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Post by Topper Gas on Jun 24, 2019 15:20:10 GMT
yes acceptable, was typing too fast. even if they wrote off all the interest owed plus a million quid they didn't think they would get back, there would still be nothing stopping them flogging the Mem and recouping 90% of their money if they so wished
Better than them getting 100% of their money back! Suffice to say that the option of the Memorial Stadium being sold is there. Every month we wait for Plan B to materialise, that option (IMHO) becomes more likely. We'll have to wait and see what happens when the money runs out (money as in the equity in the Memorial Stadium). Should Dwane Sports start pumping their own money into the Club then - I will applaud them.Do they actually need to do that or can debts just continue increasing indefinitely until they ever call it a day? Coventry were £48m in debt at the last count with no ground as security, Charlton something ludicrous like £100m+.
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Post by Hugo the Elder on Jun 24, 2019 15:26:28 GMT
If you are devaluating an asset you own by borrowing against it then surely you are spending your own money?
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Post by Jomo on Jun 24, 2019 15:29:14 GMT
If you are devaluating an asset you own by borrowing against it then surely you are spending your own money? Surely if you borrow against an asset then you can only borrow a finite amount (i.e. up to but not over what the asset is worth?). Perhaps I'm wrong as I'm not good with this sort of thing.
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Post by peterparker on Jun 24, 2019 15:37:27 GMT
If you are devaluating an asset you own by borrowing against it then surely you are spending your own money? Surely if you borrow against an asset then you can only borrow a finite amount (i.e. up to but not over what the asset is worth?). Perhaps I'm wrong as I'm not good with this sort of thing. They aren't borowing against. Just securing the loan against it. Nothing stopping them going over and above the value of The Mem
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Post by tomylil on Jun 24, 2019 15:48:54 GMT
yes acceptable, was typing too fast. even if they wrote off all the interest owed plus a million quid they didn't think they would get back, there would still be nothing stopping them flogging the Mem and recouping 90% of their money if they so wished
Better than them getting 100% of their money back! Suffice to say that the option of the Memorial Stadium being sold is there. Every month we wait for Plan B to materialise, that option (IMHO) becomes more likely. We'll have to wait and see what happens when the money runs out (money as in the equity in the Memorial Stadium). Should Dwane Sports start pumping their own money into the Club then - I will applaud them. I think whether our ownership is truly benevolent or not, we will have to move so as to free up (hopefully) some hard cash to enable a serious land acquisition and stadium development because without putting some of our own money in, we are not exactly an attractive proposition are we. During the time we are camped elsewhere, there is the risk that the owners bog off and leave us high and dry, but I think that window would be a relatively small one. As things stand, all we have to go on are words coming from the front man of the owners, and talk is cheap. Not saying he won't pull a rabbit out the hat, but I remain to be convinced.
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Post by Jomo on Jun 24, 2019 15:52:37 GMT
Surely if you borrow against an asset then you can only borrow a finite amount (i.e. up to but not over what the asset is worth?). Perhaps I'm wrong as I'm not good with this sort of thing. They aren't borroeing against. Just securing the loan against it. Nothing stopping them going over and above the value of The Mem What does securing against actually mean? If the lender has lent £20M for arguments sake, and the loan has been secured against an asset worth half that, what does that actually mean?
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Post by Hugo the Elder on Jun 24, 2019 15:59:26 GMT
They aren't borroeing against. Just securing the loan against it. Nothing stopping them going over and above the value of The Mem What does securing against actually mean? If the lender has lent £20M for arguments sake, and the loan has been secured against an asset worth half that, what does that actually mean? The lender knows they will get half their money back??
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Post by peterparker on Jun 24, 2019 16:07:22 GMT
They aren't borroeing against. Just securing the loan against it. Nothing stopping them going over and above the value of The Mem What does securing against actually mean? If the lender has lent £20M for arguments sake, and the loan has been secured against an asset worth half that, what does that actually mean? just means essentially that if we defualted on a loan for instance, the lender could claim the asset to sell for whatever they can recoup
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Post by Jomo on Jun 24, 2019 16:12:17 GMT
What does securing against actually mean? If the lender has lent £20M for arguments sake, and the loan has been secured against an asset worth half that, what does that actually mean? The lender knows they will get half their money back?? Indeed but I don't see how that's really any different from "borrowing against" the asset? Edit: I also don't see why a lender would ever lend to an entity that didn't own enough valubable assets that could be sold to recoup the amount owed. In this instance why would a bank continue to lend to football clubs when there's no chance they can ever call it in and get it all back? What am I missing?
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Post by peterparker on Jun 24, 2019 16:27:54 GMT
The lender knows they will get half their money back?? Indeed but I don't see how that's really any different from "borrowing against" the asset? Edit: I also don't see why a lender would ever lend to an entity that didn't own enough valubable assets that could be sold to recoup the amount owed. In this instance why would a bank continue to lend to football clubs when there's no chance they can ever call it in and get it all back? What am I missing? we are into the fine detail in the 'differences'. Not being a banker or anything I can't say this as gospel, but it is more to do with risk and fair value of said asset
A bank would likely only let you borrow x% of the value of the asset. Somebody else may risk a greater amount of their capital and secure it against the asset
we are not borrowing from a bank against our asset, we are borrowing from our owners secured against our asset, if that makes sense
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Post by burnthewitch on Jun 24, 2019 16:34:20 GMT
If you are devaluating an asset you own by borrowing against it then surely you are spending your own money? But you're only spending your money when the amount of borrowing exceeds the value of the asset you have the charge on. As we only have accounts that cover 2017-2018 accounts, we can only guess how close we are to that figure. I'm no accountant. I bow to the superior knowledge and intellect of swissgas, Holmes etc.
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Post by burnthewitch on Jun 24, 2019 16:39:56 GMT
Indeed but I don't see how that's really any different from "borrowing against" the asset? Edit: I also don't see why a lender would ever lend to an entity that didn't own enough valubable assets that could be sold to recoup the amount owed. In this instance why would a bank continue to lend to football clubs when there's no chance they can ever call it in and get it all back? What am I missing? we are into the fine detail in the 'differences'. Not being a banker or anything I can't say this as gospel, but it is more to do with risk and fair value of said asset
A bank would likely only let you borrow x% of the value of the asset. Somebody else may risk a greater amount of their capital and secure it against the asset
we are not borrowing from a bank against our asset, we are borrowing from our owners secured against our asset, if that makes sense Exactly! (Although it's not "our" asset any more. It is Dwane Sports). And as it is nothing to do with a bank - Dwane Sports are borrowing (upto) 100% of that value. Risk free capital. With a 6% return. As bankers - they're still popping the champagne corks. They bought BRFC for £8mil (ish) when the asset value was nearer £18mil. I simply must pop out and get another bottle of bubbly in.
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Post by Jomo on Jun 24, 2019 16:51:48 GMT
Indeed but I don't see how that's really any different from "borrowing against" the asset? Edit: I also don't see why a lender would ever lend to an entity that didn't own enough valubable assets that could be sold to recoup the amount owed. In this instance why would a bank continue to lend to football clubs when there's no chance they can ever call it in and get it all back? What am I missing? we are into the fine detail in the 'differences'. Not being a banker or anything I can't say this as gospel, but it is more to do with risk and fair value of said asset
A bank would likely only let you borrow x% of the value of the asset. Somebody else may risk a greater amount of their capital and secure it against the asset
we are not borrowing from a bank against our asset, we are borrowing from our owners secured against our asset, if that makes sense
So in that case does that mean that DS have taken a charge out against the Mem, which is an asset owned by BRFC? And if that's so, then BRFC could lose their home to DS at any time DS decide to call in the debt? Otherwise if DS own the Mem as part of the club already, isn't that robbing Peter to pay Paul?
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Post by Topper Gas on Jun 24, 2019 17:28:17 GMT
we are into the fine detail in the 'differences'. Not being a banker or anything I can't say this as gospel, but it is more to do with risk and fair value of said asset
A bank would likely only let you borrow x% of the value of the asset. Somebody else may risk a greater amount of their capital and secure it against the asset
we are not borrowing from a bank against our asset, we are borrowing from our owners secured against our asset, if that makes sense
So in that case does that mean that DS have taken a charge out against the Mem, which is an asset owned by BRFC? And if that's so, then BRFC could lose their home to DS at any time DS decide to call in the debt? Otherwise if DS own the Mem as part of the club already, isn't that robbing Peter to pay Paul? Another advantage of putting a charge on a property is that it stops anybody else getting in before DS and getting their own charge on the property, they really are just following normal banking rules, it could be where ever the money is coming from have insisted it's protected by a charge. I guess the looming issue is that will anybody lend us effectively unsecured money if the loan ever exceeds the equity in the Mem. Whilst there's concerns about DS evicting us and selling the land for property development I wonder just how easy it would be to get BCC to grant pp for the Mem if they hadn't already found a new home for the club? I can't recall many league club being made homeless in recent times after their own ground was sold for development.
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Post by Jomo on Jun 24, 2019 17:46:14 GMT
So in that case does that mean that DS have taken a charge out against the Mem, which is an asset owned by BRFC? And if that's so, then BRFC could lose their home to DS at any time DS decide to call in the debt? Otherwise if DS own the Mem as part of the club already, isn't that robbing Peter to pay Paul? Another advantage of putting a charge on a property is that it stops anybody else getting in before DS and getting their own charge on the property, they really are just following normal banking rules, it could be where ever the money is coming from have insisted it's protected by a charge. I guess the looming issue is that will anybody lend us effectively unsecured money if the loan ever exceeds the equity in the Mem. Whilst there's concerns about DS evicting us and selling the land for property development I wonder just how easy it would be to get BCC to grant pp for the Mem if they hadn't already found a new home for the club? I can't recall many league club being made homeless in recent times after their own ground was sold for development. I was not debating the merits of taking out a charge, but asking for clarification on the situation as it stands. Your point about the looming question of whether anyone would lend us unsecured money again I don't understand. Say if we were planning to imminently start building work on a proposed £40M stadium, either it would be funded by the ALQ'S with some help from sale of the asset (I.e. the Mem) or we'd have to be loaned money from various lenders/investment stakeholders. If the latter then we'd have the same issue of needing to borrow more than our assets were worth anyway? Although perhaps then the debt would be secured against the future value of the new stadium?
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Post by Hugo the Elder on Jun 24, 2019 19:38:32 GMT
we are into the fine detail in the 'differences'. Not being a banker or anything I can't say this as gospel, but it is more to do with risk and fair value of said asset
A bank would likely only let you borrow x% of the value of the asset. Somebody else may risk a greater amount of their capital and secure it against the asset
we are not borrowing from a bank against our asset, we are borrowing from our owners secured against our asset, if that makes sense
So in that case does that mean that DS have taken a charge out against the Mem, which is an asset owned by BRFC? And if that's so, then BRFC could lose their home to DS at any time DS decide to call in the debt? Otherwise if DS own the Mem as part of the club already, isn't that robbing Peter to pay Paul? Don't DS own the Mem? I think that's the issue?? I'm not sure the club owns anything now.
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Post by Hugo the Elder on Jun 24, 2019 19:40:26 GMT
If you are devaluating an asset you own by borrowing against it then surely you are spending your own money? But you're only spending your money when the amount of borrowing exceeds the value of the asset you have the charge on. As we only have accounts that cover 2017-2018 accounts, we can only guess how close we are to that figure. I'm no accountant. I bow to the superior knowledge and intellect of swissgas, Holmes etc. Yeah, I don't know either. It was more of a question than a statement of fact or a way of argument. I genuinely don't understand it if I'm honest. Every time I think I do, something else gets brought up and I realize I don't.
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Post by Jomo on Jun 24, 2019 20:08:31 GMT
But you're only spending your money when the amount of borrowing exceeds the value of the asset you have the charge on. As we only have accounts that cover 2017-2018 accounts, we can only guess how close we are to that figure. I'm no accountant. I bow to the superior knowledge and intellect of swissgas, Holmes etc. Yeah, I don't know either. It was more of a question than a statement of fact or a way of argument. I genuinely don't understand it if I'm honest. Every time I think I do, something else gets brought up and I realize I don't. I'm glad I'm not the only one!
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Post by knowall on Jun 24, 2019 20:16:55 GMT
Indeed but I don't see how that's really any different from "borrowing against" the asset? Edit: I also don't see why a lender would ever lend to an entity that didn't own enough valubable assets that could be sold to recoup the amount owed. In this instance why would a bank continue to lend to football clubs when there's no chance they can ever call it in and get it all back? What am I missing? we are into the fine detail in the 'differences'. Not being a banker or anything I can't say this as gospel, but it is more to do with risk and fair value of said asset
A bank would likely only let you borrow x% of the value of the asset. Somebody else may risk a greater amount of their capital and secure it against the asset
we are not borrowing from a bank against our asset, we are borrowing from our owners secured against our asset
for as long as they are prepared or able to do so.
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Post by Topper Gas on Jun 24, 2019 20:31:40 GMT
So in that case does that mean that DS have taken a charge out against the Mem, which is an asset owned by BRFC? And if that's so, then BRFC could lose their home to DS at any time DS decide to call in the debt? Otherwise if DS own the Mem as part of the club already, isn't that robbing Peter to pay Paul? Don't DS own the Mem? I think that's the issue?? I'm not sure the club owns anything now. Pretty sure the club, BRFC1883, own the Mem, the club is then 92% owned by the DS/ALQ's & 8% by the SC. With DS/the ALQ's owning 100% of The Colony land.
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