Wasps downward spiral... (38 Viewers)

chiefdave · Oct 6, 2020

Liquid Gold said:
Fucking hell. It’s got to be PR because nobody is deluded enough to think that a £17m downturn and asking creditors to let you off is ever a good thing.

If you look at that chaps posting history on there he only ever comments on Wasps bonds, always thinks things are going fantastically and "I am a holder of these bonds".

The refinancing has got to be a huge worry at this stage. That's only 19 months away and it looks like we've got a few more months of corona restrictions at least followed by the impact of brexit, which at this stage is potentially no deal. Both things that will hammer the economy.

How many people will be lining up to invest in a rugby club that has far bigger losses than any other in the country who play in a league whose ongoing viability is being questioned in the national press? Not to mention the other aspects of the business, hotel, events, conferences and exhibitions, which covid has absolutely decimated. Those industries have a long lead time even if everything opened back up again tomorrow it could be months or years before they are back to the level they were.

Suspect a lot of the bond holders are fans, real investors would not wave through changes to the covenants without getting something in return. How many of them will be willing to put huge amounts in again next time round?

jordan210 · Oct 6, 2020

"I agree with the above. It was always obvious the club were going to have to refinance the bond to pay back existing bondholders, and that shouldn't be seen as a negative thing, especially if they are able to borrow at a cheaper price than the 6.5% they are paying now. Even if they have to borrow at higher rates, for existing bondholders it is irrelevant. Agree that a good performance on the pitch will help the club, additional income from TV rights, sponsorship and prize money are desperately required. Also means that if Derek Richardson does want to sell the club, he will get a lot more money for a club 2nd in the league than one in 10th, although hopefully good performance will encourage him to keep supporting the club financially."

I don't think anyone in there right mind would allow wasps to refinance at a lower rate. With all the risks involve you would expect it to be double figures.

chiefdave · Oct 6, 2020

jordan210 said:
"I agree with the above. It was always obvious the club were going to have to refinance the bond to pay back existing bondholders, and that shouldn't be seen as a negative thing, especially if they are able to borrow at a cheaper price than the 6.5% they are paying now. Even if they have to borrow at higher rates, for existing bondholders it is irrelevant. Agree that a good performance on the pitch will help the club, additional income from TV rights, sponsorship and prize money are desperately required. Also means that if Derek Richardson does want to sell the club, he will get a lot more money for a club 2nd in the league than one in 10th, although hopefully good performance will encourage him to keep supporting the club financially."

I don't think anyone in there right mind would allow wasps to refinance at a lower rate. With all the risks involve you would expect it to be double figures.

Their thinking seems to be Wasps can get a huge government covid loan, which will be on preferable terms, to refinance. Surely that can't happen.

Liquid Gold · Oct 6, 2020

They’re losing obscene figures a month. Even if they do still refinance at a better rate they’ll be £100m in the red in a few years. It’s completely unsustainable.

Terry Gibson's perm · Oct 6, 2020

Oh Bobby where are you it’s time to get your crayons out, I know they can’t afford to give you a free kit this year maybe some bonds instead.

jordan210 · Oct 6, 2020

Found an article on it here. Wasps needs to waive bond covenants after being stung by Covid-19 losses | TheBusinessDesk.com

"Group revenues were down 36%, to £22.2m, with all three parts of the business significantly hit." thats not what they told the Bobby the other day is it.

fernandopartridge · Oct 6, 2020

They are on the one hand claiming the arena value is still £51m yet on the other looking to remove the covenants as a pretext to a downward valuation

oldfiver · Oct 6, 2020

chiefdave said:
Their thinking seems to be Wasps can get a huge government covid loan, which will be on preferable terms, to refinance. Surely that can't happen.

CBILS loans are supposed to be only for for profitable businesses that have been impacted by COVID. The support is meant to infill the COVID gap not cover the previous loss making nor fund future property development transactions

chiefdave · Oct 6, 2020

fernandopartridge said:
They are on the one hand claiming the arena value is still £51m yet on the other looking to remove the covenants as a pretext to a downward valuation

Interesting given that we were told the reason the arena valuation shot up after Wasps takeover was down to the fact the valuation was based on projections of future business. Given that pretty much all their business has ground to a halt, and is likely to remain that way for the next few months, how come the valuation hasn't gone down?

Liquid Gold · Oct 6, 2020

Terry Gibson's perm said:
Oh Bobby where are you it’s time to get your crayons out, I know they can’t afford to give you a free kit this year maybe some bonds instead.

He's just done another Wasps PR piece.

Terry Gibson's perm · Oct 6, 2020

Liquid Gold said:
He's just done another Wasps PR piece.

Is that the one we’re they actually have to pay for tickets that will come as a real shock to some

jordan210 · Oct 6, 2020

This appears to be missing some of the negatives that Wasps needs to waive bond covenants after being stung by Covid-19 losses | TheBusinessDesk.com has

oldfiver · Oct 6, 2020

chiefdave said:
Interesting given that we were told the reason the arena valuation shot up after Wasps takeover was down to the fact the valuation was based on projections of future business. Given that pretty much all their business has ground to a halt, and is likely to remain that way for the next few months, how come the valuation hasn't gone down?

I suspect they either have not had a revaluation or they cannot agree a figure

However any self respecting lender will want to have a formal revaluation

jordan210 · Oct 6, 2020

The other day Vaughan said

"Three quarters of our business or more comes via non-sporting entity and, actually, some of those areas are actually going quite well, by us being quite flexible about what we can do.

Yet today

"Group revenues were down 36%, to £22.2m, with all three parts of the business significantly hit."

bradwellskyblues · Oct 6, 2020

we need to also consider these figures are already 3 months old since when they have had to take all the players and coaches off furlough so the picture as of now will be a lot worse.

oldfiver · Oct 6, 2020

jordan210 said:
This is basicly what that long article means

But remember this is all due to covid not down the their dire finances before.

The £8m profit is a untrue comparison because of £17m Share Sale plus £4m release of deferred income from one of the Franchises

jordan210 · Oct 6, 2020

oldfiver said:
The £8m profit is a untrue comparison because of £17m Share Sale plus £4m release of deferred income from one of the Franchises

My guess is wasps pr firms dont want that shown as other wise would show how poor the books really are and cant blame Covid for it all.

oldfiver · Oct 6, 2020

fernandopartridge said:
They are on the one hand claiming the arena value is still £51m yet on the other looking to remove the covenants as a pretext to a downward valuation

Also remember the "Valuation" is based on future income forecasts - wonder when they think all this is going to turn?

Ranjit Bhurpa · Oct 6, 2020

jordan210 said:
The other day Vaughan said

"Three quarters of our business or more comes via non-sporting entity and, actually, some of those areas are actually going quite well, by us being quite flexible about what we can do.

Yet today

"Group revenues were down 36%, to £22.2m, with all three parts of the business significantly hit."

So, which areas are actually going quite well if all three parts of the business have been significantly hit?

Arthur Daley would be nodding his head in approval.

fernandopartridge · Oct 6, 2020

oldfiver said:
Also remember the "Valuation" is based on future income forecasts - wonder when they think all this is going to turn?

View attachment 17160

I know, that's what I was sort of getting at.

ccfcchris · Oct 6, 2020

If and it's a big if SISU were buying up these bonds is there anything that could legally stop them refusing to refinance because of a conflict of interest?

djbooth · Oct 6, 2020

Is it me or is Steve Vaughan statement sounding like the wasps are becoming the new Nigerian prince

chiefdave · Oct 6, 2020

The idea of a white knight was being floated in the other thread, is that realistic? There won't be many people in the area who have a strong enough connection with them to be willing to cover tens of millions every season in losses.

There's always the prospect that as with the takeover of London Irish if they do find a new owner with deep pockets it could be someone who wants move them back to London.

Brighton Sky Blue · Oct 6, 2020

chiefdave said:
The idea of a white knight was being floated in the other thread, is that realistic? There won't be many people in the area who have a strong enough connection with them to be willing to cover tens of millions every season in losses.

There's always the prospect that as with the takeover of London Irish if they do find a new owner with deep pockets it could be someone who wants move them back to London.

I said that on the basis that there always seems to be one for every club in every sport except us

TomRad85 · Oct 6, 2020

Brighton Sky Blue said:
I said that on the basis that there always seems to be one for every club in every sport except us

I feel that pain.

Sent from my SM-G973F using Tapatalk

better days · Oct 6, 2020

djbooth said:
Is it me or is Steve Vaughan statement sounding like the wasps are becoming the new Nigerian prince

Anyone involved in business will know that EBITDA is an extremely dodgy way to inflate the profits or reduce the losses of a company
This doesn't look like it will end well

fatso · Oct 6, 2020

I wouldn't mind betting that their friends at the council will do something to help them out.

no_loyalty · Oct 6, 2020

better days said:
Anyone involved in business will know that EBITDA is an extremely dodgy way to inflate the profits or reduce the losses of a company
This doesn't look like it will end well

If they do go tits up, the only people I would feel sorry for are their genuine fans from London who have had to commute to games, the best scenario as already mentioned is for somebody to buy the club and move them back to London where they belong.

Liquid Gold · Oct 6, 2020

no_loyalty said:
If they do go tits up, the only people I would feel sorry for are their genuine fans from London who have had to commute to games, the best scenario as already mentioned is for somebody to buy the club and move them back to London where they belong.

There are loads fo them that haven't followed though, this would be a positive for them. I work with someone in Bristol whose family are from the South East and were big Wasps fans. When it came up you can imagine my reaction to how much I hate them and she just said about it being a shame as they haven't seen them once and it doesn't feel like their club anymore.

oldfiver · Oct 6, 2020

better days said:
Anyone involved in business will know that EBITDA is an extremely dodgy way to inflate the profits or reduce the losses of a company
This doesn't look like it will end well

Not sure that is correct, the "profit " figure does not change in the process

Grendel · Oct 6, 2020

oldfiver said:
If only we knew who the Bond Holders were - I suspect this will get approved

Im sure it will

better days · Oct 6, 2020

oldfiver said:
Not sure that is correct, the "profit " figure does not change in the process

Probably didn't word it correctly
Whenever the outfit i work for is valuing a company for sale we don't use EBITDA. it only really makes sense for huge corporations and even then it's a bit dubious

Liquid Gold · Oct 6, 2020

As much as it’s annoying that the bond holders will surely approve it that’s only a temporary reprieve. None of us were expecting it to come to a head so soon. May 2022 is our date to look forward to.

jordan210 · Oct 6, 2020

Some wasps fans are pinning hopes that rugby might get some money from the government. If this does happen it will open up a whole can of worms on other sports asking for the same help.

Amazing that some also thin refinancing the bond will be a easy task. imagine defaulting on your mortgage and then expecting the same lender to give you more money at a better rate.

AFCCOVENTRY · Oct 6, 2020

better days said:
Probably didn't word it correctly
Whenever the outfit i work for is valuing a company for sale we don't use EBITDA. it only really makes sense for huge corporations and even then it's a bit dubious

Most professional people would look past EBITDA and do their own due diligence.

Wasps downward spiral... (38 Viewers)

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