Has this ever been explained (2 Viewers)

dongonzalos · Jul 22, 2013

In interviews with Mr Fisher by the CET or CWR.

Has he ever been pressed to satisfactorily explain this......

Originally Posted by Godiva

Then I am very, very naive ... but you knew that already, so that's not exactly breaking news.

As most of the new stadium costs are covered by selling off land, leases and mortgages a potential buyer won't have to table £100m. They will take over the loans/mortgages and pay sisu what they expect is a fair return on their investments. That may be around £40m and if the club and stadium are making progres and turn a collective profit of around £4-5m there will be buyers prepared to pay that.

At the moment SISU claim to have pumped in 45 million.

We are in debt prior to this for 30 million. Which has not been wiped away. It resurfaced as you are all aware.

Building a new stadium by what ever mechanics be it loan mortgage etc cost 30 million.

It would take at least the 5 years with SISU making further loses at a rough generous guess costing 10 million.

Mr Fisher says they do want to sell but only at the height of the business cycle.
So this is their apparent new end game.

If someone buys the club they would have to prepared to take on about 60 million in debt/loans/mortgages on top of giving SISU approximately 50 million.

That will leave SISU at break even point.

All guesstimates.

Will someone pay 50 million for CCFC and take on 60 million debt on top?

Godiva · Jul 22, 2013

dongonzalos said:
In interviews with Mr Fisher by the CET or CWR.

Has he ever been pressed to satisfactorily explain this......

At the moment SISU claim to have pumped in 45 million.

We are in debt prior to this for 30 million. Which has not been wiped away. It resurfaced as you are all aware.

Building a new stadium by what ever mechanics be it loan mortgage etc cost 30 million.

It would take at least the 5 years with SISU making further loses at a rough generous guess costing 10 million.

Mr Fisher says they do want to sell but only at the height of the business cycle.
So this is their apparent new end game.

If someone buys the club they would have to prepared to take on about 60 million in debt/loans/mortgages on top of giving SISU approximately 50 million.

That will leave SISU at break even point.

All guesstimates.

Will someone pay 50 million for CCFC and take on 60 million debt on top?

As I said in the post you quote - that depends on the total business delivering a profit that enables a buyer to expect a return on his investment.

dongonzalos · Jul 22, 2013

Godiva said:
As I said in the post you quote - that depends on the total business delivering a profit that enables a buyer to expect a return on his investment.

Sorry didn't intend to include your post that led to my post.

Can you see someone paying those figures?

dongonzalos · Jul 22, 2013

Have you ever heard Mr Fisher explain this?
This is the absolute crux of his new plan so he should be able to explain it with absolute ease and confidence.

Otherwise you would not take this route.

Jack Griffin · Jul 22, 2013

If it was so simple to sell off land, leases and mortgages then why hasn't the remaining land bank on the Arena site been sold for development?

Just what is the value of land in & around Coventry? Are there any prime sites, look at Ansty that was supposed to be developed prior to 2000 & there is still only partially developed.

Godiva, who are the customers for this, what will they pay & what will they use the land they buy for.. you seem convinced therefore I assume you have some facts to back up the argument, so what are they?

DazzleTommyDazzle · Jul 22, 2013

Godiva said:
As I said in the post you quote - that depends on the total business delivering a profit that enables a buyer to expect a return on his investment.

So a decent multiple of EBITDA would be perhaps 10 (although given the risky nature of football clubs, you could argue that might be a bit rich) and, in this speculation, we're looking for SISU to get a return on their current "investment", plus the losses over the Northampton years plus the debt on the new stadium.

That lot has got to conservatively equal £80m (?), so we'd need an EBITDA of £8m plus to support the price.

Can you see that happening?

Godiva · Jul 22, 2013

DazzleTommyDazzle said:
So a decent multiple of EBITDA would be perhaps 10 (although given the risky nature of football clubs, you could argue that might be a bit rich) and, in this speculation, we're looking for SISU to get a return on their current "investment", plus the losses over the Northampton years plus the debt on the new stadium.

That lot has got to conservatively equal £80m (?), so we'd need an EBITDA of £8m plus to support the price.

Can you see that happening?

A new buyer will only buy the shares and therby acquire the club and stadium.
The morgages and other debts will be taken over.
The value of the shares will depend on the assets covering the liabillities and the potential profit going forward.

A future yearly profit of £4m-£5m require the club to be at least at the top of the Championship.

Yes, I can see that happening in 5-7 years.
Fisher mentioned 10 years at the forums.

fernandopartridge · Jul 22, 2013

Oh look, I'm starting yet another thread as I am so original in thought that it couldn't possibly be added as part of the other conversations on the same subject.

DazzleTommyDazzle · Jul 22, 2013

Godiva said:
A new buyer will only buy the shares and therby acquire the club and stadium.
The morgages and other debts will be taken over.
The value of the shares will depend on the assets covering the liabillities and the potential profit going forward.

A future yearly profit of £4m-£5m require the club to be at least at the top of the Championship.

Yes, I can see that happening in 5-7 years.
Fisher mentioned 10 years at the forums.

Yes - but if as part of buying the shares, the buyer agrees to take on the debts (as opposed to the other option, of the seller taking them over and paying them off out of the proceeds) then the price of the shares will be reduced by the value of that debt.

So if the EBITDA is your £5m and the multiple is agreed at 10 and there will be (say) £40m of debt left in the company, then the seller will receive £10m for the shares (i.e. (£5m x 10) - £40m).

So I'm afraid that if SISU want to get the debt repaid and get a return on their current "investment" and get back the Northampton losses, they'd have to get the profits up a bit more.

singers_pore · Jul 22, 2013

Godiva said:
A future yearly profit of £4m-£5m require the club to be at least at the top of the Championship.

Yes, I can see that happening in 5-7 years.
Fisher mentioned 10 years at the forums.

You're living in cloud cuckoo land.ointlaugh:

duffer · Jul 22, 2013

DazzleTommyDazzle said:
Yes - but if as part of buying the shares, the buyer agrees to take on the debts (as opposed to the other option, of the seller taking them over and paying them off out of the proceeds) then the price of the shares will be reduced by the value of that debt.

So if the EBITDA is your £5m and the multiple is agreed at 10 and there will be (say) £40m of debt left in the company, then the seller will receive £10m for the shares (i.e. (£5m x 10) - £40m).

So I'm afraid that if SISU want to get the debt repaid and get a return on their current "investment" and get back the Northampton losses, they'd have to get the profits up a bit more.

It's just completely implausible, isn't it.

A business that has accumulated £60m of debt, never turned a profit, that will lose even more money over the next five years and alienate a large proportion of it's customers, and will need to take on further debt to develop a new (smaller) stadium, will suddenly become a cash cow?

I think the technical term for this is 'bonkers'.

shy_tall_knight · Jul 22, 2013

I think the plan is to distress ACL or the fans to such an extent that either they get the stadium on the cheap or some white knight comes riding in with a big cheque to pay them off. They have no chance of getting the stadium cheap local government / charities legislation should probably prevent this. Next stage the fans move it to Northampton enrage the city, the fans footi fans in general - may lead to some benevolent millionaire paying them off.

Their past cash injections are sunk, they will run it at breakeven regardless on the impact on the league position. New stadium is pie in the sky but we know how important pies are to SISU.

lordsummerisle · Jul 22, 2013

Jack Griffin said:
If it was so simple to sell off land, leases and mortgages then why hasn't the remaining land bank on the Arena site been sold for development?

Just what is the value of land in & around Coventry? Are there any prime sites, look at Ansty that was supposed to be developed prior to 2000 & there is still only partially developed.

Godiva, who are the customers for this, what will they pay & what will they use the land they buy for.. you seem convinced therefore I assume you have some facts to back up the argument, so what are they?

PWKH seems to think that we could have hotels built on the land, and in fact a prerequisite to anybody from CCFC buying ACL is that they will commit to redevelopment.

Ridiculous i know, nothing to stop hotels or anything else being built on the land in the last 10 years or so, why should it be the responsibility of any owner of the club to do so when the council and ACL haven't?

Nonleagueherewecome · Jul 22, 2013

fernandopartridge said:
Oh look, I'm starting yet another thread as I am so original in thought that it couldn't possibly be added as part of the other conversations on the same subject.

The Penguin · Jul 22, 2013

lordsummerisle said:
PWKH seems to think that we could have hotels built on the land, and in fact a prerequisite to anybody from CCFC buying ACL is that they will commit to redevelopment.

Ridiculous i know, nothing to stop hotels or anything else being built on the land in the last 10 years or so, why should it be the responsibility of any owner of the club to do so when the council and ACL haven't?

Far as I'm concerned it should only be our responsibility if we owned the whole thing, lock, stock and barrel.

If we were only a part owner, and stood to benefit as such, I could accept being a partner but nothing more.

Buster · Jul 22, 2013

To move a major project like this ahead, you need the co-operation of various bodies. The Council and Private Enterprise working together is imperative. On top of this the idea needs to have legs in the first place, around the Ricoh their is a development area which is to be incouraged by the council. Access is good and I daresay the investment would be in every one's interest, the Football Club, the Council, the People of Coventry and the Private Retail Companies. I think the term is Mutually Beneficial.

Sisu's project involves errrr Sisu?

Jack Griffin · Jul 22, 2013

lordsummerisle said:
PWKH seems to think that we could have hotels built on the land, and in fact a prerequisite to anybody from CCFC buying ACL is that they will commit to redevelopment.

Ridiculous i know, nothing to stop hotels or anything else being built on the land in the last 10 years or so, why should it be the responsibility of any owner of the club to do so when the council and ACL haven't?

So you agree with my conclusion that it isn't easy to bring new business onto a site in the Coventry area and the SISU's statements about financing a new build through mortgages/leases for the land they haven't yet purchased doesn't make commercial sense..

dongonzalos · Jul 22, 2013

fernandopartridge said:
Oh look, I'm starting yet another thread as I am so original in thought that it couldn't possibly be added as part of the other conversations on the same subject.

Oh look I am replying sarcastically on a thread for a change.......

dongonzalos · Jul 22, 2013

DazzleTommyDazzle said:
Yes - but if as part of buying the shares, the buyer agrees to take on the debts (as opposed to the other option, of the seller taking them over and paying them off out of the proceeds) then the price of the shares will be reduced by the value of that debt.

So if the EBITDA is your £5m and the multiple is agreed at 10 and there will be (say) £40m of debt left in the company, then the seller will receive £10m for the shares (i.e. (£5m x 10) - £40m).

So I'm afraid that if SISU want to get the debt repaid and get a return on their current "investment" and get back the Northampton losses, they'd have to get the profits up a bit more.

Exactly a combined package of debts loans and mortgages to a tune of 100 million. Also after the five years if loses in Northampton.

You suggest we need to be in the top half of the championship. Which will take much greater investment.

There will be no sale point where SISU can make a return.

This is an unexplainable business plan

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Has this ever been explained (2 Viewers)

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