Butts Park Arena is new home (22 Viewers)

Nick said:

Even top people at ACL / Council were saying it was way over it's worth.

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A couple out of how many?

So a stadium for 11m and debt of 14.4m with everything that came with it and a lease that by law would have been extended not worth it?

What could we get for 25m including purchase of land?

Astute said:

A couple out of how many?

So a stadium for 11m and debt of 14.4m with everything that came with it and a lease that by law would have been extended not worth it?

What could we get for 25m including purchase of land?

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If the couple of them are directors there, then that's enough.

stupot07 said:

I don't know that's what OSB wrote in his post above.




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

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You took what he said and used it in another way.

17.5m would be needed to pay debt off if we got 50% of ACL. But you also quoted OSB on saying that the debt taken on by Wasps on the purchase of ACL shouldn't count.

What I am saying is that the repayment of the ACL debt should either count for both sides or not. The big problem is that the ACL debt is much higher now.

I was more implying with hindsight we appear to have been priced out of buying a share/the whole lot throughout our whole time there. That is with the info we are aware of. The quoted 24m for revenue access etc etc. Therefore any serious offer was never likely to succeed, if one had been made with any level of conviction.

Sorry I am not sure I made it clear why I said £17m. (it is all guess work in any case)

It has nothing to do with past share sales or loans from YB/CCC

The question I was asked was about a 50% share sale now by Wasps. Those shares are linked to the bonds that were issued, there is a charge over them. Wasps raised £34m from the bonds, so say the shareholding is reduced by 50% because they sell half the shares it is quite likely the bond holder trustees would seek to reduce the amount they have at risk £34m by 50% also ie £17m. This would mean unless other security was offered, that £17m would need to be paid back. Wasps would need to find the money from somewhere and wouldn't, I would think, want to take a hit just to get CCFC on board. That indicates in that situation that the sale of 50% would need to raise £17m to be able to repay the bonds secured on the shares. In effect sets a minimum value for a sale of 50% of the shares

In any case a 50% share sale would not make sense because that is expecting Wasps to give up simple control of the company - wont happen imo

Hope that explains it better

I have to say the minute the new landlords piled debt onto ACL and the complex a wry little smile played across my full lips. I remembered Mutton and his pathetic little posturings and thought "Ha, fuck you!"

Childish, I know.

Nick said:

Even top people at ACL / Council were saying it was way over it's worth.

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Facts

Richard Ellis later performed a sensitivity analysis, whichindicated that, if the anchor tenant rent was nil, the value of the lease would be only£6.4m; at £200,000 rent, £8.6m; and, at £400,000 rent, £10.8m.

Lot of confusion about valuations

The 5.5m that was agreed subject to due diligence was what AEHC was willing to accept from SISU for their 50 % interest in ACL. It is a negotiated figure that SISU agreed to pay and AEHC agreed to accept. As it turned out SISU decided the shareholding was worthless, is that because of due diligence or to put pressure on?. You wouldn't expect a buyer to over value would you?. And yet they then verbally offered 2m for 50% of the shares that in itself is another valuation.

When the deal with CCC and AEHC was done the balance sheet of ACL minus any Wasps involvement or for that matter CCFC involvement (a 2+2 day rental agreement adds very little value) was around £6m (that again is a form of valuation) Wasps paid £5.77m with a few on going add on's. The ACL valuation of the lease they had was around £18m which is included in the balance sheet value of £6m above. To be clear when you buy shares then you buy in to the assets and liabilities in total - you do not get to pick and choose.

Wasps then had the long lease valued at 45m. That again forms part of the balance sheet value of ACL it is not the value of ACL. Because Wasps had tied their future to the business then independent professional and respected valuers were able to give the London Stock Exchange an opinion that the Long Lease was worth much more than the shorter original lease was. In valuation terms the long lease is viewed pretty much as freehold the original lease under 50 years is not.

If you do a detailed time line of the facts then the heads of terms that SISU agreed with CCC in August 2012 was flawed because by October 2012 there was no prospect of a deal with AEHC and that share purchase was an integral part of those August heads of terms. So the prospect of a deal in December 2012 was? Also in December 2012 CCC made it clear their shares were not for sale at that time. After that did SISU make any offer to purchase? Did they want to? Were they blocked? Was there double dealing going on? or was it both sides had a legal right to have a plan B and both had - guess we will wait see on that one? Did AEHC or CCC say their shares were available make me an offer?

A week or so before the SISU made a bid for the AEHC shares in 2014 they said they were not interested. They then make a bid via the administrator that we don't have the details of except for some community initiatives that the Charity were not interested in being a partner to. For the charity I would guess a clean break was very attractive being tied in to projects with SISU was not - perhaps understandably. Was it really a serious offer or one to say we tried - I am sure we all have our own opinions on that. But again their own bid put a value on the Charity shares of £2.77m.

Valuations are opinions at a specific time for a specific purpose based on certain criteria that change with the purpose. They will vary. They may or may not form part of something that is valued in another manner/purpose at a much lower amount.

torchomatic said:

I have to say the minute the new landlords piled debt onto ACL and the complex a wry little smile played across my full lips. I remembered Mutton and his pathetic little posturings and thought "Ha, fuck you!"

Childish, I know.

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Difference being Mutton thought SISU would sell with the unencumberd freehold and them vanish.Wasps don't own the freehold and, as of yet haven't vanished. Yes it is childish of you.

One had a moral obligation to not let the sporting teams of it's City down, despite most of said City not liking the owners of the football team. There was a bigger picture than just a dislike of a person/people.

This is not a go at you OSB58. Out of curisoity you were talking of Wasps spreading the risk of their investment between ACL and it's operations. How have Wasps approached it differently to ACL? What have they done differently to ACL to enable the burden to be shared amongst the complex rather than just the stadium bowl?

Ah, "the difference is..." eh? Mutton thought, Mutton didn't know. And the old "SISU would vanish" argument is pretty desperate even for you.

Still, I wouldn't expect any less of you. There was lots of fear spreading when certain posters thought CCFC were going to get hold of the Arena.

martcov said:

Difference being Mutton thought SISU would sell with the unencumberd freehold and them vanish.Wasps don't own the freehold and, as of yet haven't vanished. Yes it is childish of you.

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torchomatic said:

Ah, "the difference is..." eh? Mutton thought, Mutton didn't know. And the old "SISU would vanish" argument is pretty desperate even for you.

Still, I wouldn't expect any less of you. There was lots of fear spreading when certain posters thought CCFC were going to get hold of the Arena.

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CCFC were never going to get the Ricoh. At "best" SISU would have got it. But you equate SISU with CCFC. I don't.

SkyBlueZack said:

One had a moral obligation to not let the sporting teams of it's City down, despite most of said City not liking the owners of the football team. There was a bigger picture than just a dislike of a person/people.

This is not a go at you OSB58. Out of curisoity you were talking of Wasps spreading the risk of their investment between ACL and it's operations. How have Wasps approached it differently to ACL? What have they done differently to ACL to enable the burden to be shared amongst the complex rather than just the stadium bowl?

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No problem any one asking reasonable or reasoned questions Zack I took it in the manner you intended - its snide comments and untruths aimed in my direction I take exception to

You could argue that the custodians of the club (the owners) had the biggest moral obligations to its supporters and sporting public. Not a defence of CCC because they have made some horrendous mistakes in dealing with CCFC and ACL but this breakdown took 7 years surely it was not beyond the wit of man to find a reasonable compromise. Both as bad as each other.

As for spreading the risk. Take the Bonds. That moved the debt away from one single person and the CCC to spreading amongst many investors and deferred capital repayments

I would think that there has been plenty of operational savings and duplication of roles have been removed

They have done a new deal with Compass who are shareholders and security holders

They have looked to increase the income from other areas. eg the Rhianna concert but the prospectus talks of major sponsors committing to holding two or three events per year. They are no longer dependent on Rugby income

Its all basic stuff to ground a business then build it. It could all have been ours - that's the crying shame of it

Whilst they own us, of course. But whether it was SISU or whether it was anyone else who owned us "CCFC" would never have ownership of its own stadium it would always be a management company or off shoot of owner.

And, as I said, a lot of fear and rumour was spread as fact that SISU would mortgage the stadium then take all the money and knock the place down, etc etc. That's why I went "ha!" when Wasps did just that...showed Mutton up for the idiot he is.

martcov said:

CCFC were never going to get the Ricoh. At "best" SISU would have got it. But you equate SISU with CCFC. I don't.

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torchomatic said:

Still, I wouldn't expect any less of you. There was lots of fear spreading when certain posters thought CCFC were going to get hold of the Arena.

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But as you know Torch there were people who are always posting about CCC that were worried about SISU getting the arena. Nobody knew that they would let someone like Wasps have it although the risk was always there. And whenever I mentioned the risk of someone else coming in for it the matter was normally laughed off at best.

And it wasn't CCFC but SISU that was the risk. And it was the risk of them doing what Wasps have done. So as you can see it was a realistic worry to have.

I would still rather have the owners of CCFC having control of the Arena with CCFC badges alone than with a team who have zero affinity with the area. But maybe I'm alone in having that point of view. Mainly because if SISU controlled the Arena then there would be a hell of a better chance of them selling up and leaving as they would have something to sell; and there would be no talk of having to move and find another home; which I have to say I agree with.

Like I said I'm pleased in a way it's happened as it shows Mutton up...and...those who said "anyone but SISU". All those begging letters hindered not helped.

Astute said:

But as you know Torch there were people who are always posting about CCC that were worried about SISU getting the arena. Nobody knew that they would let someone like Wasps have it although the risk was always there. And whenever I mentioned the risk of someone else coming in for it the matter was normally laughed off at best.

And it wasn't CCFC but SISU that was the risk. And it was the risk of them doing what Wasps have done. So as you can see it was a realistic worry to have.

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torchomatic said:

I would still rather have the owners of CCFC having control of the Arena with CCFC badges alone than with a team who have zero affinity with the area. But maybe I'm alone in having that point of view. Mainly because if SISU controlled the Arena then there would be a hell of a better chance of them selling up and leaving as they would have something to sell; and there would be no talk of having to move and find another home; which I have to say I agree with.

Like I said I'm pleased in a way it's happened as it shows Mutton up...and...those who said "anyone but SISU". All those begging letters hindered not helped.

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But who has said that they preferred Wasps than SISU to have it?

I would have preferred neither to have it. CCC should have kept it until it was safe for our club to have it.

Yes, that was always my preferred option too. CCC have a problem with SISU, fair enough; so keep hold of the "community asset", the complex that was really successful for the City of Coventry. They'd had it for ten years so they could keep it for another ten rather than just selling it to the first team who knocked on their door. That decision - along with SISUs contribution to all this - has hamstrung the club for many, many years to come.

You're right, no one said "sell it to Wasps", but many did say "anyone but SISU", so they got what they wanted.

Astute said:

But who has said that they preferred Wasps than SISU to have it?

I would have preferred neither to have it. CCC should have kept it until it was safe for our club to have it.

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Who in their right mind would allow Sisu to have a foothold in the Arena ?
An unscrupulous hedge fund that used 'our' football team in an attempt to get the Ricoh freehold.
If CCFC had 'any' different owner we would be established at the Ricoh now.

Astute said:

But who has said that they preferred Wasps than SISU to have it?
I would have preferred neither to have it. CCC should have kept it until it was safe for our club to have it.

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But if they say they can't afford it and don't want it and are building a new stadium outside Coventry, how would you manage that ?

What council in their right mind would let a team from 85 miles away have it? What council would cry "they're not having it as they will mortgage it and load debt on to it" and give it to someone who did just that within a few months of getting it?

italiahorse said:

Who in their right mind would allow Sisu to have a foothold in the Arena ?
An unscrupulous hedge fund that used 'our' football team in an attempt to get the Ricoh freehold.
If CCFC had 'any' different owner we would be established at the Ricoh now.

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torchomatic said:

Ah, "the difference is..." eh? Mutton thought, Mutton didn't know. And the old "SISU would vanish" argument is pretty desperate even for you.

Still, I wouldn't expect any less of you. There was lots of fear spreading when certain posters thought CCFC were going to get hold of the Arena.

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italiahorse said:

Who in their right mind would allow Sisu to have a foothold in the Arena ?
An unscrupulous hedge fund that used 'our' football team in an attempt to get the Ricoh freehold.
If CCFC had 'any' different owner we would be established at the Ricoh now.

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Wasps went for the lease - not the freehold. Wasps played soft ball. SISU played hard ball.

martcov said:

Wasps went for the lease - not the freehold. Wasps played soft ball. SISU played hard ball.

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Did it come out of the ethics meeting that SISU were happy with a 125 year lease and didn't insist on the freehold?

torchomatic said:

Yes, that was always my preferred option too. CCC have a problem with SISU, fair enough; so keep hold of the "community asset", the complex that was really successful for the City of Coventry. They'd had it for ten years so they could keep it for another ten rather than just selling it to the first team who knocked on their door. That decision - along with SISUs contribution to all this - has hamstrung the club for many, many years to come.

You're right, no one said "sell it to Wasps", but many did say "anyone but SISU", so they got what they wanted.

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Would be interesting to know what the Coventry ratepayers think of the decision ?

So, you finally admit the Council screwed a club established in the city for 130 years for a franchise because they didn't like SISU? They couldn't have waited a bit longer for a change of ownership? They were forced to give that Franchise a 250 lease, were they? SISU asked for half of that and were turned down.

martcov said:

Wasps went for the lease - not the freehold. Wasps played soft ball. SISU played hard ball.

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I doubt they care. Only CCFC fans - well, some of them - will.

italiahorse said:

Would be interesting to know what the Coventry ratepayers think of the decision ?

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italiahorse said:

Who in their right mind would allow Sisu to have a foothold in the Arena ?
An unscrupulous hedge fund that used 'our' football team in an attempt to get the Ricoh freehold.
If CCFC had 'any' different owner we would be established at the Ricoh now.

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Not like the unscrupulous hedge fund, run by an irish property investor, who has used a rugby union team to get hold of a long lease at the Ricoh which is effectively a freehold.

I would have preferred the council to keep hold of it as I didn't trust Sisu with it, but surely the council should have had something in the contract with the insects to say that it couldn't be mortgaged off.

It's a bit late now to be worrying about what the tax/rate payers of Coventry think plus the elected people there don't care about the voters if they did would they have joined up with Birmingham?

Terry Gibson's perm said:

I would have preferred the council to keep hold of it as I didn't trust Sisu with it, but surely the council should have had something in the contract with the insects to say that it couldn't be mortgaged off.

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That was my suggestion if they did sell to SISU. Can't believe they've sold it to Wasps and then let them use it as security on tens of millions of debt.

I think that's the point Italia and Mart have missed. It's OK saying "it's not a freehold" when well...a lease of 250 years...is effectively just that.

Anyone but SISU, eh?

fernandopartridge said:

Not like the unscrupulous hedge fund, run by an irish property investor, who has used a rugby union team to get hold of a long lease at the Ricoh which is effectively a freehold.

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Anyone but SISU, Dave. Anyone but SISU.

chiefdave said:

That was my suggestion if they did sell to SISU. Can't believe they've sold it to Wasps and then let them use it as security on tens of millions of debt.

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torchomatic said:

I think that's the point Italia and Mart have missed. It's OK saying "it's not a freehold" when well...a lease of 250 years...is effectively just that.

Anyone but SISU, eh?

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Joy asked for an unencumberd freehold. Totally different from a lease with conditions. Has Joy ever denied this? Has SISU said they would accept a lease with conditions? ( e.g. As with the Butts where one condition is that it has to be used for Rugby?).

oldskyblue58 said:

No problem any one asking reasonable or reasoned questions Zack I took it in the manner you intended - its snide comments and untruths aimed in my direction I take exception to

You could argue that the custodians of the club (the owners) had the biggest moral obligations to its supporters and sporting public. Not a defence of CCC because they have made some horrendous mistakes in dealing with CCFC and ACL but this breakdown took 7 years surely it was not beyond the wit of man to find a reasonable compromise. Both as bad as each other.

As for spreading the risk. Take the Bonds. That moved the debt away from one single person and the CCC to spreading amongst many investors and deferred capital repayments

I would think that there has been plenty of operational savings and duplication of roles have been removed

They have done a new deal with Compass who are shareholders and security holders

They have looked to increase the income from other areas. eg the Rhianna concert but the prospectus talks of major sponsors committing to holding two or three events per year. They are no longer dependent on Rugby income

Its all basic stuff to ground a business then build it. It could all have been ours - that's the crying shame of it

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So was the deal made with compass originally a bad deal? Or it it just a case of times have moved on, things get cheaper?

As for the Rihanna concert ACL at the beginning had concerts so in my eyes can't see that being any different unless again ACL were not pricing things correctly? Under quoting perhaps?

Part of the reason I ask is because ACL did not diversify their operations it would seem like Wasps have, this being part of the reason our rent was so high. Also because if it is as it appears and Wasps are making a go of it and don't need CCFC income. Then why didn't the council in their objection to SISU's tactics, find a top level management company and run the arena at break even/small profit? I know I'm speaking as a CCFC fan but would that not also have been in the best interests of the taxpayer? Surely a company at break even/small profit is more valuable than one washing it's face?

Finally, any idea why the initial lease was only 50 years?

chiefdave said:

Did it come out of the ethics meeting that SISU were happy with a 125 year lease and didn't insist on the freehold?

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That's what Sisu said.
Take that with a pinch of salt.

martcov said:

Joy asked for an unencumberd freehold. Totally different from a lease with conditions. Has Joy ever denied this? Has SISU said they would accept a lease with conditions? ( e.g. As with the Butts where one condition is that it has to be used for Rugby?).

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Please prove that is what she asked for. Where is the documented evidence?

While we are at it please explain what difference a 125 lease is to the freehold.