ACL has "net value of nil" (14 Viewers)

short and sweet.

they wont give it to sisu for free though? me thinks they dont want ccfc home.

covcity4life said:

short and sweet.

they wont give it to sisu for free though? me thinks they dont want ccfc home.

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I think you might have missed the "net" bit.

So Acl is basically worth £14m plus debt according to the council.

bigfatronssba said:

So Acl is basically worth £14m plus debt according to the council.

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... according to the accountants and the auditors, yes.

How easy will it be to replace the loan if the JR goes against CCC?

Sisu have asked for an independent valuation - now we have CCC's own valuation. Would an independent valuation be higher?

bigfatronssba said:

So Acl is basically worth £14m plus debt according to the council.

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So Sisu's offer of taking over the loan and paying Higgs something for 50% of ACL was extremely generous then?

Which is what CCC thought of the offer to Higgs too.

All seems fairly complicated especially for me but if Higgs value at £6.5 and that's 50% then I assume say for councils half so £13m ACL is valued at but overpaid £1m for the mortgage at £14m.

It's what we knew all along. Ccfc need the Ricoh and the Ricoh need ccfc. Unfortunately due to 2 pig headed business who don't trust and completely hate eachother it leaves the the actually bit we are interested in the football club without a home and soulless.

bigfatronssba said:

So Acl is basically worth £14m plus debt according to the council.

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So could Sisu buy acl for a total of 20.5 million for both halves. Also if Acl made a small operating profit as reported how could the council just net it off in the accounts a business that's making money is surely worth more. Are the council now playing the smoke and mirrors game, a 0 valuation is surely just strengthening the Sisu position for the Jr.

The club needs the ricoh and the ricoh needs the club. Simples

We need to be back at the Ricoh for 14-15 season or else is curtains for everyone.

lordsummerisle said:

So Sisu's offer of taking over the loan and paying Higgs something for 50% of ACL was extremely generous then?

Which is what CCC thought of the offer to Higgs too.

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Maybe it was the right offer with the club playing there.
Now it seems way OTT.

"It is understood the [Higgs] charity will value its stake in ACL at £6.5million according to its latest set of accounts set to be filed this week."

Which suggests 100% value = 2x£6.5m = £13m.

Assuming that the £14m loan by CCC has not been paid down to around £6.5m, if CCC accounts show a net value of Nil, does logic suggest that they will have written off the portion of the loan that exceeds the value of their shares?

One for OSB58!

I LL give them a pound for it

Somebody should tell that bloke trying to raise £3million not to set his sights too high.

Kingokings204 said:

The club needs the ricoh and the ricoh needs the club. Simples

We need to be back at the Ricoh for 14-15 season or else is curtains for everyone.

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what colour are these curtains ?

ccfcway said:

what colour are these curtains ?

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I was rather hoping they'd be beef.

Hi Simon,

thanks for posting the article.maybe you're the best person to ask on what this article means in terms of the fans and how if any relevance this is to getting ccfc back home? Yourself and OSB of course.

Thanks in advance

However recent accounts have shown ACL to be profitable and charity bosses insist nothing has changed which would cause them to re-evaluate the value of their investment in ACL.

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Wasn't the recent ACL accounts including the Olympics and the team playing there? How can they say 'nothing has changed'?

Godiva said:

Wasn't the recent ACL accounts including the Olympics and the team playing there? How can they say 'nothing has changed'?

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They didn't have National Streaking competitions then.

This is the value of the encumbered 40yr leasehold & ongoing business. So it says, they expect to break even and service the debt as things stand.

I bloody knew that Simon Gilbert would turn out to be a SISU lover :laugh:

I'm not sure this is of vast significance, except to those struggling with the concept of 'net' value.

Basically, this seems to suggest that CCC and Higgs are both saying that ACL is worth around £13-14m, unless I've misread it.

I think it means that if there was a deal to be done along the lines of Fisher's 'Roadmap', SISU would still need to find around £6m for Higgs, and £14m to buy the loan out in it's entirety. In reality I think that's much the same as it was when originally floated - the idea of buying the loan for a big discount from YB doesn't seem to have been borne out by the facts.

There is still a deal to be done here if you look at the costs of a new, smaller stadium. It makes sense, in that it would provide CCFC with access to all of the Ricoh's revenues, but it's not the sort of deal that gives SISU a quick win. Hence perhaps the JR and all of the associated tomfoolery.

duffer said:

I'm not sure this is of vast significance, except to those struggling with the concept of 'net' value.

Basically, this seems to suggest that CCC and Higgs are both saying that ACL is worth around £13-14m, unless I've misread it.

I think it means that if there was a deal to be done along the lines of Fisher's 'Roadmap', SISU would still need to find around £6m for Higgs, and £14m to buy the loan out in it's entirety.

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Think that you're saying that Sisu should pay around £20million for ACL when it's worth around £13-£14million?

lordsummerisle said:

Think that you're saying that Sisu should pay around £20million for ACL when it's worth around £13-£14million?

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Nope - but if they want ACL free and clear of debt that's what they'd need to pay. They could, in theory, buy ACL in entirety for £13-14 million, but ACL would still have to service the mortgage.

SISU's plan (Fisher's Roadmap) was to clear the mortgage, because that's the prime driver of the rent that the club pays. No mortgage, much lower rent. If they wanted to follow that plan, then they need to find around £20m - and that still leaves CCC as 50% holders of ACL, as did the original roadmap.

It wasn't a bad plan, the roadmap, imho. It would have given the club most of what it wants. The problem was the way that SISU tried to negotiate - the rent strike, the lack of security for Higgs, the unilateral approach to the bank, the concept of getting the bank loan at a distressed value, the absence of a proof of funding etc..

I think it's worth revisiting, but on a calmer more sensible footing - the problem is that I think SISU have now decided to take an even bigger punt on getting everything through the JR. Until that's done I can't see how the sides can start talking again.

lordsummerisle said:

Think that you're saying that Sisu should pay around £20million for ACL when it's worth around £13-£14million?

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classic duffer

All a little confusing

CCC....... own 100% of North Coventry Holdings Limited (NCH)....... which owns 100% of North Coventry Regeneration Limited (NCR)and 50% of ACL

Principal activity of NCR is described as the build of the Ricoh Arena
Principal activity of NCH is described as holding shares in NCR & ACL

The shares in ACL were purchased by NCH on 27/02/2004 for £1,758,056 at £1 per share. In the NCH accounts to 31/03/2005 the value of these shares were written down to £nil. Similarly the investment in NCR was written down by 31/03/08 to nil. So it looks to me that the value of the CCC investment has always been £nil as far as the CCC accounts are concerned (even before the current dispute)

That does not mean that the value of ACL as a going concern business is nil, only that CCC & NCH accounts do not carry a value because they have adopted a very prudent view of £1.758m investment, that is agreed by their auditors. (key is that the value of assets is not overstated) Can the Charity carry a value based on a different set of criteria - yes. Does that make it all confusing yes.

So the last CCC figures to 31/03/13 took the view that their investment, the loan and the uncertainties kept the net value of the investment at nil. Well that was straight after the refinance of ACL with £14m loan and in the middle of the CCFC dispute. Even without the loan or dispute the investment in ACL had been written down to nil so the new factors were never going to improve that.

Going on the comments made it seems to imply that the value is netted down by the loan to arrive at nil. Not sure how that works in terms of valuation and disclosure as they are two separate things - an investment and loan debtor. Take it at face value of what was said and that implies that 50% of ACL is worth £14m but has been netted off against the £14m loan owed by ACL (100%) to achieve nil value in the CCC accounts. The charity values its investment in 50% are more than £nil but that has no impact at all on the CCC accounts at all.

As a long term unquoted investment in a joint venture do they actually have to include a current value of ACL every year? They do have to include a statement to give details of net assets and profits of ACL - and do in the NCH accounts

The question I have in the CCC not valuing NCH and thereby the share in ACL is the following

Is the nil valuation an indication that the CCC have no interest in selling its 50% share interest in the project at all? ......... No expectation of sale or a return or income, then you might just say the value of investment in the CCC accounts should be disclosed as £nil.

Talk of independent valuations and averaging etc are a little pointless if there is no expectation or no need to sell is felt.

The disclosure was also based on a valuation report that was done prior to the CCC 2012/13 accounts being signed off ...... have things changed since then?

So before we get all excited that ACL is worth nil, that is not what was actually said. What is actually said is that the value of the investment in NCH which owns 50% of ACL is in the opinion of CCC and its auditors written down to nil in the CCC annual financial reports. This does not give a sale value of ACL

duffer said:

Nope - but if they want ACL free and clear of debt that's what they'd need to pay. They could, in theory, buy ACL in entirety for £13-14 million, but ACL would still have to service the mortgage.

SISU's plan (Fisher's Roadmap) was to clear the mortgage, because that's the prime driver of the rent that the club pays. No mortgage, much lower rent. If they wanted to follow that plan, then they need to find around £20m - and that still leaves CCC as 50% holders of ACL, as did the original roadmap.

It wasn't a bad plan, the roadmap, imho. It would have given the club most of what it wants. The problem was the way that SISU tried to negotiate - the rent strike, the lack of security for Higgs, the unilateral approach to the bank, the concept of getting the bank loan at a distressed value, the absence of a proof of funding etc..

I think it's worth revisiting, but on a calmer more sensible footing - the problem is that I think SISU have now decided to take an even bigger punt on getting everything through the JR. Until that's done I can't see how the sides can start talking again.

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Think that you are misunderstanding and valuing ACL at the same value of the mortgage and then adding them together to come up with a totally wrong figure.

covcity4life said:

short and sweet.

they wont give it to sisu for free though? me thinks they dont want ccfc home.

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Read it before making an ill informed comment :facepalm:

lordsummerisle said:

Think that you are misunderstanding and valuing ACL at the same value of the mortgage and then adding them together to come up with a totally wrong figure.

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Politely, I don't know how I could make it more clear. You could buy ACL, in theory, for £14m. The mortgage would still exist.

You could, in theory, buy the mortgage for £14m. That doesn't give you ownership of ACL, just the debt that they hold.

If you want ACL and the mortgage cleared down you have to buy ACL *and* the mortgage. I suggest you have a read of the roadmap as published in the court transcripts or the SISU skeleton argument, it's really what Fisher was saying.

italiahorse said:

Read it before making an ill informed comment :facepalm:

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no .

lordsummerisle said:

Think that you are misunderstanding and valuing ACL at the same value of the mortgage and then adding them together to come up with a totally wrong figure.

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It can be twisted a few ways. If CCC see their 50% share worth the value of the loan don't that make the other 50% also worth 14m?

The next problem is that Joy says she only wants the unencumbered freehold. The value of ACL, however much it is, has nothing to do with the value of the freehold. And to get the unencumbered freehold two of the things needed to be paid off are the loan and Higgs. Then there is more.

If SISU go down the route of buying out ACL they will only be back to where they were on the so called road map. And they didn't want to pay for it then and have made more losses since, so will still hold out for the unencumbered freehold which will be hard to get.

chiefdave said:

I bloody knew that Simon Gilbert would turn out to be a SISU lover :laugh:

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Bloody turn coat. That's what he is. ;-)

covcity4life said:

no .

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Get someone else to read it too you.
If you can't understand it there are a lot of helpful and intelligent people on this board.

italiahorse said:

Get someone else to read it too you.
If you can't understand it there are a lot of helpful and intelligent people on this board.

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I'll take that as a compliment!!! Thanks! LOL!

duffer said:

Politely, I don't know how I could make it more clear. You could buy ACL, in theory, for £14m. The mortgage would still exist.

You could, in theory, buy the mortgage for £14m. That doesn't give you ownership of ACL, just the debt that they hold.

If you want ACL and the mortgage cleared down you have to buy ACL *and* the mortgage. I suggest you have a read of the roadmap as published in the court transcripts or the SISU skeleton argument, it's really what Fisher was saying.

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The CCC valuation is of the entirety of ACL, they give it a nett value of nil, which would value ACL at £14million minus mortgage of £14million.

Therfore if somebody took on the mortgage and paid "full value" for ACL as a business then the only cost would be the mortgage.

You are basically saying that ACL is worth £28million, adding the "value" of ACL to the cost of the mortgage.