Wasps current finances & hope (12 Viewers)

oldskyblue58 · Oct 12, 2019

Ooops indeed

The previous valuation for the long lease was 60m so it is a drop of 9m

The long term borrowing includes what is owed to the owner. Still due but I dont think it is secured on the lease.

The trend was up at june 2018 but showed a small drop by December 2018.

Will be interesting to see what the 2019 accounts show

chiefdave · Oct 12, 2019

oldskyblue58 said:
The long term borrowing includes what is owed to the owner. Still due but I dont think it is secured on the lease.

Given that there has been talk that owner has a large percentage of his personal wealth tied up in Wasps and not, relatively speaking, a whole lot more to put in how saleable are Wasps?

Is it realistic to expect there to be a buyer who would pay enough to cover the amount owned to the owner, be happy that the bonds could be refinanced (or repayed) and able to cover losses moving forward?

Philosoraptor · Oct 12, 2019

We should have a spread at the SBT Bookies on how much the bond price willl fall to when the yearly results come out.

I'll have a punt of it going down to 63p

SBAndy · Oct 12, 2019

chiefdave said:
Given that there has been talk that owner has a large percentage of his personal wealth tied up in Wasps and not, relatively speaking, a whole lot more to put in how saleable are Wasps?

Is it realistic to expect there to be a buyer who would pay enough to cover the amount owned to the owner, be happy that the bonds could be refinanced (or repayed) and able to cover losses moving forward?

Given the fact that rugby doesn’t have the same mainstream appeal, I’d suggest it’s unlikely a rich benefactor would come in and bankroll a club to that effect (though the Toulon fella did, I suppose).

oldskyblue58 said:
Ooops indeed

The previous valuation for the long lease was 60m so it is a drop of 9m

The long term borrowing includes what is owed to the owner. Still due but I dont think it is secured on the lease.

The trend was up at june 2018 but showed a small drop by December 2018.

Will be interesting to see what the 2019 accounts show

I read a valuation of £67m online when checking - probably should have looked at the accounts instead.

Appreciate the long-term liabilities include owners funds in this instance, but the fact this debt is now higher than their prized asset will be of huge concern.

I think we may be due another management reshuffle.

SBAndy · Oct 12, 2019

Philosorapter said:
We should have a spread at the SBT Bookies on how much the bond price willl fall to when the yearly results come out.

I'll have a punt of it going down to 63p

Well I didn’t realise it’s dropped to 78p already! Thought it was mid-80s. Maybe 63p will be too much of a drop, but it’ll likely enter the 60s.

As a side note to this - and I know I’ve been wrong about this before - would it be possible for SISU to buy into the debt if it is trading so low?

harvey098 · Oct 12, 2019

At a wasps game today for the first time (it was a free ticket with 3 course meal and free bar, I wouldn’t give them any money)... glad to say the attendance looks poor

Liquid Gold · Oct 12, 2019

harvey098 said:
At a wasps game today for the first time (it was a free ticket with 3 course meal and free bar, I wouldn’t give them any money)... glad to say the attendance looks poor

If I had a free bar surrounded by London Wasps fans would end with me getting a pretty severe sentence.

Nick · Oct 12, 2019

Oh dear, there's nobody there

Terry Gibson's perm · Oct 12, 2019

Nick said:
Oh dear, there's nobody there

The bubble has well and truly burst, expect the telegraph to ramp up the wasps feel good factor.

Nick · Oct 12, 2019

Could have photo shopped some people in

chiefdave · Oct 12, 2019

Nick said:
Could have photo shopped some people in

Maybe the rugby club that's bought Liberty Way is actually Wasps. Looks like it would be about the right size for them.

Still, even with nobody there they've still run out of beer.
But on the bright side those there seem to be enjoying the game.

oldfiver · Oct 12, 2019

oldskyblue58 said:
Ooops indeed

The previous valuation for the long lease was 60m so it is a drop of 9m

The long term borrowing includes what is owed to the owner. Still due but I dont think it is secured on the lease.

The trend was up at june 2018 but showed a small drop by December 2018.

Will be interesting to see what the 2019 accounts show

Also significant is it's not reported on the CT, the WASPS share page, the LSE news or other financial press

CCFC54321 · Oct 12, 2019

harvey098 said:
At a wasps game today for the first time (it was a free ticket with 3 course meal and free bar, I wouldn’t give them any money)... glad to say the attendance looks poor

Fuck me without knowing what the main stand looked like in terms of capacity Id imagine they cant be more than 2-3,000 there?

CCFC54321 · Oct 12, 2019

Nick said:
Could have photo shopped some people in

I’ve seen more homeless people in the precinct than at a wasps game.

SBAndy · Oct 12, 2019

CCFC54321 said:
Fuck me without knowing what the main stand looked like in terms of capacity Id imagine they cant be more than 2-3,000 there?

Official attendance was just over 6000.

CCFC54321 · Oct 12, 2019

SBAndy said:
Official attendance was just over 6000.

really? The main stand must of been well populated!

CanadianCCFC · Oct 12, 2019

harvey098 said:
At a wasps game today for the first time (it was a free ticket with 3 course meal and free bar, I wouldn’t give them any money)... glad to say the attendance looks poor

How can they afford to give you a free ticket, 3 course meal and bar.

oldskyblue58 · Oct 13, 2019

Dont think the last valuation was reported at LSE or in national financial news was it ? Only in the CT was there an article The value is still above the original bond offer valuation and therefore I assume any covenant on the bonds relating to lease value. Still 1.4 times the bond debt

If they have done a revaluation of the P share then it is conceivable that their balance sheet will have actually improved. We will have to wait see. There are some restructuring costs to include though including extraction from compass deal

It's not like wasps have hidden the information. It is on their website. When was it posted up ? Might explain in part why the bond price dropped though.

Nothing stopping CT or the other financial press reporting on it. The CT you would expect would and should the other press maybe a passing comment. In the greater financial world it isnt really that significant. In Coventry it is.

Will be interesting to see what the wasps plan to sort their mess out is.

oldfiver · Oct 13, 2019

oldskyblue58 said:
Dont think the last valuation was reported at LSE or in national financial news was it ? Only in the CT was there an article The value is still above the original bond offer valuation and therefore I assume any covenant on the bonds relating to lease value. Still 1.4 times the bond debt

If they have done a revaluation of the P share then it is conceivable that their balance sheet will have actually improved. We will have to wait see. There are some restructuring costs to include though including extraction from compass deal

It's not like wasps have hidden the information. It is on their website. When was it posted up ? Might explain in part why the bond price dropped though.

Nothing stopping CT or the other financial press reporting on it. The CT you would expect would and should the other press maybe a passing comment. In the greater financial world it isnt really that significant. In Coventry it is.

Will be interesting to see what the wasps plan to sort their mess out is.

They reported late and breached covenants

CCFC54321 · Oct 13, 2019

oldskyblue58 said:
Dont think the last valuation was reported at LSE or in national financial news was it ? Only in the CT was there an article The value is still above the original bond offer valuation and therefore I assume any covenant on the bonds relating to lease value. Still 1.4 times the bond debt

If they have done a revaluation of the P share then it is conceivable that their balance sheet will have actually improved. We will have to wait see. There are some restructuring costs to include though including extraction from compass deal

It's not like wasps have hidden the information. It is on their website. When was it posted up ? Might explain in part why the bond price dropped though.

Nothing stopping CT or the other financial press reporting on it. The CT you would expect would and should the other press maybe a passing comment. In the greater financial world it isnt really that significant. In Coventry it is.

Will be interesting to see what the wasps plan to sort their mess out is.

Your appraisal of wasps in all posts is always very level headed, however your last comment was interesting. Are you indicating like we all believe the situation is with wasps that they DO have serious financial issues that will/could force there hopeful demise ?

oldskyblue58 · Oct 13, 2019

Could they mess up and fold of course its possible but it is not what I am saying I still do not think it is likely. Do they have financial problems yes, but that doesn't make those problems unsolvable

Just as I credit sisu with having a plan, then so too wasps. Things have not gone exactly to plan but I am pretty sure they are planning a way out of the financial problems and pressure.

I am curious as to what that plan is. It is as yet not as clear as the plan sisu have instigated but wasps are not run by financial amateurs. They understand better than anyone the issues and have the options to deal with it. They have also been dealing with it for months even years it has not suddenly happened or been recently reacted to.

Neither team is out of the financial mire but each has different problems and different possible solutions. Both could go bust but I dont think either will.

oldskyblue58 · Oct 14, 2019

oldfiver said:
They reported late and breached covenants

Yes I know that, but that wasnt the lease valuation that was reported late or in breach of any covenant

The 2017 lease valuation was dated 31/03/2017 and reported mid April 2017. There is no requirement in the prospectus to publish that valuation on the LSE that i can see. (Indeed to do so may actually have misled investors considering the accounting errors we now know of.) Similarly the valuation in 2019 has been done promptly and made available. The only responsibility i can see is that they carry out the valuation promptly and make it known to the Bond Trustees ..... they have gone further and made a summary of the valuation public on their website. The LSE requirement is for the publishing of the full audited financials in October and summary financials in April

In terms of the covenants specifically in relation to the lease value then the prospectus requires the aggregate of the Lease and P Shares values to be 1.4 times the senior debt. Senior debt being described as the Bond Debt excluding the amount owed to Richardson. Value of lease £51m value of P Share in 2018 £9.7m (see comments above about current value) Senior debt 35m.................. ratio 1.73

The reduction in lease value is not ideal but from what i can see it doesnt threaten the bond liability

oldfiver · Oct 15, 2019

If one is being pedantic the valuation was a year late. The prospectus states there should have been a revaluation no later than June 2016 - however WASPS swerved this by publishing in the 2016 accounts the Management had decided, on their opinion, a previous valuation had not changed. This of course, was the same year the Auditors came to find some figures were "falsified"

Come 2017 and there is a 20% increase in value that is posted to their website and creates banner headlines in the CT.
Ricoh Arena soars in value under Wasps

You are correct that there is no obligation to publish the valuation in any press release. However, I would have thought in the terms of consistency a fall that takes the valuation back to near 2015 figures was worthy of more comment.
With reference to the LSE we should remember the reporting company and Bond creditor is WASPS FINANCE Plc not WASPS HOLDINGS Ltd. I would have thought a 15% fall in the primary asset securing the debt would have been a significant reporting event.

As to "going further" and publishing on their website - this is a requirement under the prospectus covenants. The covenant also requires the valuation report be presented "promptly" after completion. The report is dated 23 April 2019 but I would be interested to know if anyone has the date it was posted on the website

As an aside, the inclusion of the P Shares in the security covenant I find confusing. The P Shares are not part of the Bond Holders security it is only the income derived from any sale before the redemption date. Even if there is a default on the Bond , I understand the Trustees have no powers to force the sale.

oldskyblue58 · Oct 15, 2019

Yes the Prospectus says 2016. However you would have to expect that the directors had permission from the bond trustees not to do a formal valuation in 2016, that the permission was documented as were the reasons, the assumptions, calculations and criteria for the directors decision, that the auditors examined all that and confirmed directly in writing with the bond trustees that the trustees were in agreement not to have a formal valuation in 2016 and that the auditors, bond trustees and regulators were happy with the conclusion. That is how, as an auditor, i would have expected the process to have gone. It would not be just on the directors say so, especially with something so public and high profile. It is also clear that the auditors were, in their work, challenging whether wasps holdings and wasps finance had met the requirements of the bond issue document. But frankly its old news isn't it.

The reference to falsified information is contained in the 2017 financials and audit report not 2016. My guess is that the falsified transaction took place around June 2017 in an effort to meet the EBITDA provision. Whether it had an impact on any lease valuation done 31 March 2017 i am not sure, as a single transaction in a single year ? when the valuation is based over a number of years. We just do not know. After increasing their audit fee by a factor of 7 the auditors found nothing other than the one falsification. You would think if they did their job properly they would have traced its impact back to the valuation assumptions. The new auditors in 2018 would have also had to check all of the above as it relates to lease value. Again it is stuff that is done and dusted, i havent seen any evidence of any regulatory action being taken by the FCA it must be over a year since Reid made his complaint.

The 2019 valuation. More comment by who? I would suggest that a reportable event would be if the security total drops below the required minimum - it hasnt. There is no requirement for wasps to give detailed narrative that i can see. I accept it is a matter of opinion as to what makes sufficient disclosure but generally companies disclose as little as possible and only in the detail demanded of them by regulation. There may of course be more detail in the financials to be published later this month for wasps holdings & wasps finance. Whether the CT picks up on it or should have i cant answer you would think they might.

The valuation has been disclosed. The disclosure first and foremost is to the bond trustees, but we dont know when any of the valuations were disclosed to them. We dont actually even know when it appeared on the website either. Was it prompt disclosure or not? at the moment i cant answer that.

The charge on the P Shares is a charge over the possible sale proceeds not the share itself. Which means in any insolvency or sale of those shares the bond holders have first call on the cash generated. because is convertible to cash that is why it was included i would think

jordan210 · Oct 17, 2019

The bond appears to be a slippery slope. Normally the bond has a large drop and then a small recovery. Last big drop in September hasn't recovered and has been going down since.

Currently at 75.85 at the start of the month was around 81.40.

fernandopartridge · Oct 17, 2019

jordan210 said:
The bond appears to be a slippery slope. Normally the bond has a large drop and then a small recovery. Last big drop in September hasn't recovered and has been going down since.

Currently at 75.85 at the start of the month was around 81.40.

People selling before the next annual report is due?

jordan210 · Oct 21, 2019

Been 3 trades today on the bond and has dropped to 71.62

Philosoraptor · Oct 21, 2019

Philosorapter said:
We should have a spread at the SBT Bookies on how much the bond price willl fall to when the yearly results come out.

I'll have a punt of it going down to 63p

Whatever going on the bond price is looking like its in free fall.

duffer · Oct 22, 2019

Watched the highlights from the Wasps game last night, if there was more than 8000 there in reality, I'd be amazed.

Either way, to lose at home to a newly promoted side isn't exactly going to bring the undecided fans back. And it must really hurt some of them to have to look at an stand with SKY BLUES plastered across the seats in 50ft letters.

Ah, schadenfreude - boy those Germans have a word for everything

Grendel · Oct 22, 2019

duffer said:
Watched the highlights from the Wasps game last night, if there was more than 8000 there in reality, I'd be amazed.

Either way, to lose at home to a newly promoted side isn't exactly going to bring the undecided fans back. And it must really hurt some of them to have to look at an stand with SKY BLUES plastered across the seats in 50ft letters.

Ah, schadenfreude - boy those Germans have a word for everything

someone mentioned Sky Blue lettering staring out at then on their forum. Ricoh getting a lot of flack for being empty and soulless. Who’d have thought.

jordan210 · Oct 22, 2019

Philosorapter said:
We should have a spread at the SBT Bookies on how much the bond price willl fall to when the yearly results come out.

I'll have a punt of it going down to 63p

At the rate is going. I would not be surprised if it was at 63p by the end of the month.

fernandopartridge · Oct 22, 2019

jordan210 said:
At the rate is going. I would not be surprised if it was at 63p by the end of the month.

Would it be cheaper for Richardson to try and buy as many bonds back as possible?

jordan210 · Oct 22, 2019

fernandopartridge said:
Would it be cheaper for Richardson to try and buy as many bonds back as possible?

No idea on the legalities on that. Maybe oldskyblue would know.

speedie87 · Oct 22, 2019

It doesn’t matter to wasps how much the bonds cost will cost the same to them to repay whatever. See various posts previous in thread

jordan210 · Oct 22, 2019

speedie87 said:
It doesn’t matter to wasps how much the bonds cost will cost the same to them to repay whatever. See various posts previous in thread

I think fernandopartridge was wondering could wasp buy them at the lower rate and then not have to repay themselves back ?

Maybe Sisu have been buying them up cheap.

Wasps current finances & hope (12 Viewers)

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