Rusty Trombone
Well-Known Member
Haven't read much about the prudential borrowing scenario so don't know, Councils can give loans to businesses though, and if they still have, and if it's still at 5%, then that appears to be at a commercial rate.
Would they now have any justification in getting a loan through prudential borrowing to then loan to a totally private company?
I bet Sisu get comfort from this thread ?
What are you on about? The point being made is CCC and Higgs repeatedly stated that ACL was profitable without CCFC, including during the period we were at Sixfields. They weren't. Yes the rent strike was ruled illegal but that's not really the point is it, statements were made that were clearly false. People on here questioned them at the time as is didn't seem to stack up that ACL could lose £1.2m a years from CCFC and be viable but apparently it wasn't obvious enough for anyone at the council to thing it was worth double checking what they were allegedly told by council officers.
In your example it would be like a housing association building a house and then claiming they didn't actually need the rent from it.
I had an almighty row with Maton about this as this is not what was voted on. He assured me at the time that the money taken from council reserves had already been replenished, the answers CCC provided to Reid state this not to be the case.
This does knock on to the local taxpayer, although we're moving into politics here. An argument is being made by some locally, noticeably Nellist, that council reserves should be used to cover this years funding shortfall, which I believe is £15m, while a campaign to have the cuts from central government is reversed. CCC have stated this is impossible as they don't have the money, why don't they have the money?
Haven't read much about the prudential borrowing scenario so don't know, Councils can give loans to businesses though, and if they still have, and if it's still at 5%, then that appears to be at a commercial rate.
Haven't read much about the prudential borrowing scenario so don't know, Councils can give loans to businesses though, and if they still have, and if it's still at 5%, then that appears to be at a commercial rate.
If it were my decision I'd keep the loan and take the £500k profit each year, that's surely better than using the whole loan balance to fund one years shortfall, you're just postponing the pain for a year.
Surely if it was that simple that message would have been relayed and Lucas would have said that. And of course that sill implies that ACL need CCFC or at least money from CCFC. What is being disputed is the claim that ACL was profitable without CCFC, it wasn't. Saying it was only if CCFC were to pay £600K is actually proving the point!
Didn't Ray Ranson say "we have no debts".
http://www.skybluestalk.co.uk/threads/6212-An-interview-with-Ray-Ranson!
Who did that interview Nick?
What about risk assessment?
Part of the problem is that CCC have allegedly stated, not particularly in regard to the Ricoh or CCFC, that they would never risk taxpayers money (as the taxpayer would have to make the repayments if the business receiving the loan failed) and therefore would not lend to a business losing money. Both Wasps and ACL are losing money.
If it were my decision I'd keep the loan and take the £500k profit each year, that's surely better than using the whole loan balance to fund one years shortfall, you're just postponing the pain for a year.
Are you deliberately missing the point? I'll ask again, simply. In what way is ACL's profitability relevant to CCFC's rent agreement?
Not 500 k profit every year though is it?
Would assume that reserves are kept in some sort of interest yielding account?
Hopefully not Icelandic! To be fair, think CCC avoided that particular one.
It's not my argument! I said exactly the same thing to Nellist when he proposed it although he did come back with a fairly comprehensive response. The gist of it was that if the cuts were overturned the £15m would be replenished from central government.
It's relevant because CCC categorically stated that the rent was not needed for ACL to be profitable, that while we were at Sixfields ACL were making a profit.
It also has an impact on the value of ACL, it's painting a false picture of the status of the company in order to artificially inflate it's value during negociations. The point being that if, when Fisher first made these claims, CCC had been honest we may (and none of us know how likely it would be) have had some open, honest and courteous negotiations.
Didn't Ray Ranson say "we have no debts".
http://www.skybluestalk.co.uk/threads/6212-An-interview-with-Ray-Ranson!
Who did that interview Nick?
Didn't Ray Ranson say "we have no debts".
There must be guidelines somewhere, although how straightforward they are is anyone's guess.
Part of the problem is that CCC have allegedly stated, not particularly in regard to the Ricoh or CCFC, that they would never risk taxpayers money (as the taxpayer would have to make the repayments if the business receiving the loan failed) and therefore would not lend to a business losing money. Both Wasps and ACL are losing money.
The obvious thing to do is for Wasps to get a commercial loan and pay back the council. While the argument can then still be made the loan shouldn't have been given in the first place the fact that it would have been paid back would somewhat mitigate that argument.
Again, why is it relevant to the rental agreement?
Anyone buying would base their valuation of the business on the value derived from the books. That's what Due Diligence is all about. Bloody hell. If you think anyone - SISU, Wasps, or Idi Amin for that matter - would base their valuation on the business on what Lucas said, as opposed to what their team of forensic accountants would tell them from the books (audited accounts and monthly management accounts for the current year), you're on a different planet to the rest of the commercial world
There was an interview with Fisher at some point where he clearly stated all the money that had been put in had been converted to equity then when we went into admin we owned millions! Wish I could remember where it was, have a feeling it was CWR, would love to get his response to that.
Because by 2015, the club's owners had categorically stated time and time again that they were building anew. In those circumstances, you can't criticise ACL/CCC for looking elsewhere. The issue here is Fisher's stance, because everything thereafter stems from that.
Now - the 'rebuilding bridges' statement; I totally and wholly agree with you on. That's seemingly duplicitous at best. I se this as being much more of 'a lie' than other actions I've seen folk getting uptight about. It looks like damn deceit, and really needs explaining
ACL made a loss, I suspect they are making a profit again now, just as much a guess though as saying they are loss making now. If the loan is still there, and the security is deemed sufficient, I'd rather they keep the loan as it is, gets some money into the Council. Certainly it would be neater though, and would cause less arguments, if they arrange their own loan with someone else.
I think he said 'some' had been converted. He also said the investors had written off the loans, but he forgot to say that it wasn't reflected in SBS&L's books.
Wasn't it at the 'forum' in the summer 2012 - while they were still believing they were buying Higgs shares?
I'm really not sure what you're driving at here. The rent was too high, I think we all agree that. ACL were reliant on the rent, I don't think many dispute that. That's pretty much it.
Due diligence is done after the acceptance of a bid. What I'm saying is that CCC's false stance had a negative impact on the ability to hold meaningful negotiations. If you have a business I think is worth £5m and you say is doing far better than I think is worth £40m its unlikely we'd ever get as far as me making a formal bid or reaching due diligence. Even more so if you said what I wanted to buy wasn't available.
If you then went and sold what I wanted to buy for £5m to someone else for £5m having told me it was worth £40m I'd be a bit pissed off.
I bet Sisu get comfort from this thread ?
It will be interesting to see how ACL perform now. With the NEC sold to LDC they will be far more aggressive in going after business, coupled with the refurb at Villa Park (a larger capacity venue) making it a good options for concerts and representative games ACL will have their work cut out. We're not paying a much lower rent, and possibly not here permanently. Wasps I assume don't pay rent at all and play a lot less games than us, not to mention have in excess of £3m a year losses to cover. Will be interesting to see what happens in the years to come.
On the one hand I would love the Ricoh to be a massive success for the city but the matter of it being owned by Wasps troubles me greatly.
This is getting boring. The council decision was made in January 2013; at which point the last set of accounts would have been used as benchmark - which showed ACL Group accounts profitable to the tune of £1,086,886 (31st May, 2012 accounts). So, when they made their decision to make the loan, it was to a profitable company
You request 'open book' to value the business. Audited accounts plus monthly management accounts for the current trading year to define the value. Make a conditional offer. Due Diligence then covers off everything to make sure there are no skeletons in the closet. That's how it's done. You wouldn't value a business in any way based on what someone may, or may not have said on a radio interview. Floated businesses, where a Director or company officer manipulate the share price based on false declarations are a totally different mechanism
Come on MMM, if you have one set of accounts showing a £1m profit but you also know that your major tenant was not paying you don't just go, well it's making a profit that will be fine. The council made the loan once we had already stopped paying rent during a period in which ACL were making a loss. We are now told that the information supplied by the council's representatives on ACL was misleading. As the council would have made their decision based on that misleading information do you not think there are questions for the council to answer?
Again, why is it relevant to the rental agreement?
As for the valuation - come on, for God's sake. Anyone buying would base their valuation of the business on the value derived from the books. That's what Due Diligence is all about. Bloody hell. If you think anyone - SISU, Wasps, or Idi Amin for that matter - would base their valuation on the business on what Lucas said, as opposed to what their team of forensic accountants would tell them from the books (audited accounts and monthly management accounts for the current year), you're on a different planet to the rest of the commercial world
Nah, in January 2013 when they bailed out ACL we were still playing there. But after the loan was given they did everything possible to drive the club into administration and possibly out of existence.
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