GetIntoEm wrote: ↑Fri Feb 28, 2025 10:54 pm
Good news on the debt repayment. Well done Pace and co
CharlieinNewMexico wrote: ↑Sat Mar 01, 2025 3:02 am
£80 mill in the bank but with playing assets like Jon Walters, Scott Arfield and Matt Lowton. Now we have £100mill + playing assets.
The thing we are never likely to a a very definite answer for is whether all this financial bouncing around has actually been of overall benefit for the club. All of the following occurred whilst the club pulled in over £200m of revenues that did not include player trading
Essentially if the new capital debt balance is £40m, then it is slightly more than the £39.7m of mid November 2022, which was somewhat more than the £32.3m balance of late August 2022 (the difference potentially being the early repayment penalty to MSD and possible the loan fee for the November 2022 loan - of course the club had already paid MSD £20m in enforced repayments on relegation, a further £12.7m in voluntary early repayment (presumably with an early redemption penalty) and at least £11m in interest
That £39.7m loan was supposedly reduced to around £33m by April 2023 so a £6m-£7m capital repayment not forgetting the interest of around £1.7m by the time the loan was replaced by one for £70m in June 2023 that required between 12.5% and 13.2% in annual interest and contained a capital repayment plan - It is worth noting that the annual interest was roughly aligned to the new expected match day incomes following the price increases.
Alongside that loan was a factoring deal over 3 years of Premier League revenues (based on 1 year of Prem money and two years of parachute payments) that too carries a lost revenue value in the accounts (and yes I know it has less of a cash impact because of inflation).
So good were those June 2023 deals that they were replaced again in January 2024 with a new loan of an as yet undeclared value (probable early redemption penalties and also new loan arrangement fees) also because of the nature of the new lender the factoring deal had to be paid up early via a loan from the new lender that would require further interest payments on a sum that had already seem and upfront charge when first factored.
To get to a £40m capital debt balance with a 4th new lender 26 months will have required a net debt repayment of somewhere £26m - £50m (depending on the overall loan balance, for which we can only give a range estimate), probable early redemption penalties (we still don't know if relegation triggered enforced capital repayments) and interest payments of between £7.5 £10.5m. Not to mention the likely loan fee with Fasanara Capital and the brokers who set it up.
Those are all tangible costs - though we are unlikely to ever know the true total of them/ Some may argue that the profits on player trading have made up for that - we may never know that answer either, because the actual cash flow from sales is a drip feed not a sudden influx.
Not that all the additional borrowed monies went on player recruitment - Promotion in May 2023 meant that Calder Vale Holdings borrowed circa £9.1m to make the final bonus payment to the original 7 director sellers, players and coaches likely received somewhat more and facility upgrades were required to meet newly revised Premier League requirements.
There is also the intangible cost to factor in - the club became a lot more unstable as an entity, particularly on the playing side, which led to what we now know to a deeply divided and unsettled playing and coaching staff. The impact on the town and fanbase has also to be factored in. Even BFC in the Community saw it's funding alter in 3 different seasons, which has had a direct impact on what it is able to do and who it is able to employ (the club provides little in cash terms for it - the majority of it's funding comes from the Premier League and other sources.
Spike wrote: ↑Fri Feb 28, 2025 10:28 pm
Is this correct that the debts for the club are £40m
Do ALK have any obligation to repay the £60m that was in the bank when they rode in ?
Could they sell the club and pocket everything above the £40m
1 - it is looking that way
2 - Actually yes they do. but there are ways to do that which would mean they don't have to dip into their own pockets to do so. Also there is no timeframe as to when it has to be done and of course no interest to be paid on it. With inflation, the true value of the debt is diminishing all the time (that is why it is standard practice to pay interest on loans)
3 - It is possible to sell the club with it's capital debt intact - it is the club's debt after all. Some arrangement would have to be made over the £124.07m they owed the club - it would be factored into the selling price. My reckoning is that the ALK/VSL ownership group have a net £60m or so in share spend (after the flip to Vladimir Torgovnick), that is the net number they are looking to exceed in any return from a sale for their 90% shareholding. It would be entirely possible for a new owner to buy Velocity Capital (UK) Holding Ltd and still hold the £124.7m debt there, they would also have the opportunity to enforce the purchase of the shares from all other shareholders.
What theoretically makes that interesting from a cash buyers perspective is that they could buy 100% of the club relatively cheaply and have the opportunity to provide an influx of cash into the club via a future loan repayment from VCUKHL. Of course, the previous owners spent 7 years looking for such a cash buyer, they are thin on the ground for a club such as ours
ecc wrote: ↑Fri Feb 28, 2025 11:29 pm
£40m is unhealthy but if we make it back to the PL we could potentially begin to wipe out that debt, couldn't we?
Stonehouse wrote: ↑Sat Mar 01, 2025 7:56 am
At least we appear to be heading in the right direction which is more than get be said for the likes of Man U and that lot down the road..
It could be very reasonably argued that the probable current state of debt is merely a holding position that can be rapidly changed if promotion does come - remember all those obligations to buy and promotion bonuses have to be paid for somehow. We have done it brfore and It would be of little surprise if it happened again.
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