ALK Capital or Farnell/Elkashashy takeover

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Vegas Claret » Tue Jan 12, 2021 3:54 pm

I would have been far more concerned if Pace had come in full of bravado telling us the aim was Champions League football and to sign the best players, as it is at this stage I have zero concern
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by KRBFC » Tue Jan 12, 2021 3:55 pm

aggi wrote:
Tue Jan 12, 2021 2:51 pm
It's based on them having bought a football club.
But it appears anyone with decent contacts in finance could’ve done what they have done, used the clubs income to pay for their own shares. Piling all the risk on the club as they go.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by joey13 » Tue Jan 12, 2021 4:00 pm

The fact a few posters on here who were really positive before the deal was done , have gone quiet , is rather strange 🤷‍♂️

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by randomclaret2 » Tue Jan 12, 2021 4:02 pm

The Chairman references concerns over the takeover, albeit in no great detail, in his programme notes for tonight's game.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Peter Loo » Tue Jan 12, 2021 4:07 pm

Thanks for the TIFO link very interesting to listen too.

I can only conclude from that ALK Capital/Alan Pace can't lose but Burnley FC can.

Other then that Burnley FC as a Company and its Supporters and the Town's economy are starting with that debt handicap.

When I say handicap I mean BFC have to avoid relegation as staying solvent will be that much harder if they don't

That's one of the worst scenarios and if they don't get back at the first go like before then that will be an even worst scenario and so on.

How much will the new people take out of the club going forward, will SD his coaching people and his staff stay? they are some of the unknowns.

That's the bad news.

The good news is that we are told that Alan Pace brings some financial, marketing and analytical skills to the Club/Company so if BFC are marketed positively world wide and that brings in significant revenue we should do well.. perhaps very well.

Unfortunately none of us know what the future holds so there lies the uncertainty.

Fingers crossed and everything else, lets all hope we can enjoy the ride.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by cblantfanclub » Tue Jan 12, 2021 4:18 pm

Anybody of the above who have doubts now wish Farnell had succeeded - wasn't he going to finance it in similar fashion - to everyone's horror -but ultimately may have had some middle eastern capital that could be arranged.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by dsr » Tue Jan 12, 2021 4:20 pm

dandeclaret wrote:
Tue Jan 12, 2021 3:21 pm
If ALK invest £55m cash reserves well, to generate increased revenues, above the interest payment, then the club will do well.
That money has gone. ALK have paid it to Mike Garlick. There is nothing left to invest.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Chester Perry » Tue Jan 12, 2021 4:26 pm

dsr wrote:
Tue Jan 12, 2021 4:20 pm
That money has gone. ALK have paid it to Mike Garlick. There is nothing left to invest.
at no point has Matt Slater said it all went on the purchase of shares

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by aggi » Tue Jan 12, 2021 4:28 pm

KRBFC wrote:
Tue Jan 12, 2021 3:55 pm
But it appears anyone with decent contacts in finance could’ve done what they have done, used the clubs income to pay for their own shares. Piling all the risk on the club as they go.
Your question was whether they had enough capital to buy a football club and the fact that they've bought a football club means the answer is definitely yes.

It's not just the contacts, you also need the business plan and personnel to convince someone to loan you a lot of money and someone to sell you the club.

If the new ownership grow revenues at a significantly greater rate than additional costs are incurred then maybe it won't be a bad deal for Burnley. It's not a clear cut Bad Deal/Good Deal that some want to make it.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by claretandy » Tue Jan 12, 2021 4:34 pm

An interesting point Slater made is paying interest payments isn't such a bad thing as it can be used to reduce your tax on profits.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by BurnleyFC » Tue Jan 12, 2021 5:04 pm

cblantfanclub wrote:
Tue Jan 12, 2021 4:18 pm
Anybody of the above who have doubts now wish Farnell had succeeded - wasn't he going to finance it in similar fashion - to everyone's horror -but ultimately may have had some middle eastern capital that could be arranged.
The thought had crossed my mind, I must admit.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Tall Paul » Tue Jan 12, 2021 5:12 pm

claretandy wrote:
Tue Jan 12, 2021 4:34 pm
An interesting point Slater made is paying interest payments isn't such a bad thing as it can be used to reduce your tax on profits.
Paying £100 interest to save £19 tax isn't the greatest business plan though.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by aggi » Tue Jan 12, 2021 5:13 pm

claretandy wrote:
Tue Jan 12, 2021 4:34 pm
An interesting point Slater made is paying interest payments isn't such a bad thing as it can be used to reduce your tax on profits.
There's lot of theories about how much debt is the right amount of debt for a business. None is pretty rare as an answer.
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by aggi » Tue Jan 12, 2021 5:15 pm

For those who've been mentioning Leicester as a good example of owners it's worth noting that they just borrowed money against next season's Premier League income
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Chester Perry » Tue Jan 12, 2021 5:18 pm

aggi wrote:
Tue Jan 12, 2021 5:15 pm
For those who've been mentioning Leicester as a good example of owners it's worth noting that they just borrowed money against next season's Premier League income
they do it every year - it is a very difficult spiral to get out of - we managed it once, a 2nd time is likely to prove impossible from our own means.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by KRBFC » Tue Jan 12, 2021 5:22 pm

aggi wrote:
Tue Jan 12, 2021 5:15 pm
For those who've been mentioning Leicester as a good example of owners it's worth noting that they just borrowed money against next season's Premier League income
We are not Leicester though, we can’t rely on guaranteed income yearly like they can.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by scouseclaret » Tue Jan 12, 2021 5:44 pm

aggi wrote:
Tue Jan 12, 2021 5:13 pm
There's lot of theories about how much debt is the right amount of debt for a business. None is pretty rare as an answer.
Generally speaking, the appropriate level of debt tends to be seen as a function of the stability of your cashflows, which is why football clubs are generally considered poor candidates for LBOs, and successful ones are rare as rocking horse poo. Maybe Man U, but many would argue the toss...

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by ewanrob » Tue Jan 12, 2021 6:10 pm

I'm sorry not read everything, so apologies for repeating...but Mr Pace writes

"Finally, there has been some speculation in the media about the club’s finances. While the details and figures quoted by some sections of the national media are wide of the mark, I realise that some supporters may worry about the impact the takeover may have on the club’s cash reserves.

I would like to reiterate, with a hand on my heart, that our financial approach is reasonable and sustainable for the club. The directors and I are committed to continuing the club’s growth and demonstrating financial stability over the long-term. Our actions will speak louder than any words."

I understand the nerves...but Let's give them a chance, before pulling it all to pieces.
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Nonayforever » Tue Jan 12, 2021 6:34 pm

aggi wrote:
Tue Jan 12, 2021 4:28 pm
Your question was whether they had enough capital to buy a football club and the fact that they've bought a football club means the answer is definitely yes.

It's not just the contacts, you also need the business plan and personnel to convince someone to loan you a lot of money and someone to sell you the club.
MSD are there for one purpose - to lend money at very rates for clients who can't go anywhere else. Burnley FC directors were desperate to sell.
That was the two main parts of the jigsaw for ALK, the easy parts. The business plan must have taken hell of a lot of working out. I cannot see any scenario what so ever how that was put together to make it convincing. I just wish Chester could lay his hands on it. It seems to me we have to be a regular PL top 10 side to just break even.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Paul Waine » Tue Jan 12, 2021 6:39 pm

ewanrob wrote:
Tue Jan 12, 2021 6:10 pm
I'm sorry not read everything, so apologies for repeating...but Mr Pace writes

"Finally, there has been some speculation in the media about the club’s finances. While the details and figures quoted by some sections of the national media are wide of the mark, I realise that some supporters may worry about the impact the takeover may have on the club’s cash reserves.

I would like to reiterate, with a hand on my heart, that our financial approach is reasonable and sustainable for the club. The directors and I are committed to continuing the club’s growth and demonstrating financial stability over the long-term. Our actions will speak louder than any words."

I understand the nerves...but Let's give them a chance, before pulling it all to pieces.
Hi ewanrob, thanks for posting. Is this in the match programme.

As we all know, Alan Pace has moved to live in the area. He's making all the "right noises" that he is here to make Burnley FC successful.

It's true we don't have all the details about the club's finances. But, let's be honest with ourselves, we've never had all the up to date details of the club's finances. The accounts are always 9 months old when we've seen them and 2 transfer windows have passed, with some incoming and some outgoings since the accounting period ended. (Agree not many incoming last summer. Agree also there were significant OOCs who left). We also don't have month by month insights to the club's cashflow - remember tv money comes in big lumps, players get monthly wages, but how much is paid in bonuses and is that all at season end?

What I'm saying is that managing cashflow is an important business skill. It's a skill I would expect an experienced investment banker to know better than most of us. (That's not to say that John B, in particular, doesn't move in closely related circles with his business).

Let's all enjoy the game this evening and the rest of the season. I'm sure we've got the best new owners we could hope for. The club is in safe hands.

Exciting times.

UTC
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by DCWat » Tue Jan 12, 2021 6:51 pm

I do like that Pace is at least acknowledging the concerns. Aside from keeping quiet though, he’s hardly saying anything different to what we’d expect to hear.

That said, I am actually inclined to trust the bloke. Stupid as that sounds with so little basis for such a conclusion.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by CrosspoolClarets » Tue Jan 12, 2021 7:47 pm

Paying interest to save 19% tax can work if the investment that the debt generates leads to a return / positive benefit. However, if the interest is only on debt used to buy out the former owners, that increased return would have to be generated from other means.

So, for sake of argument, if the interest was, hypothetically, £10m per year, additional revenue of over £10m (net of costs) would be needed before that interest is covered.

Personally I expect the business plan to target long term a scouting / AIScout investment to do just that, akin to Southampton etc. Whether that can happen with the huge PL vultures just miles away from East Lancashire, who knows? But if it does, that will be a direct benefit of ALK bringing that scouting app into the club (if it works though, everyone will want to use it, so we wouldn’t particularly benefit longer term, but the owners of the app would).

What WILL help though, is beating United tonight, so I’ll log off this now, and log on that :D

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by arise_sir_charge » Tue Jan 12, 2021 8:04 pm

joey13 wrote:
Tue Jan 12, 2021 3:35 pm
unsubstantiated figures and hearsay , surely :roll:
Until they provide evidence and name sources then yes it is.

I don’t get what you don’t understand about that.

Dande actually sums it up very well in one of his earlier posts about the risks and opportunities but the focus on here is all about the money aspect which as yet is guesswork.

This is further shown by Dsr saying that £55m of club coffers have been spent and there is no money left.

It’s an absurd quirk of this messageboard that there never seems to be a middle ground.

As for DA and his comments about wait and see, I stick by that. I’ll decide if this was good or bad in the fullness of time as quite frankly there is nothing that I can do about it in any event!

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by keith1879 » Tue Jan 12, 2021 11:12 pm

arise_sir_charge wrote:
Tue Jan 12, 2021 8:04 pm
Until they provide evidence and name sources then yes it is.

I don’t get what you don’t understand about that.

Dande actually sums it up very well in one of his earlier posts about the risks and opportunities but the focus on here is all about the money aspect which as yet is guesswork.

This is further shown by Dsr saying that £55m of club coffers have been spent and there is no money left.

It’s an absurd quirk of this messageboard that there never seems to be a middle ground.

As for DA and his comments about wait and see, I stick by that. I’ll decide if this was good or bad in the fullness of time as quite frankly there is nothing that I can do about it in any event!
As a rule of thumb I have decided not to believe anything that I read on here on any thread ever again. But I do think that this thread has achieved a particular level of absurdity in that it is creating the impression that the club has got into debt by lending its own money. Now I'm not an accountant but........

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by dsr » Tue Jan 12, 2021 11:18 pm

ewanrob wrote:
Tue Jan 12, 2021 6:10 pm
I'm sorry not read everything, so apologies for repeating...but Mr Pace writes

"Finally, there has been some speculation in the media about the club’s finances. While the details and figures quoted by some sections of the national media are wide of the mark, I realise that some supporters may worry about the impact the takeover may have on the club’s cash reserves.

I would like to reiterate, with a hand on my heart, that our financial approach is reasonable and sustainable for the club. The directors and I are committed to continuing the club’s growth and demonstrating financial stability over the long-term. Our actions will speak louder than any words."

I understand the nerves...but Let's give them a chance, before pulling it all to pieces.
One thing is certain - they cannot, legally, keep the details of this deal secret. By March 2022 Burnley FC have to tell the world how much they borrowed, what the rate was, who they borrowed it from, when they have to pay it back, and if the existing money or the newly borrowed money was used to pay the new owners' debts, they have to say that as well.

So why not tell us now?

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Chester Perry » Tue Jan 12, 2021 11:23 pm

dsr wrote:
Tue Jan 12, 2021 11:18 pm
One thing is certain - they cannot, legally, keep the details of this deal secret. By March 2022 Burnley FC have to tell the world how much they borrowed, what the rate was, who they borrowed it from, when they have to pay it back, and if the existing money or the newly borrowed money was used to pay the new owners' debts, they have to say that as well.

So why not tell us now?
I am hoping that is will be noted in the 2019/20 accounts to be released by May this year - surely such a substantial shift cannot be ignored

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by dsr » Tue Jan 12, 2021 11:41 pm

Chester Perry wrote:
Tue Jan 12, 2021 11:23 pm
I am hoping that is will be noted in the 2019/20 accounts to be released by May this year - surely such a substantial shift cannot be ignored
Hope so - though they might have signed the accounts before 31st December and get round it that way. I think the accounts (normally at least) have to be with the league by that date.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by WalkdenClaret » Tue Jan 12, 2021 11:51 pm

keith1879 wrote:
Tue Jan 12, 2021 11:12 pm
As a rule of thumb I have decided not to believe anything that I read on here on any thread ever again. But I do think that this thread has achieved a particular level of absurdity in that it is creating the impression that the club has got into debt by lending its own money. Now I'm not an accountant but........
I'm no accountant but on 30th December we appeared to £40-50m in the bank, debt free.
on 31st December, we appear to have £0 bank balance, plus a new debt of £60m

To use the mortgage analogy.
I'm getting on a bit, the house is a bit tired, there's stuff to do. I'm mortgage free, but at least i've got £400-£500 quid to replace that nice, solid but ageing front door or buy a mid-range, nothing special microwave that might not produce flambeed feasts but will regularly knock out a good, solid back of the net Lasagne on a regular basis.

I was a bit concerned that I couldn't afford a great big solid barn door to keep me safe from the terrors of the Championship and I yearned that top of the range, Swarovski Microwave.
This chappie heard about my woes and bought my house, he promised to pay cash, and upon handing over the house, gave me the promised £400-£500 quid.

For some reason, I am now renting my old house and owe chappies mate £600 for which he's gonna charge me £72.50 and the £400-£500 has disappeared so I can't even afford a lasagne, never the microwave or new front door. It suddenly feels little chilly.

Exciting times ! UpTheClarets, all fingers crossed that it works out in the end

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Chester Perry » Tue Jan 12, 2021 11:59 pm

dsr wrote:
Tue Jan 12, 2021 11:41 pm
Hope so - though they might have signed the accounts before 31st December and get round it that way. I think the accounts (normally at least) have to be with the league by that date.
they do (early December I think) and it is a get out, that I hope will not be used

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by NewClaret » Wed Jan 13, 2021 12:24 am

Chester Perry wrote:
Tue Jan 12, 2021 11:59 pm
they do (early December I think) and it is a get out, that I hope will not be used
Assume the BFC financial year links to the season, in which case 19/20 accounts will only relate to what happened up to the end of the financial year for which this transaction was not a part. I seem to remember last years results being filed in March, so presumably we’ll see 19/20 results in March 21 (exc this transaction - when we’ll know how much cash we had heading in to the summer window) and 20/21 results (inc this transaction) in March 22.

Not a get out - completely normal and expected.

Then the accounts for the various ALK companies, that you may need to piece it all together, could run on different financial years so be filed after March 22.

Wont matter so much when we’re in the Champions League that season. :D

Exciting times.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by dsr » Wed Jan 13, 2021 12:30 am

NewClaret wrote:
Wed Jan 13, 2021 12:24 am
Assume the BFC financial year links to the season, in which case 19/20 accounts will only relate to what happened up to the end of the financial year for which this transaction was not a part. I seem to remember last years results being filed in March, so presumably we’ll see 19/20 results in March 21 (exc this transaction - when we’ll know how much cash we had heading in to the summer window) and 20/21 results (inc this transaction) in March 22.

Not a get out - completely normal and expected.

Then the accounts for the various ALK companies, that you may need to piece it all together, could run on different financial years so be filed after March 22.

Wont matter so much when we’re in the Champions League that season. :D

Exciting times.
Major post balance sheet events have to be reported even though they didn't happen during the year. So if the accounts for the period ending last summer were not yet finalised, they would have to include an outline of what has just happened. If the accounts have already been signed, they won't have to have that info.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by NewClaret » Wed Jan 13, 2021 12:32 am

dsr wrote:
Wed Jan 13, 2021 12:30 am
Major post balance sheet events have to be reported even though they didn't happen during the year. So if the accounts for the period ending last summer were not yet finalised, they would have to include an outline of what has just happened. If the accounts have already been signed, they won't have to have that info.
December 31 stretching it a bit though surely?

How long after signing can you file?

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Paul Waine » Wed Jan 13, 2021 12:33 am

WalkdenClaret wrote:
Tue Jan 12, 2021 11:51 pm
I'm no accountant but on 30th December we appeared to £40-50m in the bank, debt free.
on 31st December, we appear to have £0 bank balance, plus a new debt of £60m

To use the mortgage analogy.
I'm getting on a bit, the house is a bit tired, there's stuff to do. I'm mortgage free, but at least i've got £400-£500 quid to replace that nice, solid but ageing front door or buy a mid-range, nothing special microwave that might not produce flambeed feasts but will regularly knock out a good, solid back of the net Lasagne on a regular basis.

I was a bit concerned that I couldn't afford a great big solid barn door to keep me safe from the terrors of the Championship and I yearned that top of the range, Swarovski Microwave.
This chappie heard about my woes and bought my house, he promised to pay cash, and upon handing over the house, gave me the promised £400-£500 quid.

For some reason, I am now renting my old house and owe chappies mate £600 for which he's gonna charge me £72.50 and the £400-£500 has disappeared so I can't even afford a lasagne, never the microwave or new front door. It suddenly feels little chilly.

Exciting times ! UpTheClarets, all fingers crossed that it works out in the end
Hi Walkden, nice story, but it's not what has happened with respect to BFC. How are you managing to remain living in the house that you've just sold? Surely, the new owners will have moved in and you will be living in a new house, one that you've bought with the money you received from the sale of your previous one.

I'm not sure we can make it work if you don't own the first house, but instead rent it from the landlord who owns it. It get's a little closer the the BFC story if it's the landlord who has cash in the bank at the same time as doing a deal to sell the house to new landlords. To keep the theme going, the first landlord owns the house outright (they've been the owner a long time) and doesn't owe any money, i.e. have a mortgage on the house. The new landlord, however, needs a mortgage and uses this mortgage to pay help buy the house from the previous landlord. So, now the new owner owns the house and has a mortgage to help them buy it.

Let's change it a little, it's not a house that's been sold, but a building where the property owner runs a business. Let's say the business makes widgets - and you can do all sorts of fantastic things with widgets. The business employs people and pays them, in part, monthly and once a year the employees have the prospect of a very decent bonus. In addition, the business sells what it makes, some of the sales are "wholesale" to a limited number of very big customers. These wholesale customers only pay the business twice a year, once in September and the second time, depending on agreed performance parameters, in June. There are also retail customers, some of these pay to receive the product over the year others are occasional or walk-on customers. The revenue from retail customers is small relative to the wholesale revenues. Some times, things can happen that prevent the sales to the retail customers.

So, the landlord sells both their property and their business to a new landlord. The new landlord, as before, borrows money to pay the old landlord. The new landlord also looks at the business and realises that there is a large cash balance - a lot of this has come from the September money received from the wholesale customers. The landlord uses this money to pay the people who work in the business. Of course, there's a large balance held by the business because money came in in Sept and money goes out every month. On 31st Dec, when the business was bought by the new landlord, there was money waiting to pay the workers (and other business expenses) for the next 6 months. However, the new landlord is clever and decides they can save a little bit on the mortgage interest by using some of this money towards the purchase price and filling this gap in the money required to pay the workers by raising new money over the coming months. Maybe they will start out adding to the mortgage. Maybe they will find ways to borrow at lower rates than they had to do for the mortgage. Over time, however, they will generate new revenue streams and this new money will start to build everything up for the long term.

So, the new owners have the property and the business that they want to own and the old owners have a nice tidy sum in the bank. Maybe when the travel restrictions are eased, the old owners will be sunning themselves somewhere on a beach. Though, maybe they will also be keeping an eye on things because the new owner has promised to pay them the rest of the agreed purchase price over the new 3 years, depending how well the business runs.

Of course, this is all Aesops fables (have I spelt that right?) and this is a football message board.

Exciting times.

UTC

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Chester Perry » Wed Jan 13, 2021 12:37 am

NewClaret wrote:
Wed Jan 13, 2021 12:24 am
Assume the BFC financial year links to the season, in which case 19/20 accounts will only relate to what happened up to the end of the financial year for which this transaction was not a part. I seem to remember last years results being filed in March, so presumably we’ll see 19/20 results in March 21 (exc this transaction - when we’ll know how much cash we had heading in to the summer window) and 20/21 results (inc this transaction) in March 22.

Not a get out - completely normal and expected.

Then the accounts for the various ALK companies, that you may need to piece it all together, could run on different financial years so be filed after March 22.

Wont matter so much when we’re in the Champions League that season. :D

Exciting times.
I understand that it is normal (I could be wrong) to add significant transactions/commitments post year end (eg summer transfers in and out are regularly mentioned)

It was announced in the summer that 2019/20 year end would move to the end of July (13 month season) which pushes deadline for accounts publication out to early May

are the exciting times the multiples of profit ALK are looking to make on their investment - if you are them or an investor in them - I could see how that is exciting , but as a fan I may have increased levels of endorphins and heart rate over the new deal that sees debt laden on the club and no plan to remove it, but I do not equate that with excitement in this case

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Paul Waine » Wed Jan 13, 2021 12:40 am

dsr wrote:
Wed Jan 13, 2021 12:30 am
Major post balance sheet events have to be reported even though they didn't happen during the year. So if the accounts for the period ending last summer were not yet finalised, they would have to include an outline of what has just happened. If the accounts have already been signed, they won't have to have that info.
Hi dsr, I imagine that the accounts for the accounting period to 30-June-2020 (or was it extended to 31-Jul-2020) will have been audited and signed by the old board well before any sale and purchase agreement was entered into for the transfer of 84% of the shares.

I don't think the signing of the accounts and filing them with Companies House as to be around the same time.

It will be interesting to see how much is said about the sale of the club as post-balance sheet events. Thinking back to the 2018/19 accounts, which were filed at the end of March (or early April) last year, was the signing of Josh Brownhill mentioned? Or was it just the transfer window activity from the previous summer?

Exciting times.

UTC

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by dsr » Wed Jan 13, 2021 12:46 am

Paul Waine wrote:
Wed Jan 13, 2021 12:33 am

So, the landlord sells both their property and their business to a new landlord. The new landlord, as before, borrows money to pay the old landlord. The new landlord also looks at the business and realises that there is a large cash balance - a lot of this has come from the September money received from the wholesale customers. The landlord uses this money to pay the people who work in the business. Of course, there's a large balance held by the business because money came in in Sept and money goes out every month. On 31st Dec, when the business was bought by the new landlord, there was money waiting to pay the workers (and other business expenses) for the next 6 months. However, the new landlord is clever and decides they can save a little bit on the mortgage interest by using some of this money towards the purchase price and filling this gap in the money required to pay the workers by raising new money over the coming months. Maybe they will start out adding to the mortgage. Maybe they will find ways to borrow at lower rates than they had to do for the mortgage. Over time, however, they will generate new revenue streams and this new money will start to build everything up for the long term.
What this paragraph is saying is that before the takeover, the business had cash in hand to pay the workers; after the takeover, that cash has all gone, the business has a mortgage, and will need to take out more mortgages to carry on paying the workers. Exciting times indeed. As the Arab curse used to be, "May you live in exciting times".

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by dsr » Wed Jan 13, 2021 12:50 am

NewClaret wrote:
Wed Jan 13, 2021 12:32 am
December 31 stretching it a bit though surely?

How long after signing can you file?
You can sign the day after the year end in theory, though in practice you would never get an auditor to sign his bit. But the accounts can be signed as soon as they are ready. But the accounts do need to refer to anything major that has happened between year end date and signature date.

The filing date is independent of the date of signature. The filing date is 9 months after year end. It doesn't matter if the factory has blown up and the boss's wife has run off with the insurance money, those accounts won't alter for anything that happens after the date of signature, even if you have sat on them for 6 months.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by CrosspoolClarets » Wed Jan 13, 2021 11:00 am

arise_sir_charge wrote:
Tue Jan 12, 2021 8:04 pm
Until they provide evidence and name sources then yes it is.

I don’t get what you don’t understand about that.

Dande actually sums it up very well in one of his earlier posts about the risks and opportunities but the focus on here is all about the money aspect which as yet is guesswork.

This is further shown by Dsr saying that £55m of club coffers have been spent and there is no money left.

It’s an absurd quirk of this messageboard that there never seems to be a middle ground.

As for DA and his comments about wait and see, I stick by that. I’ll decide if this was good or bad in the fullness of time as quite frankly there is nothing that I can do about it in any event!
Probably worth adding to this that whilst I don’t generally disagree with pragmatic viewpoints about risks and opportunities, for those of us who make a living out of financial advice to companies (as opposed to audit or accounts preparation) having to predict “unknowns” about the money is part of the job. I remember once having to advise a £1bn+ organisation and even though they had accounts audited and signed off, their general financial management was shambolic, they didn’t even know themselves what some of their financials were, and I had to estimate it the best I could and advise accordingly. In short, I’m confident I know more about BFC finances, just by looking and listening, that I do about many of my clients.

I think my point is, that yes we don’t know everything, but I suspect some of us have hit the bullseye closer than many think. We’re used to doing this stuff. I wouldn’t want to be disrespectful of the new owners by discussing things in an inappropriate way, but as lifelong fans we are stakeholders in the club and it feels fair to highlight that the risk profile is now changed considerably, although the new owners may turn out to be fantastic for us, we have to wait and see.

Ultimately, there are 2 things we should like to know before focusing on the fun stuff, i.e. the football:
1. What are the long term plans if we stay in the PL? Stands, players, apps etc.
2. What is the contingency plan(s) if we go down in the coming years, is there still a workable strategy?
This user liked this post: scouseclaret

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by keith1879 » Wed Jan 13, 2021 11:23 am

WalkdenClaret wrote:
Tue Jan 12, 2021 11:51 pm
I'm no accountant but on 30th December we appeared to £40-50m in the bank, debt free.
on 31st December, we appear to have £0 bank balance, plus a new debt of £60m

To use the mortgage analogy.
I'm getting on a bit, the house is a bit tired, there's stuff to do. I'm mortgage free, but at least i've got £400-£500 quid to replace that nice, solid but ageing front door or buy a mid-range, nothing special microwave that might not produce flambeed feasts but will regularly knock out a good, solid back of the net Lasagne on a regular basis.

I was a bit concerned that I couldn't afford a great big solid barn door to keep me safe from the terrors of the Championship and I yearned that top of the range, Swarovski Microwave.
This chappie heard about my woes and bought my house, he promised to pay cash, and upon handing over the house, gave me the promised £400-£500 quid.

For some reason, I am now renting my old house and owe chappies mate £600 for which he's gonna charge me £72.50 and the £400-£500 has disappeared so I can't even afford a lasagne, never the microwave or new front door. It suddenly feels little chilly.

Exciting times ! UpTheClarets, all fingers crossed that it works out in the end
I think the key word here is "appear".

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Vegas Claret » Wed Jan 13, 2021 11:27 am

DCWat wrote:
Tue Jan 12, 2021 6:51 pm
I do like that Pace is at least acknowledging the concerns. Aside from keeping quiet though, he’s hardly saying anything different to what we’d expect to hear.

That said, I am actually inclined to trust the bloke. Stupid as that sounds with so little basis for such a conclusion.
there's more reason to trust him than not at this stage

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by aggi » Wed Jan 13, 2021 11:32 am

Paul Waine wrote:
Wed Jan 13, 2021 12:40 am
Hi dsr, I imagine that the accounts for the accounting period to 30-June-2020 (or was it extended to 31-Jul-2020) will have been audited and signed by the old board well before any sale and purchase agreement was entered into for the transfer of 84% of the shares.

I don't think the signing of the accounts and filing them with Companies House as to be around the same time.

It will be interesting to see how much is said about the sale of the club as post-balance sheet events. Thinking back to the 2018/19 accounts, which were filed at the end of March (or early April) last year, was the signing of Josh Brownhill mentioned? Or was it just the transfer window activity from the previous summer?

Exciting times.

UTC
Brownhill was disclosed in the last accounts as they weren't signed off until February.

A takeover would have to be disclosed as a post balance sheet event but, as others have said, I'd be amazed if they weren't signed off before the takeover happened.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by aggi » Wed Jan 13, 2021 11:34 am

arise_sir_charge wrote:
Tue Jan 12, 2021 8:04 pm
Until they provide evidence and name sources then yes it is.

I don’t get what you don’t understand about that.

Dande actually sums it up very well in one of his earlier posts about the risks and opportunities but the focus on here is all about the money aspect which as yet is guesswork.

This is further shown by Dsr saying that £55m of club coffers have been spent and there is no money left.

It’s an absurd quirk of this messageboard that there never seems to be a middle ground.

As for DA and his comments about wait and see, I stick by that. I’ll decide if this was good or bad in the fullness of time as quite frankly there is nothing that I can do about it in any event!
Neither side has provided evidence (and what evidence is in the public domain supports the Matt Slater story) but you only seem willing to give the benefit of the doubt to one side.

I agree that a lot seem to struggle with a middle ground but you seem to be as guilty of that yourself.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by aggi » Wed Jan 13, 2021 12:38 pm

I see that Southampton’s loan with MSD Holdings is ~ £80m with interest at 9.14% giving an annual interest charge of £7.2 million. Probably gives a flavour of what we may be looking at if the reported figures are correct.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Chester Perry » Wed Jan 13, 2021 12:53 pm

aggi wrote:
Wed Jan 13, 2021 12:38 pm
I see that Southampton’s loan with MSD Holdings is ~ £80m with interest at 9.14% giving an annual interest charge of £7.2 million. Probably gives a flavour of what we may be looking at if the reported figures are correct.
smack bang where Matt Slater said - unless fees and early payments were rolled up -

of course this was nearly 6 months earlier than ours and before talk of a 2nd lockdown never mind a 3rd and the surge in new cases around the world and it's consequent impact on the global economy - for balance I will add that the vaccines have generated some positivity on the medium term economic outlook

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Paul Waine » Wed Jan 13, 2021 1:08 pm

dsr wrote:
Wed Jan 13, 2021 12:46 am
What this paragraph is saying is that before the takeover, the business had cash in hand to pay the workers; after the takeover, that cash has all gone, the business has a mortgage, and will need to take out more mortgages to carry on paying the workers. Exciting times indeed. As the Arab curse used to be, "May you live in exciting times".
Hi dsr, what it also says it that the new owners of the club will understand their cashflow commitments and requirements and know that if they choose to use the money in the bank today to buy the club from the previous owners (or any other purpose) they will also need to replace that cash from elsewhere before they need to meet the monthly wage bills and other commitments. There's no point having money sitting in the bank earning next to nothing - because that's where interest rates are for money on deposit - meanwhile borrowing expensively from MSD at (say) 10% when that reflects the market interest rate for football club borrowings.

Exciting times.

UTC

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Paul Waine » Wed Jan 13, 2021 1:11 pm

aggi wrote:
Wed Jan 13, 2021 11:32 am
Brownhill was disclosed in the last accounts as they weren't signed off until February.

A takeover would have to be disclosed as a post balance sheet event but, as others have said, I'd be amazed if they weren't signed off before the takeover happened.
Thanks, aggi. It was too late last night for me to check these items in the 2018/19 accounts.

Exciting times.

UTC

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by KRBFC » Wed Jan 13, 2021 1:14 pm

WalkdenClaret wrote:
Tue Jan 12, 2021 11:51 pm
I'm no accountant but on 30th December we appeared to £40-50m in the bank, debt free.
on 31st December, we appear to have £0 bank balance, plus a new debt of £60m
The new chairman has already said the figures are inaccurate and nowhere did he say we have £0 in the bank balance. Are we just ignoring him and choosing not to believe him? for me there’s unanswered questions but people’s insistence to keep going on and on using incorrect figures is strange.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Paul Waine » Wed Jan 13, 2021 1:15 pm

aggi wrote:
Wed Jan 13, 2021 12:38 pm
I see that Southampton’s loan with MSD Holdings is ~ £80m with interest at 9.14% giving an annual interest charge of £7.2 million. Probably gives a flavour of what we may be looking at if the reported figures are correct.
Hi aggi, where are you seeing these details on Soton's loan? Is there any data that is public domain on how MSD are funding their loan to Soton?

Of course, I'm interested if there's anything we may learn from MSD loan to Soton re the terms of MSD's loan to BFC (or ALK Capital) ad how it might have been structured. I've seen mention on here that MSD issued some notes which may have been related to Soton borrowings. I'd be interested if we could learn anything from those MSD notes.

Exciting times.

UTC

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by dsr » Wed Jan 13, 2021 1:31 pm

Paul Waine wrote:
Wed Jan 13, 2021 1:08 pm
Hi dsr, what it also says it that the new owners of the club will understand their cashflow commitments and requirements and know that if they choose to use the money in the bank today to buy the club from the previous owners (or any other purpose) they will also need to replace that cash from elsewhere before they need to meet the monthly wage bills and other commitments. There's no point having money sitting in the bank earning next to nothing - because that's where interest rates are for money on deposit - meanwhile borrowing expensively from MSD at (say) 10% when that reflects the market interest rate for football club borrowings.

Exciting times.

UTC
I have a suspicion that if someone emptied your bank account and took out a mortgage on your behalf, you wouldn't be quite so appreciative.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Chester Perry » Wed Jan 13, 2021 1:34 pm

Paul Waine wrote:
Wed Jan 13, 2021 1:15 pm
Hi aggi, where are you seeing these details on Soton's loan? Is there any data that is public domain on how MSD are funding their loan to Soton?

Of course, I'm interested if there's anything we may learn from MSD loan to Soton re the terms of MSD's loan to BFC (or ALK Capital) ad how it might have been structured. I've seen mention on here that MSD issued some notes which may have been related to Soton borrowings. I'd be interested if we could learn anything from those MSD notes.

Exciting times.

UTC
Southampton posted their results last night and announced it as a post balance sheet event

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Last edited by Chester Perry on Wed Jan 13, 2021 2:11 pm, edited 1 time in total.

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