stupot07
Well-Known Member
So basically Sisu aren't distressing ACL...
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I would assume that they gave it that value before the lower rent offers. It stands to reason if you have a lease stating £1.2m a year over the next 40 years you would calculate that it's going to give you more revenue than a 10 year lease at £150K. The point I'm making is the change in revenue projection does not mean ACL are distressed, the very fact that they have offered the lower rent is the clearest indication we have that they are in a financial position to withstand the loss of revenue associated with club moving elsewhere..
It will still affect the value of ACL to any potential buyer, whether that be Sisu or A.N. Other(who has been seen in Varsity having a drink with Elliott and Hoffman).
So basically Sisu aren't distressing ACL...
Whatever the value was or is , sisu would never pay it . They want it all buckshee with jam on top, sisu out.
keep believing robbo, up to you mate....I cannot understand that though for the life of me, Tim Fisher said in the summer at the forums, that the financing for a new Stadium would come from Equity converted from the current debt, but why not use that to buy out ACL? Purchase the Higgs Share for the original sale price and CCC's Share for roughly the same price? They wouldn't need the Freehold to the Arena with this all revenues that they would require would easily be accessible, I can't understand why it won't be done, the only thing I can think of is that to some point there pinning their hopes on the JR, but they could be back in the Ricoh tomorrow if they pulled thier finger out.
keep believing robbo, up to you mate....
I cannot understand that though for the life of me, Tim Fisher said in the summer at the forums, that the financing for a new Stadium would come from Equity converted from the current debt, but why not use that to buy out ACL? Purchase the Higgs Share for the original sale price and CCC's Share for roughly the same price? They wouldn't need the Freehold to the Arena with this all revenues that they would require would easily be accessible, I can't understand why it won't be done, the only thing I can think of is that to some point there pinning their hopes on the JR, but they could be back in the Ricoh tomorrow if they pulled thier finger out.
Whatever they paid for the lease has little to do with the value of the business. It could be an asset; but their primary valuation would come from how they were trading and their forward projections.
Let me give you an example. Let's say they'd got it for £20m instead of £40m. That wouldn't make their business suddenly worth less!?! Conversely, if they'd paid over-the-odds and paid £80m - that doesn't then increase the 'value' of the business?!?
What the value of the lease does is to give them a figure they need to cover, month-by-month and year-by-year. A £40m value with a 20 year term gives a different overhead to cover than a £80m value with a 20 year term; insomuch as that the latter would have a larger loan repayment annually - which would depress bottom line. Yes, it might also show as an asset if the auditor believed the value to be true-and-fair, so would help balance sheet but depress P&L.
Whereas you seem to be claiming that the higher value paid, meaning the book value would be higher is the only driver in valuing the business. Do I read that correctly? Surely not
I would assume that they gave it that value before the lower rent offers. .
It's not really worth it for the money, formula price for Higgs - £10m buy out CCC £10m+, for a company that only makes a profit of £700k-1m per annum.
Still owing £14m loan, the all the hospitality tied up in IEC.
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It's not really worth it for the money, formula price for Higgs - £10m buy out CCC £10m+, for a company that only makes a profit of £700k-1m per annum.
Still owing £14m loan, the all the hospitality tied up in IEC.
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Think that was the value given at the time of administration.
Offer 20 million ( you will need to come up a bit)
Payable over 100 years. ( far more financially viable than the current proposal)
Get this in place get the club promoted sell the lot for 20 million and bugger off.
I cannot understand that though for the life of me, Tim Fisher said in the summer at the forums, that the financing for a new Stadium would come from Equity converted from the current debt, but why not use that to buy out ACL? Purchase the Higgs Share for the original sale price and CCC's Share for roughly the same price? They wouldn't need the Freehold to the Arena with this all revenues that they would require would easily be accessible, I can't understand why it won't be done, the only thing I can think of is that to some point there pinning their hopes on the JR, but they could be back in the Ricoh tomorrow if they pulled thier finger out.
It might be worthless to ACL it's in current state, but I don't think it would be useless to CCFC.
This route would also be quicker than building a new Stadium, which may not even appeal to the fans and which may not even reside in Coventry, if you go back to the Ricoh in this manner at least you are getting your monies worth, if CCFC also wanted to be helpful they could take over the repayments of the ACL/CCC loan.
Exactly makes far far more sense
45 + 25 million
Plus losses over time at Northampton
=
New stadium and sale price of over 70 million
Or
A profit margin that has to overcome approx 3 million of annual Interest charges.
How long would that take to chip away at 70 million in all honesty we all know it would not make a profit anyway so the 70 million would just grow
So you pay an innocent Coventry children's charity back over a 100 year period....can't see either of the shareholder seeing that as acceptable, do you?
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Are you being deliberately obtuse? Respect enough for you to say that you're not stupid.
The value of ACL as a business, separate from the leasehold they have on the Ricoh, would be contigent on contracts that they hold, and current or future income.
The loss of a 40 years to run contract would inevitably impact on the value of the business.
Although they won't own the freehold (not that I'm saying it's essential).
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But this assumes ACL are interested in selling up! ACL's hit of £40 million is on the assumption that they cannot get another tenant is it not? If they get another tenant, or alternate owners of CCFC, then there will be a new lease in existence. This argument only holds true if the Ricoh has a finite lifespan. If it were to be knocked down right at the end of the lease, then yes, however the intention I assume for at least some structure to remain at the site for long after the lease expires! Yes it has lost what was expected in income, but expected incomes change all the time! Ultimately you this is a contrary argument. And frankly not a well thought out one at that!That's not really distressed though is it, that's a loss of future revenues which may or may not be replaced by other revenues (doesn't necessarily have to be a replacement anchor tenant). It will still affect the value of ACL to any potential buyer, whether that be Sisu or A.N. Other(who has been seen in Varsity having a drink with Elliott and Hoffman).
Yes. Yes it would. That's clear.
However, and to come back to the point I've made throughout, ACL's activity in other areas is beginning to compensate for this loss; and their value right now will be more determined by their current business model.
The c.£40m paid gives them a right to trade for a defined period under a leasehold arrangement. I don't know what reliance they placed on the football club within their projections over that period; but let's guess 60% of turnover. For no other reason than it's a figure.
In practice, now that SISU have done what they have, they have a 0% reliance on the football club, as opposed to the hypothetical 60%. They have changed - and are changing - their business mix so that they can trade within this new landscape.
The c.£40m they paid for the 'right to trade' still has a value, it's just that the composition of the trade isn't as predicted without CCFC. As such, SISU's actions could potentially depress the trading with of the leasehold, but ACL are currently withstanding that storm.
Their value, right now, will be based on current trading, forward projections, and - of course to an extent - the shortening length of the lease they still have to harvest that income. But it'll be the business case that will be the primary factor in determining ACL's value; not whatever the book value of the lease sits at. And again, perhaps more importantly, the less reliant on CCFC it is, the more diverse it's appeal is; the more likely others may be interested. That gives SISU competition for any potential purchase (even of a long leasehold), and that won't depress the price - in fact quite the contrary may prevail.
And to go back to what I've said in recent days; SISU appear less liable to be able to 'afford' any share in the Ricoh right now than they ever have. As I discussed with Rob the other day, they should have agreed the deal with Higgs when it was alleged to have been on the table
Exactly makes far far more sense
45 + 25 million
Plus losses over time at Northampton
=
New stadium and sale price of over 70 million
Or
A profit margin that has to overcome approx 3 million of annual Interest charges.
How long would that take to chip away at 70 million in all honesty we all know it would not make a profit anyway so the 70 million would just grow
That £40million is the value that ACL put on the contract between themselves and the club at the time of administration.
They have never paid "£40million as a right to trade", they paid £25million for the 50 year lease.
You are getting the two confused.
That £40million is the value that ACL put on the contract between themselves and the club at the time of administration.
They have never paid "£40million as a right to trade", they paid £25million for the 50 year lease.
You are getting the two confused.
Would need to buyout Compass who paid £4m for a 10 year deal worth £125m, how much do you think that will cost?
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How far are we in to the 10 year deal Stupot?
Halfway.
http://m.catererandhotelkeeper.co.uk/Article.aspx?cat=news&id=326945
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compass are the enemy?!
Is it not working though?
Surely the value of ACL has been distressed by around the £40million that was remaining on the clubs lease?
Do you think that the value of ACL has gone up or not since the club left?
They get a guaranteed yearly income plus a low inflation linked interest rate.
They maybe very happy with that.
Beats someone trying to completely screw you over.
Not that this is relevant but are they a children's charity?
The classic way of valuing a business is that it is the sum of it's discounted expected future cash flows.
So it depends what those expectations are.
If the cash flows are expected to be lower without the lease, the value will be lower.
If it is expected that other larger revenue streams will replace the lease, the value will be higher.
It's probably too soon to say, but the clean audit report certainly suggests that ACL's future is not as awful as some have predicted.
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