: Fri Jul 10, 2009 8:08 am  

Tony Stark wrote:

The stadium site will be shared with a Tesco Extra (similar to the HJ), yes.

On your second point it is more likely to be to interest further backing for the club rather than funding towards the stadium as this has mostly (if not all) we are led to believe already been in place from a variety of sources for some time. The issue of tendering and contractors is still confusing for many as most assume that Langtree (the developers) would have already taken care of this.

This could be part of that financing though, especially given the economic climate.

: Fri Jul 10, 2009 8:26 am  

Tony Stark wrote: The stadium site will be shared with a Tesco Extra (similar to the HJ), yes. On your second point it is more likely to be to interest further backing for the club rather than funding towards the stadium as this has mostly (if not all) we are led to believe already been in place from a variety of sources for some time. The issue of tendering and contractors is still confusing for many as most assume that Langtree (the developers) would have already taken care of this. Nothing to be confused about. The OJEU notice, effectively the notification that the scheme is available to tender shortly is out, we have it in our office now. This is the first part of the process to get contractors to state their intention, it is ongoing as we speak: http://ted.europa.eu/Exec?DataFlow=N_on ... tatLang=EN

Tony Stark wrote: The stadium site will be shared with a Tesco Extra (similar to the HJ), yes. On your second point it is more likely to be to interest further backing for the club rather than funding towards the stadium as this has mostly (if not all) we are led to believe already been in place from a variety of sources for some time. The issue of tendering and contractors is still confusing for many as most assume that Langtree (the developers) would have already taken care of this. Nothing to be confused about. The OJEU notice, effectively the notification that the scheme is available to tender shortly is out, we have it in our office now. This is the first part of the process to get contractors to state their intention, it is ongoing as we speak: http://ted.europa.eu/Exec?DataFlow=N_on ... tatLang=EN

: Fri Jul 10, 2009 8:29 am  

getdownmonkeyman wrote: Nothing to be confused about. The OJEU notice, effectively the notification that the scheme is available to tender shortly is out, we have it in our office now. This is the first part of the process to get contractors to state their intention, it is ongoing as we speak: http://ted.europa.eu/Exec?DataFlow=N_on ... tatLang=EN Do the lot, for CASH, £20 mill

getdownmonkeyman wrote: Nothing to be confused about. The OJEU notice, effectively the notification that the scheme is available to tender shortly is out, we have it in our office now. This is the first part of the process to get contractors to state their intention, it is ongoing as we speak: http://ted.europa.eu/Exec?DataFlow=N_on ... tatLang=EN Do the lot, for CASH, £20 mill

: Fri Jul 10, 2009 8:41 am  

Adeybull wrote:

No they are not. Paul Youane above is pretty well spot on.

Debentures are loans (i.e debt) secured on the assets of the company. Usually but not always with a fixed future repayment date and an interest "coupon" (rate). There is usually a formal debenture agreement, similar to a mortgage, to cover the rights and obligations of all parties, including what happens in the event of default. Bank overdrafts and loans are secured by debenture, and larger companies issue debt instruments to the market secured by debenture. Where debentures are issued to investors directly, there is usually a trust deed and trustee appointed to look after the interests of the debenture holders. In the case of sports clubs, you tend to find that debentures may have no fixed repayment date - or its a very long way in the future - and carry no interest coupon.

Anyway, from the press report, it appears two things happened:

1. Directors' (I presume mainly McManus, but have not seen the accounts) loans of £1.35m were converted into shares.

2. A further £0.4m of new shares were issued.

Maybe I can add a bit of general background, which may expand on what the guy above said and possibly help some more? Making some assumptions - and if I had hold of the latest published accounts I could be more specific and accurate:

Item 1: NO new cash will have come into the club. What happened is that £1.35m of debt - money that the club owed creditors, in this case directors - was converted into shares. Shares are at the bottom of the pecking order when it comes to distributing the assets of the company in a winding-up. They rank behind ALL the creditors.

Where a company is technically insolvent - its liabilities exceed its assets - then it will have difficulty borrowing money or obtaining trade credit, and indeed can only continue if key creditors - usually lenders to the company - continue to support it and do not require their loans repaying. This is often the case with sport clubs which can only survive because of the generosity of a rich owner.

In such cases, the lenders - the directors - often recognise the reality of the situation, which is that they will not get their money back, and so convert the loans into shares. This paper exercise at a stroke writes off the loans, and probably eliminates the technical insolvency, and locks in the directors' money probably until the club is finally wound up. The big big losers are of course the directors, but they will in reality have already taken the hit on the loans which were never likely to be repaid.

Quite a bit more to it than that, but I've tried to simplify it.

Item 2 WILL be new money. Item 1 amounted to a financial reconstruction, and in your case I assume may have eliminated a technical insolvency (but have not seen the accounts so I am assuming). If the club WAS technically insolvent before that (or if it had only modest net assets) then the existing shares would have been pretty worthless and attracting new share investment would be very difficult. Indeed, anyone putting money in would usually require a disproportionate degree of control. But once you have written off debt and issued new shares in place of debt, then issuing further new shares becomes a more practicable option for the club - and the new investors too.

My guess is that for the club to be able to borrow money commercially for the new stadium, prospective lenders required a much stronger balance sheet and clearance of existing debt. Their loans will presumably be secured on the new stadium. Maybe your club will seek to issue debentures to supporters (i.e. get supporters to lend money to the club long-term, secured on the club assets) like many soccer clubs do. Would be a brilliant move if they did.

Sorry, that's probably all pretty boring. But to sum up from what I am guessing, most of what has been announced is probably financial engineering to strengthen what was probably a very weak balance sheet, to enable the club to obtain funding for the new stadium. The directors are recognising the realities of the situation, and the club will be much less in debt that before. Good news for you guys, and good for you that you have directors with deep pockets prepared to sink so much into the club.

If you compare, say, with a club like Bradford - no such rich owners, and what directors' loans there were were repaid in full out of the Odsal settlement cash. So, unlike you guys and most other clubs, Bulls have not been "in debt" for years - despite the nonsense to the contrary some folk spouted. But without a rich owner, they are also unlikely ever to be able to compete again with clubs like yours who have. Money is everything, and you guys are very fortunate in having a rich owner who is also a very capable businessman at the helm.

thanks for that, very informative.

[Sadfish]

: Fri Jul 10, 2009 10:02 am  

well i've got the accounts through the post this morning, but i'm sure Adeybull will give you the info.

The AGM is August the 3rd fyi

: Fri Jul 10, 2009 10:30 am  

Sadfish wrote:

well i've got the accounts through the post this morning, but i'm sure Adeybull will give you the info.

The AGM is August the 3rd fyi

Dont be a big didums.

[Sadfish]

: Fri Jul 10, 2009 10:44 am  

Don Brennan wrote:

Dont be a big didums.

hehe

[Sadfish]

: Fri Jul 10, 2009 10:52 am  

basically, and I did say this and got shot down, they are cancelling the directors loans, and taking shares.

A total of £1,360,005 in return for 90,667 new shares.

There is also a new placing of 26,000 new shares @ £15 per share. To raise an additional £390,000.

These are all subject to those os us who vote at the shareholders AGM.

Its to sort out the bridging loan we need between the stadium contruction and the sale of the land at dunriding lane.

: Fri Jul 10, 2009 11:01 am  

Sadfish wrote:

basically, and I did say this and got shot down, they are cancelling the directors loans, and taking shares.

A total of £1,360,005 in return for 90,667 new shares.

There is also a new placing of 26,000 new shares @ £15 per share. To raise an additional £390,000.

These are all subject to those os us who vote at the shareholders AGM.

Its to sort out the bridging loan we need between the stadium contruction and the sale of the land at dunriding lane.

Ah,wonder if Adeybull can tell us what it really means

[Sadfish]

: Fri Jul 10, 2009 11:01 am  

Don Brennan wrote:

Ah,wonder if Adeybull can tell us what it really means

hovers finger over ban button........