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Post by swissgas on Mar 4, 2015 18:36:59 GMT
In their heads I'm sure 99% of Rovers fans with business experience would agree with you Bamber. But all of our hearts are with Rovers so some still desperately try to justify the actions of the board and want to believe in the mythical plans B, C and D. 100% with banking experience would disagree though. CGH is right on this one. The club may have got a continuation of the loan at the same level of borrowing but there's no way Barclays would lend more or agree to share their security with another lender. Bamber was asking why the club rushed out to a sub-prime lender ? Your answer is ignoring that question and suggesting that if Barclays decided the Rovers business was not for them and called in the loan then the correct course of action was to rush out to a sub-prime lender and pay 14% interest. Nick Higgs was asked in the report just posted by Peter Parker "why the directors had opted to refinance at such a high rate of interest instead of loaning the money themselves at lower rates of interest" and the reply from Nick Higgs was “The refinancing was done for a very specific reason". The board seem to think that by ignoring difficult questions the problems will go away and a lot of fans seem to agree with them.
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Post by stig-of-the-gas on Mar 4, 2015 19:16:39 GMT
We should start a poll. Which is best, rumours or conjecture? I vote for complete guesswork slanted to support an agenda. That seems to be most common around here.
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Deleted
Joined: January 1970
Posts: 0
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Post by Deleted on Mar 4, 2015 19:48:24 GMT
We should start a poll. Which is best, rumours or conjecture? I vote for complete guesswork slanted to support an agenda. That seems to be most common around here. Who is guessing? Please confirm
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Post by a more piratey game on Mar 4, 2015 20:03:30 GMT
Rovers took out a short-term loan, believed to be in the region of £2 million with a company called MSP Capital in December, when it was clear their dispute with Sainsbury’s over sale of the Memorial Stadium site was going to end up in the High Court. The club investigated issues of refinancing with existing partner Barclays to continue funding the legal challenge, which has so far cost the club in excess of £1 million, but were declined. Instead, Rovers opted to take the loan from MSP Capital at a rate of 1.2 per cent interest per month and will have to repay the full amount and accrued interest by the end of the year When asked why the directors had opted to refinance at such a high rate of interest instead of loaning the money themselves at lower rates of interest, Higgs said: “The refinancing was done for a very specific reason. “We knew the case was likely to end up in the High Court and we wanted to make sure we were not starved into submission before it got there. The directors are already funding the football club and we continue to do so. If you look at the losses over a number of years, they have all been covered by directors and they have still contributed to the current year in terms of trading losses. “We had gone to our bank (Barclays), who hold the mortgage on the site, to help us with restructuring in light of the increasing costs and legal fees associated with the stadium project and we couldn’t make any headway. “We ended up bringing in alternative methods of funding that enables us to fight the court case coming up in May. We are classing these costs associated with the upcoming court case as an extraordinary thing and a separate entity. We want to make sure we have the funds available to fight this case, while still trading normally within the football club.” A High Court trial date has been set for May 14 after Rovers made a plea to have the situation expedited as a result of their uncertain financial position and the willingness of other partners to remain on board with the project beyond the summer. I think that's a pretty fair answer to the question. My guess, and its a bit of a shot in the dark, is that it might have something to do with either the ring-fencing of stadium money (though I've not idea how it is ring-fenced, and an additional guess would be that this sort of packaging might be taken into account in any compensation settlement - its an identifiable additional cost to Rovers) or else repayment of existing loans to director(s)
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Post by One F in Dunford on Mar 4, 2015 20:23:55 GMT
We should start a poll. Which is best, rumours or conjecture? I vote for complete guesswork slanted to support an agenda. That seems to be most common around here. The Gas apologised, move on.
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Post by Topper Gas on Mar 4, 2015 20:24:50 GMT
I'm not sure what the issue is, the BoD had to find money from somewhere to pay off GD, repay the Barclays loan if they didn't want to continue/lend the club even more, plus fund the legal costs for the Sainsbury's case, a Wonga type loan was probably all they could get as they are prepared to take the risk hence the high interest being charged.
What is there not to understand? We all know the club will be in dire shape if Sainsbury's get off scott free but keeping on demanding answers on a forum isn't going to change things.
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Post by swissgas on Mar 4, 2015 20:59:35 GMT
I'm not sure what the issue is, the BoD had to find money from somewhere to pay off GD, repay the Barclays loan if they didn't want to continue/lend the club even more, plus fund the legal costs for the Sainsbury's case, a Wonga type loan was probably all they could get as they are prepared to take the risk hence the high interest being charged. What is there not to understand? We all know the club will be in dire shape if Sainsbury's get off scott free but keeping on demanding answers on a forum isn't going to change things. But what it may do is open some supporters eyes to the possibility that the board may not be being completely straight with them. They tell us they are confident of success but going to a sub - prime lender shows they are not confident enough to loan the money themselves or guarantee loans made by a mainstream lender at reasonable interest rates. They tell us the UWE Stadium will be a commercial success and generate substantial revenue streams and they are confident investors will come in to plug the shortfall once the Sainsburys money is secure but where are those investors now ? Venture Capitalists would examine the UWE plans and projections in detail, value the Mem as a development site, assess the likely outcome of the Sainsburys case and, if it all stacked up, would have no difficulty in funding a short term requirement of 2.7 million. The fact that the board were not able to source funding at reasonable rates indicates, IMO, that they either have not been in serious discussions with Venture Capitalists or they have and the project doesn't stack up.
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Post by a more piratey game on Mar 4, 2015 21:10:09 GMT
I'm not sure what the issue is, the BoD had to find money from somewhere to pay off GD, repay the Barclays loan if they didn't want to continue/lend the club even more, plus fund the legal costs for the Sainsbury's case, a Wonga type loan was probably all they could get as they are prepared to take the risk hence the high interest being charged. What is there not to understand? We all know the club will be in dire shape if Sainsbury's get off scott free but keeping on demanding answers on a forum isn't going to change things. But what it may do is open some supporters eyes to the possibility that the board may not be being completely straight with them. They tell us they are confident of success but going to a sub - prime lender shows they are not confident enough to loan the money themselves or guarantee loans made by a mainstream lender at reasonable interest rates. They tell us the UWE Stadium will be a commercial success and generate substantial revenue streams and they are confident investors will come in to plug the shortfall once the Sainsburys money is secure but where are those investors now ? Venture Capitalists would examine the UWE plans and projections in detail, value the Mem as a development site, assess the likely outcome of the Sainsburys case and, if it all stacked up, would have no difficulty in funding a short term requirement of 2.7 million. The fact that the board were not able to source funding at reasonable rates indicates, IMO, that they either have not been in serious discussions with Venture Capitalists or they have and the project doesn't stack up. I don't have much experience of private equity, but I suspect that the outcome of a court case is not something they'd be prepared to bet on - its not what they do. They also don't do football as far as I'm aware, at least not below the biggest ticket clubs, as its to some extent 'not a proper business'
I think that they might back the UWE business plan though, excluding football, but not until the court case outcome (which is critical) is determined, as might more conventional funders. It looks like very small beer for VC though, and I'm not sure how attractive the potential returns would be (eg there is no obvious 'exit route', the cashflows are large enough to be materially re-engineered)
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dagnogo
Joined: June 2014
Posts: 872
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Post by dagnogo on Mar 4, 2015 21:12:27 GMT
I'm not sure what the issue is, the BoD had to find money from somewhere to pay off GD, repay the Barclays loan if they didn't want to continue/lend the club even more, plus fund the legal costs for the Sainsbury's case, a Wonga type loan was probably all they could get as they are prepared to take the risk hence the high interest being charged. What is there not to understand? We all know the club will be in dire shape if Sainsbury's get off scott free but keeping on demanding answers on a forum isn't going to change things. You're right. They'll do what they want and protect themselves over everything else and nothing will change that.
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Alveston Gas
Brucie Bannister
Once a Gashead always a Gashead
Joined: June 2014
Posts: 746
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Post by Alveston Gas on Mar 4, 2015 21:15:50 GMT
I'm not sure what the issue is, the BoD had to find money from somewhere to pay off GD, repay the Barclays loan if they didn't want to continue/lend the club even more, plus fund the legal costs for the Sainsbury's case, a Wonga type loan was probably all they could get as they are prepared to take the risk hence the high interest being charged. What is there not to understand? We all know the club will be in dire shape if Sainsbury's get off scott free but keeping on demanding answers on a forum isn't going to change things. Well said. Everyone is guessing! There is no way Barclays would lend any more based on our P&L and Balance Sheet deficit! Affordability, that thing you have to prove these days to get a Mortgage - is a non starter. No lender would take on a £2m debt just secured by one mans Personal Guarantee. What if he goes Bankrupt tomorrow? Guarantee worthless. I am not condoning this new borrowing - just putting some if the facts in place having worked for Barclays in a Corporate Lending role since 1974. Again, too many guessers.
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womble
Arthur Cartlidge
Joined: May 2014
Posts: 300
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Post by womble on Mar 4, 2015 21:23:44 GMT
In reply to something you asked on the other forum, you mentioned not being able to use the Sainsbury's money to pay off MSP, that got me wondering if they are so confident in their position that Rovers' directors are going to try to demonstrate that having to take the MSP loan is consequential to Sainsbury's not completing the countract? That was another question which no one attempted to answer. The nodding heads were delighted when Nick boasted about how " that money is ring fenced in the contract and can only be used for building the UWE Stadium" but the very same people are now saying if we haven't got enough for the UWE Stadium then anything we get from Sainsburys can be used to renovate the Mem, pay off the debts and set us up for the future. It's as if they are conditioned to erase from their memory the previously entered doctrine and automatically over write it with the new doctrine. Those views are not necessarily contradictory. If the contract is enforced then the money could well be ring fenced for the stadium, and the MSP loan repaid with money claimed as damages. If the contract is not wholly enforceable and Sainsbury's are allowed to walk away, but have to pay some level of compensation, then surely in the absence of completion of the original contract, there is nothing to prevent it being use to pay off loans, do up the Mem etc.?
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Deleted
Joined: January 1970
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Post by Deleted on Mar 4, 2015 21:25:41 GMT
I read it as:
'We've chosen to go sh1t or bust on the Sainsbury's thing, to the High Court if necessary. We've borrowed money from MSP, because Barclays aren't prepared to fund / risk it. Neither are the Directors, to the extent that they insist that the money they pump in to fund the ordinary losses can't be spent on this venture. The same applies to everyone else with less than 95% of the DNA of a loan shark.
'The High Court has fast tracked it because it recognises we've put ourselves on a financial time bomb, and anyway the project won't survive the summer without progress.
Aren't Darrell and the boys doing well?'
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Post by PessimistGas on Mar 4, 2015 21:49:34 GMT
100% with banking experience would disagree though. CGH is right on this one. The club may have got a continuation of the loan at the same level of borrowing but there's no way Barclays would lend more or agree to share their security with another lender. Bamber was asking why the club rushed out to a sub-prime lender ? Your answer is ignoring that question and suggesting that if Barclays decided the Rovers business was not for them and called in the loan then the correct course of action was to rush out to a sub-prime lender and pay 14% interest. Nick Higgs was asked in the report just posted by Peter Parker "why the directors had opted to refinance at such a high rate of interest instead of loaning the money themselves at lower rates of interest" and the reply from Nick Higgs was “The refinancing was done for a very specific reason". The board seem to think that by ignoring difficult questions the problems will go away and a lot of fans seem to agree with them. Can't work this one out, loan and interest has to be paid back by end of year, win or lose, so why wouldn't the board put up the money at a fraction of the interest even if they arent confident? Am I missing something? Taking out a loan to pay lawyers is very worrying. Taking out a Wonga syle loan to pay lawyers is very worrying. The fact no no win no fee would touch this with a barge pole is distressing. I don't think they are being straight with us, but then what's new? This isn't going to end well.
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Post by Curly Wurly on Mar 4, 2015 21:51:32 GMT
'We've chosen to go sh1t or bust on the Sainsbury's thing.... And that is the worrying thing. This is a very high risk strategy, with polarised outcomes and little middle ground. I'm afraid Plan E is FC Rovers of Bristol - I'm gonna start talking to my Wimbledon mates just in case.
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Post by swissgas on Mar 4, 2015 22:00:44 GMT
I'm not sure what the issue is, the BoD had to find money from somewhere to pay off GD, repay the Barclays loan if they didn't want to continue/lend the club even more, plus fund the legal costs for the Sainsbury's case, a Wonga type loan was probably all they could get as they are prepared to take the risk hence the high interest being charged. What is there not to understand? We all know the club will be in dire shape if Sainsbury's get off scott free but keeping on demanding answers on a forum isn't going to change things. Well said. Everyone is guessing! There is no way Barclays would lend any more based on our P&L and Balance Sheet deficit! Affordability, that thing you have to prove these days to get a Mortgage - is a non starter. No lender would take on a £2m debt just secured by one mans Personal Guarantee. What if he goes Bankrupt tomorrow? Guarantee worthless. I am not condoning this new borrowing - just putting some if the facts in place having worked for Barclays in a Corporate Lending role since 1974. Again, too many guessers. I appreciate your experience Alveston but surely Barclays or any other bank would take a personal guarantee backed by a charge over secure investments or real estate ? We are talking about paying 390 000 pa interest instead of 190 000 pa Couldn't the board have come up with a better explanation than "we had no other option" when it's as clear as night and day they did have other options.
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Post by swissgas on Mar 4, 2015 22:08:17 GMT
That was another question which no one attempted to answer. The nodding heads were delighted when Nick boasted about how " that money is ring fenced in the contract and can only be used for building the UWE Stadium" but the very same people are now saying if we haven't got enough for the UWE Stadium then anything we get from Sainsburys can be used to renovate the Mem, pay off the debts and set us up for the future. It's as if they are conditioned to erase from their memory the previously entered doctrine and automatically over write it with the new doctrine. Those views are not necessarily contradictory. If the contract is enforced then the money could well be ring fenced for the stadium, and the MSP loan repaid with money claimed as damages. If the contract is not wholly enforceable and Sainsbury's are allowed to walk away, but have to pay some level of compensation, then surely in the absence of completion of the original contract, there is nothing to prevent it being use to pay off loans, do up the Mem etc.? I'm not sure whether the contract can be partially enforced because as far as I am aware it's either enforceable or it's not. But if it was enforceable, and damages were awarded, they would not include the capital portion of the MSP loan other than that part used for legal costs. Perhaps an out of course compromise would provide money to pay off borrowings and rejuvenate the club and perhaps that is what the directors are hoping for.
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Post by Topper Gas on Mar 4, 2015 22:12:48 GMT
NH is already up to his neck with millions of his own money at stake, GD's jumped ship, why should NH risk more of his own money by giving personal guarantees he's hardly Pantsdown wealth wise. After all nobody, even those with the best of cases, can be confident they'll beat a company the size of Sainsbury's in a court room. Unless you've had your head buried in the sand we all know May's court is sh1t or bust, but it's hardly NH fault Sainsbury's are trying to walk away.
Perhaps with hindsight he shouldn't have never, rgot involved with Sainsbury's but would any of us turned down the chance of swapping the Mem for the UWE?
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Deleted
Joined: January 1970
Posts: 0
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Post by Deleted on Mar 4, 2015 22:57:46 GMT
I wonder how great and what the Plan B, Cs and Ds are? I mean if we lost the court case and get nothing and have a massive loan and costs to repay how viable are B, C and D and if they are that good.... I'm banking on Plan B being a goody, because I think it's: Plan C: D'you think Noel Emomds might be a soft touch? Plan D: Fly to Paraguay* * I've been to Paraguay (clang), so no offence. It's cute in a way, but still with a touch of the Graham Greene vibe, so I imagine you could get your head down there if you play by the rules and don't depend on the postal service.
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Post by banjoflyer on Mar 5, 2015 0:11:23 GMT
For all those who ask '"why didn't the directors lend the money themselves at lower rates" refer to the threads criticising GD having his loans repaid and generally consider how theywould have reacted had a Director loaned 2.7m at an interest rate of (say) 8% or more. You do wonder sometimes how the BOD can win over the many doubters?
Having said that, at 14% that loan does appear excessive. Secured on the mem! Seems to me that some money had to be found, to prove to Sainsbury's (the true last villains in this after TRASH, Carstairs, et al) that we had both the appetite and money for the fight to the High Court - and FAST!
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Post by a more piratey game on Mar 5, 2015 0:14:44 GMT
For all those who ask '"why didn't the directors lend the money themselves at lower rates" refer to the threads criticising GD having his loans repaid and generally consider how theywould have reacted had a Director loaned 2.7m at an interest rate of (say) 8% or more. You do wonder sometimes how the BOD can win over the many doubters? Having said that, at 14% that loan does appear excessive. Secured on the mem! Seems to me that some money had to be found, to prove to Sainsbury's (the true last villains in this after TRASH, Carstairs, et al) that we had both the appetite and money for the fight to the High Court - and FAST! That sounds about right to me banjo
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