belongs to Wasps

Not often that I'd disagree with you OSB, but the Ricoh leasehold belongs to ACL, and if ACL go bust the lease reverts to the council, doesn't it?

In other words, if you bought a bond and and ACL failed for any reason (most likely Wasps going under), the Ricoh Arena itself could not be sold to realise funds and repay bondholders.

The leasehold would then revert to CCC, to sell to another third-party at that point, presumably - so the leasehold itself would no longer belong to ACL.

In essence, in my simple world, you can't offer security against going bust against the very thing you'd lose if you went bust. If I've misunderstood please feel free to clarify...

 

[albatross]

Not often that I'd disagree with you OSB, but the Ricoh leasehold belongs to ACL, and if ACL go bust the lease reverts to the council, doesn't it?

In other words, if you bought a bond and and ACL failed for any reason (most likely Wasps going under), the Ricoh Arena itself could not be sold to realise funds and repay bondholders.

The leasehold would then revert to CCC, to sell to another third-party at that point, presumably - so the leasehold itself would no longer belong to ACL.

In essence, in my simple world, you can't offer security against going bust against the very thing you'd lose if you went bust. If I've misunderstood please feel free to clarify...

No the first call will be to the creditors who have a charge over any assets at that time (so if any bonds etc are sold on) so If it goes wrong then ACL, the lease and all assets secured against any monies owed will revert to the creditors not CCC, who at that point will most likely have no financial call on the lease as their monies would probably have been paid off in Full.

 

[chiefdave]

That would be very unusual . Every commercial lease I've ever had has reverted to the freeholder in the event of my company going into administration or any other insolvency event and has had restrictions preventing the lease being sold, even as part of the company the lease was initially sold to, without the freeholders permission.

I know CCC take some stick on here but even they can't be stupid enough not to have put such a clause in.