Author Topic: A Bridging Loan Too Far  (Read 14078 times)

Offline ttnbd

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A Bridging Loan Too Far
« on: January 30, 2008, 06:15:54 pm »
As expected there’s been a lot of consternation about the refinancing package procured by Gillett and Hicks.  Hopefully the following can allow a better understanding of the implications of the agreement and what the club needs to achieve to service this debt.

One thing I need to stress is that the figures in general are subjective as the latest set of accounts available for LFC relate to 1st August 2005 to 31st July 2006, while there are no accounts available for Kop Football (Holdings) Limited.  Once those are available a better analysis can be made as to what went on in the immediate aftermath of the takeover.

Liverpool Football Club –

£45m working capital to refinance existing club debt, thus freeing up short term cashflows.  This takes the repayment of existing debt from less than 1 year to more than 1 year.  As a result the overdraft the club had is likely to have been cleared.

£60m capital for preliminary work on new stadium in Stanley Park.  Until this starts the cash would either not have been drawn down from the bank, or it will be sitting in the clubs account accruing interest.  This debt should not be a big issue, as the stadium is a club asset and should be paid for out of the clubs finances.  The ultimate aim being for the stadium to pay for itself through increased revenues.

Total - £105m

At an approx interest rate of 8% this gives the club an annual interest charge of £8.4m.  Up to £3.6m of this will already have been going through the clubs books, depending on how the clubs existing debt was structured

This debt will be secured against the assets of Liverpool Football Club and Athletic Grounds Limited, this will be to ensure that the bank has a fall back if repayments are not maintained.  At the last available balance sheet date (31 July 2006) these stood at approx £140m.  However £80m of this asset value relates to players registrations and reduce in value by approx £25m per season without further investment.  So a £25m net investment is required each season to maintain the asset value at £80m.  The bulk of the remaining assets are the clubs freehold land, leasehold land and buildings.  Since one of these buildings is a football stadium, it is only the land it sits on that is of real value to anyone other than a football team.

Fans are understandably worried that players may be sold to fund the debt taken out.  However the debt on the club will have strict covenants attached.  Sometimes the club will take out a loan to purchase a player, the aim being to free up short term cash flows, and as a result they will use the players book value as collateral against the loan. The bank attaches a covenant (restriction) that if the player is sold in the period of the loan then the bank has the right to call in the debt immediately.  I suspect that this type of covenant will remain in place for the new debt placed on the club. 

As a result the holding company cannot use the clubs assets as collateral for the loan on it’s books.  What I believe they have done is secure the loan against the value of the shares, with personal guarantees from Gillett and Hicks.  This means that club assets cannot be sold to pay off the holding companies debt.  Also the subsidiary (LFC) is not liable for the debts of its parent company (Kop).  The likely result if Kop defaulted (or risk of defaulting) is that LFC is sold on to a third party as a fully going concern as they have more chance of getting their money back like this.

Kop Football (Holdings) Limited –

£174m to refinance borrowings to purchase shares

£11m to refinance costs of raising original finance

£24m, approx interest charge on original debt (assuming £298m borrowed originally)

£11m, approx cost to refinance debt.

£25m, extra finance taken.  Reason unknown but it maybe for covering the following years interest payment.

Total - £245m

At an approx interest rate of 8% giving an annual interest charge of £19.6m.

From all reports at present this debt is due to be either refinanced or repaid in 18 months time.  This may be when the next tranche of debt is required for the stadium project, but it suggests to me that the debt is, atleast initially, interest only.  Meaning the principal will not start being repaid until after the stadium opens.


Payment of the debt of Kop Football (Holdings) Limited

This can be done either by dividends paid from LFC to Kop, or via an inter-company loan from LFC to Kop.

In order for dividends to be paid the club must have distributable reserves available.  This mean profits must be available as well as the available cash flow to pay the dividends.  Without profits there are no dividends.  So for them to be able to fund the interest obligations of Kop, LFC would have to make pre-tax profits of over £19m per year.  Meaning an approximate operating profit of £30m per year (assuming transfer activity remains at levels it has been over the last few years) before profit/loss from sales of players.  Last time this was reported LFC made an operating loss of approx £9.8m and a pre-tax loss of £5.1m.  For the dividends to be paid the club would have to in the region of £19m in free cash flow each season, to at least break even cash wise.  The equates to an approximate £45m if transfer activity were to remain at present levels.

Inter-company loan can also be used to transfer cash to the parent company.  This is an advantage to Gillett and Hicks as profits are not necessarily needed to perform the transaction.  As long as the club has the cash it can be done any time.  The result of this is that Kop gets the funds it needs, however it remains in debt, albeit to it subsidiary LFC.  In the event of a possible takeover this would be the least favourable solution for Gillett and Hicks as most, if not all proceeds, would go back to LFC.

Projected operating cash flow 2007/08 & 2008/09

2006 Operating Cash flow £22.1m

New TV Deal increase of £15m

Carlsberg Renewal increase of £2.2m

Setanta deal approx £1m per year (unknown figure so using estimate)

Increased gate receipts (7% price increase) £2.3m

Increased net merchandise sales £1m increase estimate

Decrease in European cash flow (£4m), assuming not getting past quarters in europe

Net Increase general wages for players (£5m)  (New contracts, sales, purchases)

Estimated post 31 July 2007 operating cash flow £36.6m

That’s the cash flow available before financing, and purchase/sale of fixed assets.  If those estimates are correct then the operating cash flows are sufficient enough to cover the debt, but it’s getting close and leaves no room for investment in players.  But investment in players is needed to maintain sufficient levels to get through to quarters in Europe and ensure capacity crowds.

Projected operating cash flow 2009/10

2009 Operating Cash flow £36.6m

Adidas Renewal increase of £3m per annum

Increased gate receipts (7% price increase) £2.3m

Increased net merchandise sales £1m increase estimate

Estimated post 31 July 2009 operating cash flow £42.3m

New Stadium

Cost £300m

Capacity 71,000
Corporate seats 9,000 (£150 (excl VAT per seat per game)
Exec Boxes 110 (£50k excl VAT)
Regular Fans approx 60,000 (£34 per ticket excl vat, equiv £40 per ticket in 3 years)

In a 19 league game season this will bring in an estimated revenue of

Corporate £25.65m
Boxes £5.5m
Regular Fans £38.76m
Total £69.9m (assuming capacity crowds at above prices)

In a 24 home game season (league, 4 europe and 1 other cup)

Corporate £32.4m
Boxes £5.5m
Regular fans £48.96m
Total £86.86m (again assuming capacity crowds and corporate seats are sold on a game by game basis, boxes sold on a seasonal basis)

This is an approx increase of between £30m and £54m on revenue compared to current ticket revenues of £33m.

Also the extra 25,000 fans may spend other money on a matchday, for arguments sake £5 per person per game gives between £2.3m and £3m per season.  Add in potential naming rights, for example £3m per season.

Financing the stadium.

Assuming all debt finance at 8% per annum over 25 years.  On a mortgage basis this gives annual repayments of approx £28m.

As has been reported both Gillett and Hicks met with DIC with regards a capital injection of cash for the stadium project.  The following shows why they considered it.  This is reported as £150m.  If this were to happen it would reduce the need for loans to £150m and leave annual repayments of just £14m, instantly freeing up £14m of any future cash/profits.  Over the 25 year life of the loan it would save in the region of £150m in interest.

This is why the stadium is important, and why they went to DIC and why they are still talking to them.  Without the stadium their refinancing plan will have more holes in it than a sieve, and it will be them left to foot the bill for the purchase debt.

The term of the refinancing

It has been reported that the refinancing has a term of only 18 months.  This signals one of a couple of options.

1.   They hope to refinance at better terms in 18 months when the credit markets have calmed down, a risky proposal but gives a bit of breathing space.
2.   They have taken a short term bridging loan while they continue negotiations with DIC over a possible involvement, either purchase of existing shares or new shares.

Given the rumours that have been abound on various sites, and through own friends at games, the DIC involvement is real, which suggests the loan is only temporary while negotiations continue to reach a satisfactory conclusion. It allows the stadium to start, without tying in the loans to long term contracts.

Conclusion

The club is likely going to pay the debt of the holding company, either through dividends or inter-company loans, however to do this the club has to be successful both financially and on the pitch.  Also there is no legal obligation for it to pay the holding companies debts.  Missing out on European cup action is going to be hard to stomach for the club.  One thing to go slightly in their favour on this is that they now the top 3 go straight into the group stage, thus guaranteeing the group stage money (tv, tickets and uefa) straight away.  The new premier league tv deal has helped, while the potential new sponsorship deals can also help.  But ultimately the new stadium is a must and this debt will be the main reason the stadium will be 71,000 if they are to remain for the long haul.

Will DIC come in and do things differently?  No-one really knows, they may see the fallout from all this and do things slightly differently but I expect much of it to be similar financially.

Will the stadium be financed by debt?  Probably initially, although do not be surprised if there is an equity injection from a third party for shares, as well as vastly improved sponsorship deals.


What happens if Kop Football (Holdings) Limited defaults

This is a hot topic at the moment as can be seen from other threads.  Some are claiming that the clubs assets can be sold off to pay for the outstanding debt of the holding company.  This is infact inaccurate.  The debt on the clubs books will be secured on the clubs assets.  This means that, unless required for reinvestment, any proceeds from sales of assets by the club will have to go to servicing the club level debt first and foremost.  The club is not in a position to be asset stripped due to the main nature of the clubs assets.  For as long as there is debt on the clubs books there must be an equal value of assets, especially in the current financial climate, to secure as collateral.

In the event of the club defaulting the banks would do the following.

The first thing is to look for a buyer for the club, they have more chance of maximising the return by selling the club as is, as a going concern with all assets in place, than selling a vastly asset stripped club.  Then if the sale value is not enough to cover the debt outstanding they would then go to the personal guarantees provided by Gillett and Hicks to obtain the remainder.

© ttnbd 2008
« Last Edit: January 31, 2008, 05:03:50 am by Rushian »
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Offline Red_in_Holland

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Re: A Bridging Loan Too Far
« Reply #1 on: January 30, 2008, 06:36:08 pm »
Thanks for the effort put in there, mate.  Much appreciated.

My main worries are for when this current refinancing becomes due in mid 2009.   I take it they have put the first years interest payment in this current loan.  Be interesting to see if we manage top four this season and next, especially if the player investment is meagre, and indeed if our current manager is still at the club.

I see this fraught with danger if Hicks ups stakes and sells to the highest bidder, which may not be DIC at all by that time.

It may all make perfect business sense, but with especially Hicks' lack of empathy (in my eyes) for our visions of actually trying to win titles and trophies, this will be noted by especially available players, which will not wish to join a club that is  not prepared to invest in the player base.  Players like to join teams they feeling are pushing for trophies, not just settling for a top four finish to finance a stadium to fill the owner's pockets.

That may be my very simplistic view, but I see us struggling to attract anyone to LFC, a club that once was a privilege to join.

Unless the owners surprise me and invest in our success they are doomed to failure, dragging us down with them.  They have totally no idea of Europe, this is NOT the USA where this method of business management is standard.

Again thanks for explaining at least how the refinancing is constructed in one thread.  Hopefully this will save you having to repeat it another 100 times.

;)

RiH

« Last Edit: January 30, 2008, 06:37:45 pm by Red_in_Holland »
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Offline JordanR

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Re: A Bridging Loan Too Far
« Reply #2 on: January 30, 2008, 06:42:46 pm »
Thanks very much mate, most definitely appreciated that  :)

Offline jono b

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Re: A Bridging Loan Too Far
« Reply #3 on: January 30, 2008, 06:44:16 pm »
Thanks for that, interesting stuff.
So in reality Kop holdings will only be able to load more than the £105m on the club if we are successful? If we are successful then I presume our operating profits would cover the interest repayments especially when you factor in new stadium revenues. If things take a turn for the worse on the playing side then the Yanks would most likely be forced to find a buyer, DIC? This is surely a more positive outlook

Offline southern scouse

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Re: A Bridging Loan Too Far
« Reply #4 on: January 30, 2008, 06:44:19 pm »
As expected there’s been a lot of consternation about the refinancing package procured by Gillett and Hicks.  Hopefully the following can allow a better understanding of the implications of the agreement and what the club needs to achieve to service this debt.

Brilliant and written as to be eaily understood (ish)

So, from your conclusion, you still think DIC are in for real, as I keep saying they still wont put out any official denial that they are ineed in talks to buy half/all of LFC

Simple but it keeps me going

What you both think?

Offline RedBoywonder

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Re: A Bridging Loan Too Far
« Reply #5 on: January 30, 2008, 06:44:32 pm »
Whats the odds on all this appearing in a few newspapers tomorrow as an exclusive?
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Offline ttnbd

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Re: A Bridging Loan Too Far
« Reply #6 on: January 30, 2008, 06:49:25 pm »
southern, from what has been said recently there is something going on with regards to DIC or A.N.Other, which is hopefully a good thing.  I was told early new year that it was more or less nailed on the club would be sold again this year and to DIC.  Can't attest to the validity of the claim but it's a case of wait and see.  I think that Gillett and Hicks are realising they are biting off more than they can chew, hence the approach to DIC in October to buy a new issue of shares.
So all say thanks to the Shanks

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Offline southern scouse

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Re: A Bridging Loan Too Far
« Reply #7 on: January 30, 2008, 06:53:10 pm »
southern, from what has been said recently there is something going on with regards to DIC or A.N.Other, which is hopefully a good thing.  I was told early new year that it was more or less nailed on the club would be sold again this year and to DIC.  Can't attest to the validity of the claim but it's a case of wait and see.  I think that Gillett and Hicks are realising they are biting off more than they can chew, hence the approach to DIC in October to buy a new issue of shares.

ttnb

many thanks for the update and all makes logical sense, no smoke without fire and until DIC say no thanks, that keeps the hope in my heart ;D ;D

Offline Walter Sobchak

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Re: A Bridging Loan Too Far
« Reply #8 on: January 30, 2008, 06:59:22 pm »
cheers for taking the time to explain all that.
very much appreciated.




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Re: A Bridging Loan Too Far
« Reply #9 on: January 30, 2008, 07:00:10 pm »
Will DIC come in and do things differently?  No-one really knows, they may see the fallout from all this and do things slightly differently but I expect much of it to be similar financially.

I get continually pissed off when people say DIC will do exactly the same. But there's a huge difference if they did the same; they can afford it if it all goes tits up.

I'd rather be in debt to tune of £750m with DIC in charge than £300m with these American clowns. 

Once you start defaulting on the loan repayments you're on the slippery scale and you're fucked. Leeds went from CL Semi finalists to League 1 in 7 years. It will probably take less time for us. If we're lucky. This is the reason why people on here are extremely concerned with the mountain of debt G and H have taken on. Because it's just too unmanageable for them and extremely risky. A powerful and wealthy organisation like DIC will never let a Leeds like scenario happen to them.; Why? Because their world wide reputation depends upon it, and £750m is loose change.

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Offline Rhino

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Re: A Bridging Loan Too Far
« Reply #10 on: January 30, 2008, 07:04:28 pm »
Tim, thanks for the time taken to put that together, just a couple of points.

From the last set of account, the total debt of £45m was £24m in bank loans and £21m 'trade creditors', which I assume the majority of that was transfer fees not yet due.

If that's the case, why have they taken £45m to cover existing debt, if £21m of it is not due as yet?

Also, the different scenario's for the new stadium is compiled with figures showing near maximum revenues i.e. 24/25 matches per season at full capacity.  Surely no business or bank would work of such figures and wouldn't a more prudent approach be to work on figures of say 19 matches at 85% - 90% capacity.

Finally, seeing as H & G own 100% of the holding company and of the club, would it not be fairly easy to change how both companies are structured in order to load more debt on the club, whilst also asset stripping by selling off players who were not subject to a transfer fee, such as Gerrard.

Offline southern scouse

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Re: A Bridging Loan Too Far
« Reply #11 on: January 30, 2008, 07:04:30 pm »
I get continually pissed off when people say DIC will do exactly the same. But there's a huge difference if they did the same; they can afford it if it all goes tits up.

I'd rather be in debt to tune of £750m with DIC in charge than £300m with these American clowns. 

Once you start defaulting on the loan repayments you're on the slippery scale and you're fucked. Leeds went from CL Semi finalists to League 1 in 7 years. It will probably take less time for us. If we're lucky. This is the reason why people on here are extremely concerned with the mountain of debt G and H have taken on. Because it's just too unmanageable for them and extremely risky. A powerful and wealthy organisation like DIC will never let a Leeds like scenario happen to them.; Why? Because their world wide reputation depends upon it, and £750m is loose change.



SSS

so true and I hope the the clowns have seriously damaged they own credibility so much, it cocks up their whole unethical LBO way of life

Suppose as ttnbd says, patience and time will tell if we get DIC, we just need to get out of this mess now

Offline Regi

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Re: A Bridging Loan Too Far
« Reply #12 on: January 30, 2008, 07:11:55 pm »
Tim,

I learned more from that post than I learned in 3 years at university.
Different subjects mind you...but I still learned more and given the situation the club is in, I'm more likely to fucking remember it too!

Muchos gracias amigo
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Offline StevieJ

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Re: A Bridging Loan Too Far
« Reply #13 on: January 30, 2008, 07:11:59 pm »
Great post ttnbd and brings a lot of clarity to muddied waters. 

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Re: A Bridging Loan Too Far
« Reply #14 on: January 30, 2008, 07:13:37 pm »
Great stuff, Tim, many thanks!  I can see this becoming a sticky for a while... :D
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Offline richmond-red

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Re: A Bridging Loan Too Far
« Reply #15 on: January 30, 2008, 07:18:50 pm »
Brilliant piece. Thank you very much !

Offline southern scouse

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Re: A Bridging Loan Too Far
« Reply #16 on: January 30, 2008, 07:20:19 pm »
Brilliant piece. Thank you very much !

hey Richmond, just asking, yr not based in Richmond, Surrey

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Re: A Bridging Loan Too Far
« Reply #17 on: January 30, 2008, 07:22:32 pm »
hey Richmond, just asking, yr not based in Richmond, Surrey


No, Richmond Viriginia

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Re: A Bridging Loan Too Far
« Reply #18 on: January 30, 2008, 07:22:38 pm »
Tim,

I learned more from that post than I learned in 3 years at university.
Different subjects mind you...but I still learned more and given the situation the club is in, I'm more likely to fucking remember it too!

Muchos gracias amigo

That's probably more to do with getting pissed and watching Trisha instead of going to lectures...  ;)
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Offline southern scouse

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Re: A Bridging Loan Too Far
« Reply #19 on: January 30, 2008, 07:23:53 pm »
hey Richmond, just asking, yr not based in Richmond, Surrey


No, Richmond Viriginia

fair point :wave

Offline Regi

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Re: A Bridging Loan Too Far
« Reply #20 on: January 30, 2008, 07:28:28 pm »
That's probably more to do with getting pissed and watching Trisha instead of going to lectures...  ;)


She was on telly too early for me...but you're on the right path
I was always up sharpish for re-runs of The Fall Guy, Knight Rider and The A-Team on vague ntl channels. Plus Pro Evo came out first at that time...I mean what chance was there of a decent education?

PS. Apologies for a shameless thread hijack
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Offline ttnbd

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Re: A Bridging Loan Too Far
« Reply #21 on: January 30, 2008, 07:28:54 pm »
Tim, thanks for the time taken to put that together, just a couple of points.

From the last set of account, the total debt of £45m was £24m in bank loans and £21m 'trade creditors', which I assume the majority of that was transfer fees not yet due.

If that's the case, why have they taken £45m to cover existing debt, if £21m of it is not due as yet?

Will probably be to do with cash management.  Taking it out of the short term frees up cash.  What this is then used for is unknown.  We also don't know what the accounts have looked like for the past 18 months/2 years.  Hopefully we'll soon have figures that are only a year out of date soon :P

Quote
Also, the different scenario's for the new stadium is compiled with figures showing near maximum revenues i.e. 24/25 matches per season at full capacity.  Surely no business or bank would work of such figures and wouldn't a more prudent approach be to work on figures of say 19 matches at 85% - 90% capacity.


True enough.  Could also be said that I've been a little on the low side with ticket prices, I've also not factored in the potential revenue from the redevelopment of Anfield plaza.  There's so many variables to consider that it'll take a fair while to do a decent long term forecast and Net Present Value analysis.

Quote
Finally, seeing as H & G own 100% of the holding company and of the club, would it not be fairly easy to change how both companies are structured in order to load more debt on the club, whilst also asset stripping by selling off players who were not subject to a transfer fee, such as Gerrard.

It would be difficult as there would have to be assets in place to support the debt.  As it is there isn't enough assets to do that.  Going by what we know about the DIC talks in October I would hazard a guess that the following was the aim.

Bring in a third party to inject capital, to the tune of £150m, to help pay for the stadium.

They also bring in stadium sponsorship to the tune of £50m+

This would leave around £100m to fund, ie the debt currently on the club.

When the stadium opens refinance.  Securitise future ticket revenues to bring in approx £300m to £350m, where after the club would do an intercompany loan to Kop Football Holdings to pay off it's debt.  Thus refinancing at favourable rates and terms.  Kop Football Holdings would still be in debt, but only to it's subsidiary.

Now whether the third party involved would allow this remains to be seen.
So all say thanks to the Shanks

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Re: A Bridging Loan Too Far
« Reply #22 on: January 30, 2008, 07:37:30 pm »
She was on telly too early for me...but you're on the right path
I was always up sharpish for re-runs of The Fall Guy, Knight Rider and The A-Team on vague ntl channels. Plus Pro Evo came out first at that time...I mean what chance was there of a decent education?

PS. Apologies for a shameless thread hijack


There should be a thread about what you really did in college..
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Offline murgaz

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Re: A Bridging Loan Too Far
« Reply #23 on: January 30, 2008, 07:41:06 pm »
A really well put together piece, thanks.

What this debt financing of the purchase of our club boils down to for me is this - We are being asked to fund the purchase of the club for G and H as all payments will come from the profits of the club (through dividends or loans as you point out). Paying for a new asset (the stadium) to be built is one thing, paying for their purchase of the club is quite another. We are in the same position united found themselves in. 
Would you pay for your neighbours house? that's the question we need to address now.

Offline MarkR

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Re: A Bridging Loan Too Far
« Reply #24 on: January 30, 2008, 07:42:21 pm »
Thats an informative read - thankyou.

Offline byrnetred

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Re: A Bridging Loan Too Far
« Reply #25 on: January 30, 2008, 07:46:19 pm »
grat analysis Tim, i know they arnt total accurate figures but its probably the best we can go with...

but wanted to point out, isnt the carlsberg deal up next summer(09) in reality compared to chesea spurs and united our current sponsorship is highly undervalued would we be not looking for a figure in the region of £13-15m a season against our current £6.5m?

also id be shocked if the naming rights will go for only £3m a season
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Offline Coady

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Re: A Bridging Loan Too Far
« Reply #26 on: January 30, 2008, 07:48:27 pm »
That post by Tim has made so much sense, Ive learnt more in that post then I did in the whole DIC thread which went on for 2 weeks, cheers Tim.
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Offline ttnbd

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Re: A Bridging Loan Too Far
« Reply #27 on: January 30, 2008, 07:49:48 pm »
grat analysis Tim, i know they arnt total accurate figures but its probably the best we can go with...

but wanted to point out, isnt the carlsberg deal up next summer(09) in reality compared to chesea spurs and united our current sponsorship is highly undervalued would we be not looking for a figure in the region of £13-15m a season against our current £6.5m?

also id be shocked if the naming rights will go for only £3m a season

Carlsberg deal started this summer and last 3 years so goes until end of 2009/10 season.  But would expect an improvement.  It may be something I missed out.

I went with the £3m a season Arsenal got as it's the only comparable one around really.  Again we may get more, especially for a higher capacity stadium.  Time will tell, it needs building first.
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Offline byrnetred

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Re: A Bridging Loan Too Far
« Reply #28 on: January 30, 2008, 08:10:31 pm »
Carlsberg deal started this summer and last 3 years so goes until end of 2009/10 season.  But would expect an improvement.  It may be something I missed out.

I went with the £3m a season Arsenal got as it's the only comparable one around really.  Again we may get more, especially for a higher capacity stadium.  Time will tell, it needs building first.

so it will be up the same season the new stadium is proposed to be open, if the premier league continues to progress in the asian market as rapidly as it has been over the last few years we could be in line for a really big deal, with the potential of an extra £15m in both shirt sponsorship and stadium sponsorships combined

and when the current addidas deal is up im sure we could get a bigger deal if we continue to be successful in breaking further into the asian market...

there is alot of potential in increasing turnover over the next 3 years the owners will just have to realise it by havin a successful team on the pitch for starters
« Last Edit: January 30, 2008, 08:16:06 pm by byrnetred »
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Offline ttnbd

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Re: A Bridging Loan Too Far
« Reply #29 on: January 30, 2008, 08:14:52 pm »
so it will be up the same season the new stadium is proposed to be open, if the premier league continues to progress in the asian market as rapidly as it has been over the last few years we could be in line for a really big deal, with the potential of an extra £15m in both shirt sponsorship and stadium sponsorships

and when the current addidas deal is up im sure we could get a bigger deal if we continue to be successful in breaking further into the asian market...

there is alot of potential in increasing turnover over the next 3 years the owners will just have to realise it by havin a successful team on the pitch for starters

Something like that.  I think the renewal dates are

Carlsberg summer 2010
Adidas Summer 2009 so we should see a new deal announced within 12 months.
Setanta summer 2010

With new stadium opening scheduled for summer 2011.
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Offline Lanrmort

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Re: A Bridging Loan Too Far
« Reply #30 on: January 30, 2008, 08:46:55 pm »
There should be a thread about what you really did in college..

I tell you what I did...

f*ck all!

Many thanks though, ttnbd, both for the time you took to explain everything and the clarity with which you did it.
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Offline bez

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Re: A Bridging Loan Too Far
« Reply #31 on: January 30, 2008, 09:04:00 pm »
Nice piece Tim, cheers. why aren't you at the match you lazy rat ;)  gutted i'm not

Someone make this sticky for a while just so people can read it and learn, it might just stop some of the bollocks thats being talked about on here.

People are right in saying that this money is loose change to DIC, and they are right, but the long term plan of the yanks is fair enough if it secures the long term future of the club, but it really proves the point that we eed champios league every season for the next 10 or so if the ground gets built
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Offline ttnbd

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Re: A Bridging Loan Too Far
« Reply #32 on: January 30, 2008, 09:05:53 pm »
Nice piece Tim, cheers. why aren't you at the match you lazy rat ;)  gutted i'm not


Coulda gone but auditors are in at work so loads to do.
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Offline Barney_Rubble

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Re: A Bridging Loan Too Far
« Reply #33 on: January 30, 2008, 11:35:29 pm »

The mists are clearing. Sterling effort Tim.

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Offline Robbies5th

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Re: A Bridging Loan Too Far
« Reply #34 on: January 30, 2008, 11:49:48 pm »
You are way too fucking sensible for this place!

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Re: A Bridging Loan Too Far
« Reply #35 on: January 31, 2008, 01:04:29 am »
Excellent work ttnbd.

I think what you have posted gives some insight into why the banks feel confident enough to go ahead with the loan deal.

Now if you can map out a plan for the ball to get into the back of the net..;)
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Offline TipTopKop

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Re: A Bridging Loan Too Far
« Reply #36 on: January 31, 2008, 02:35:29 am »
Someone make this sticky for a while just so people can read it and learn, it might just stop some of the bollocks thats being talked about on here.
Agreed.

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Re: A Bridging Loan Too Far
« Reply #37 on: January 31, 2008, 10:05:35 am »
It is highly commendable for anybody to take the time and trouble you clearly have taken to present such a comprehensive representation of the financial, business and legal composition of this takeover and the financial imponderables that lie ahead.

So I must first add to the warm appreciation for what you have presented. Well done TTBND.

I have but one misgiving. It is by no means intended to detract from the sterling effort you have provided us with. Yet it is, I feel, one that is both extremely pertinent and justified.

As I see it, the more detail you provide in attempting to make sense of what has taken place, the more obscured becomes the reality of the shite situation we are now facing.

Also the more opaque the screen you erect masking the reality behind which the likes of 4Pool can shelter with his relentless stance that things aren't quite as bad as most of us are making out.

For am I not right, TTBND, in stating that when you strip bare all the detail we are left with the following stark reality.

That LIVERPOOL FC is a football club which prior to this takeover was around 40 million pound in debt and charged with an annual interest on that debt [assuming 6% back then] of circa 2-3 million pounds.

Extremely manageable by any standards I am sure any Red would now say, despite the fact that these past 4/5 years the statistic was often cited by many [particularly in the media] to convey a picture of a club in finacial trouble.

Oh brother eat your heart out to be back in that kind of trouble.  ::)

Yet now, just a year on from the takeover, we are a football club which directly or indirectly owes 350 million pounds to the banks borrowed to cover the cost of that takeover and the running/financing of the club and its new stadium enabling work over the next 18 months with a an annual interest on that debt of circa 28 million pounds.

Scarcely manageable at all based on our recent financial performances even if we were to assume we could maintain current playing standards  ::) with zero net transfer costs and ensuing Champions League qualification and progression.

If I am correct in the essence of my - admittedly very simplified and unsophisticated synposis of our current situation - would you not concur [even with your very guarded business accountant's spectacles perched on the bridge of your nose] that we really are in deep shit?

Or was the title of your thread - A Bridging Loan Too Far - actually intended to convey that self-same sentiment but the chartered accountant [or whatever  :)] genes within you couldn't bring themselves to incorporate such a stark and brutal truism into what is after all an extremely professional synopsis.

If my simplistic prognosis is wrong then do please correct it. But please TTBND - keep it simple. And by that I mean Yes or No - not if this and if fuckin that.

 :)

 

Offline blurred

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Re: A Bridging Loan Too Far
« Reply #38 on: January 31, 2008, 10:29:45 am »
Finally - been waiting for you to pull your finger out and tell us what's going on, Tim. What's taken you so long? :P :D

Good stuff, cheers.

Offline Paul_McG

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Re: A Bridging Loan Too Far
« Reply #39 on: January 31, 2008, 11:31:21 am »
With the limited info thats available you have done a good job.

I gave up reading the other threads because of the"facts" which were being used, I am not naive enough to think that Hicks & Co are the perfect answer for LFC but at least this will help some people get a balanced perspective.

As you say the figures you have used are subjective and until the accounts are released/lodged in May we wont know the true picture and even then it wont be as clear as some people expect/want.

Seems the interest figures had everybody running for cover and I could never work out where those figures came from.
I have not seen the loan schedule published anywhere so presumed it was based on "best guess" figures.


My own thoughts are that the loan is indeed interest only at the moment , an initial tranche will have been drawn down to inject cash and then drawn down in stages as required.

We already know that once work starts in earnest then they will refinance this deal again to include the stadium costs, its at this stage that people will really start to panic.

Its going to be one big Mortgage payment  :o
« Last Edit: January 31, 2008, 11:38:30 am by Paul_McG »