quayside Posted August 24, 2011 Share Posted August 24, 2011 Bear in mind that £100 million of what he is owed is what he missed when he took over the club and didn't do his homework properly. A mistake of his own making and yet the club will have to pay for it. He knew most of it was there, he didn't know he would have to pay it off within two months. I still can't believe that Ashley didn't ask to see the terms of the various loans we had. It would have taken about 2 mins to check whether there was a change of control clause - which there would normally be anyway. Maybe he knew the clause was likely to be there, but he didn't think the bank would activate it. He may have thought the bank would regard the club as being in the hands of an owner with deep pockets and would be happy to continue the credit line. There is also the fact that the club was in the process of making a loss of £30 million for the year. Ashley would not have known that but the bank would have had an inkling, assuming there wasn't some seriously creative accounting info being fed to them. Link to post Share on other sites More sharing options...
BottledDog Posted August 24, 2011 Share Posted August 24, 2011 Bear in mind that £100 million of what he is owed is what he missed when he took over the club and didn't do his homework properly. A mistake of his own making and yet the club will have to pay for it. He knew most of it was there, he didn't know he would have to pay it off within two months. I still can't believe that Ashley didn't ask to see the terms of the various loans we had. It would have taken about 2 mins to check whether there was a change of control clause - which there would normally be anyway. Maybe he knew the clause was likely to be there, but he didn't think the bank would activate it. He may have thought the bank would regard the club as being in the hands of an owner with deep pockets and would be happy to continue the credit line. There is also the fact that the club was in the process of making a loss of £30 million for the year. Ashley would not have known that but the bank would have had an inkling, assuming there wasn't some seriously creative accounting info being fed to them. Just to add to that, in the recent Sir John Hall interview, he stated that one of the reasons they went with Ashley was that the Malaysians requested a considerable time to look over the books, while Ashley offered to forego quite such an in depth check to secure the agreement. Link to post Share on other sites More sharing options...
Stu Posted August 24, 2011 Share Posted August 24, 2011 Bear in mind that £100 million of what he is owed is what he missed when he took over the club and didn't do his homework properly. A mistake of his own making and yet the club will have to pay for it. You what? The club? How on earth do you work that out. He will want that back at some point. The question is how and when. I think we are seeing that answer being played out before our eyes. Could "Some of the 111 M has been paid off" be construed as "all of the money will be staying within the club"? I guess at some point the money had to be re-paid. I just hope we don't end up in a bigger crisis, by losing more than we save. After all, that is what relegation did for us, he lost way more than he saved implementing the gamble. As above: what about the gamble last season? Link to post Share on other sites More sharing options...
oldtype Posted August 24, 2011 Share Posted August 24, 2011 Bear in mind that £100 million of what he is owed is what he missed when he took over the club and didn't do his homework properly. A mistake of his own making and yet the club will have to pay for it. He knew most of it was there, he didn't know he would have to pay it off within two months. I still can't believe that Ashley didn't ask to see the terms of the various loans we had. It would have taken about 2 mins to check whether there was a change of control clause - which there would normally be anyway. Maybe he knew the clause was likely to be there, but he didn't think the bank would activate it. He may have thought the bank would regard the club as being in the hands of an owner with deep pockets and would be happy to continue the credit line. There is also the fact that the club was in the process of making a loss of £30 million for the year. Ashley would not have known that but the bank would have had an inkling, assuming there wasn't some seriously creative accounting info being fed to them. Just to add to that, in the recent Sir John Hall interview, he stated that one of the reasons they went with Ashley was that the Malaysians requested a considerable time to look over the books, while Ashley offered to forego quite such an in depth check to secure the agreement. Would have been pointless anyway. If the Malaysians got a chance to examine the books, they would've been on the first plane back to Kuala Lumpur. Link to post Share on other sites More sharing options...
Guest michaelfoster Posted August 24, 2011 Share Posted August 24, 2011 and we would of been further in debt with Fat Freddy, possibly going the way of Leeds Link to post Share on other sites More sharing options...
ToonTastic Posted August 24, 2011 Share Posted August 24, 2011 Has anyone got details of when the original loan deal FS organised for the stadium expansion would have ended just I have in my head 2014 which suggests this whole Ashley holding the loan has been a told waste of time and money Link to post Share on other sites More sharing options...
Stu Posted August 24, 2011 Share Posted August 24, 2011 Has anyone got details of when the original loan deal FS organised for the stadium expansion would have ended just I have in my head 2014 which suggests this whole Ashley holding the loan has been a told waste of time and money Struggling to envisage a reality where NUFC would have been a position (under Shepherd) to pay back £55m stadium redevelopment loan by 2014. Link to post Share on other sites More sharing options...
ToonTastic Posted August 24, 2011 Share Posted August 24, 2011 Has anyone got details of when the original loan deal FS organised for the stadium expansion would have ended just I have in my head 2014 which suggests this whole Ashley holding the loan has been a told waste of time and money If that was the payments being made I don't see the problem? Struggling to envisage a reality where NUFC would have been a position (under Shepherd) to pay back £55m stadium redevelopment loan by 2014. Link to post Share on other sites More sharing options...
quayside Posted August 24, 2011 Share Posted August 24, 2011 Has anyone got details of when the original loan deal FS organised for the stadium expansion would have ended just I have in my head 2014 which suggests this whole Ashley holding the loan has been a told waste of time and money The £43 million that was secured on ticket sales and hospitality receipts, was due to be repaid by 2016. There were also several other loans totalling £23 million that were repayable at various times up to 2010. Link to post Share on other sites More sharing options...
ToonTastic Posted August 24, 2011 Share Posted August 24, 2011 Has anyone got details of when the original loan deal FS organised for the stadium expansion would have ended just I have in my head 2014 which suggests this whole Ashley holding the loan has been a told waste of time and money Thought I wouldn't be far off with 2014 so if in 5 years all debts aren't paid off then Ashley has proved himself to be worse than shepherd financially, that's amusing The £43 million that was secured on ticket sales and hospitality receipts, was due to be repaid by 2016. There were also several other loans totalling £23 million that were repayable at various times up to 2010. Link to post Share on other sites More sharing options...
ToonTastic Posted August 24, 2011 Share Posted August 24, 2011 Apologies for my quoting my phone appears to have forgotten how Link to post Share on other sites More sharing options...
quayside Posted August 24, 2011 Share Posted August 24, 2011 Has anyone got details of when the original loan deal FS organised for the stadium expansion would have ended just I have in my head 2014 which suggests this whole Ashley holding the loan has been a told waste of time and money Struggling to envisage a reality where NUFC would have been a position (under Shepherd) to pay back £55m stadium redevelopment loan by 2014. Looking at those sick 2007 accounts I can only agree with that. I've put the actual balances due on the loans as at 30/06/07 in my post above. We also now know there was a fairly grotesque recession just around the corner, just how that would have affected Barclays' thinking is anybody's guess. Mind you I don't think that the bank would have done anything drastic simply because it would have been piss poor publicity for the bank that sponsors the Premiership to pull the plug on one of the teams that play in it.....I think Everton's debt is with Barclays as well. Link to post Share on other sites More sharing options...
quayside Posted August 24, 2011 Share Posted August 24, 2011 Has anyone got details of when the original loan deal FS organised for the stadium expansion would have ended just I have in my head 2014 which suggests this whole Ashley holding the loan has been a told waste of time and money Thought I wouldn't be far off with 2014 so if in 5 years all debts aren't paid off then Ashley has proved himself to be worse than shepherd financially, that's amusing Because under Shepherd we were definitely going to be able to pay off the debt as it fell due.........? Link to post Share on other sites More sharing options...
Matt Posted August 24, 2011 Share Posted August 24, 2011 Has anyone got details of when the original loan deal FS organised for the stadium expansion would have ended just I have in my head 2014 which suggests this whole Ashley holding the loan has been a told waste of time and money Thought I wouldn't be far off with 2014 so if in 5 years all debts aren't paid off then Ashley has proved himself to be worse than shepherd financially, that's amusing Because under Shepherd we were definitely going to be able to pay off the debt as it fell due.........? I think it was either 2016 or 2017 and IIRC the loan was amortising using a 'locked-box' approach from ST revenues. The pressure would have been more on cashflow in the intervening period. Our problem at the point we were sold was not the debt- it was well-structured and affordable- it was the size of the wage bill and the impact it had on the cashflow. It was leaking cash at an alarming rate. You don't need due diligence to realise that- we knew as much from the plc accounts! Link to post Share on other sites More sharing options...
quayside Posted August 24, 2011 Share Posted August 24, 2011 Has anyone got details of when the original loan deal FS organised for the stadium expansion would have ended just I have in my head 2014 which suggests this whole Ashley holding the loan has been a told waste of time and money Thought I wouldn't be far off with 2014 so if in 5 years all debts aren't paid off then Ashley has proved himself to be worse than shepherd financially, that's amusing Because under Shepherd we were definitely going to be able to pay off the debt as it fell due.........? I think it was either 2016 or 2017 and IIRC the loan was amortising using a 'locked-box' approach from ST revenues. The pressure would have been more on cashflow in the intervening period. Our problem at the point we were sold was not the debt- it was well-structured and affordable- it was the size of the wage bill and the impact it had on the cashflow. It was leaking cash at an alarming rate. You don't need due diligence to realise that- we knew as much from the plc accounts! As I said above it was 2016. How could the debt be affordable if the club was leaking cash at an alarming rate? Affordable means sustainable out of the clubs existing and future cash flows. Up until that point the club had simply plugged cash flow leaks with more loans at ever increasing interest rates. Link to post Share on other sites More sharing options...
UV Posted August 24, 2011 Share Posted August 24, 2011 The idea that the whole debt would have had to be paid off paid by 2016 or else.... LEEDS & PORTSMOUTH!!!!!! Accountants sans agenda should be a bit more objective IMO. Matt has it about right. The debt was not a major problem and the wages were too high for the squad we had, however they were not too far in excess of what we could afford, so I'd argue with the "leaking cash at an alarming rate" comment. In spite of the oft repeated "loss of £30 million for the year" the cash flow loss (the important number) was actually less than £10m, and that was with a net transfer spend of over £10m (shockingly extravagant I know!!!) and paying interest fees. In these more enlightened times this might be seen as madness, however back then when our main striker got injured for the season before it began the owners took the decision to try and replace him! This inevitably increased the wage bill to a level which was more than desirable, however it wasn't done completely recklessly as it was done in the knowledge that Premiership TV revenues would be increasing the following year by £18m and would be affordable in the future. Simply put, if the club had been run in the same way it was in 2008 as it was in 2007, with a similar net transfer spend of around £10m, but with no increase or only a small increase in the wage bill, then the debt would not have increased, and in fact could easily have been reduced. Instead Ashley decided that all transfer fees would be paid up front when buying (but not when selling) and allowed the wage bill to go up by £10m. This, and the revenue falls of following years is what has caused the debt to sky rocket, not the policies of the previous owners. The owed transfer fees for the likes of Milner, N'Zogbia, Given, Bassong & Martins only served to stop the debt increasing in our year in the Championship, and the money from Carroll will have paid off some of the extra debt, but there will still be plenty more additional debt put onto the club by Ashley that can be paid off by selling our best players in the future. Good times ahead! Link to post Share on other sites More sharing options...
Stu Posted August 24, 2011 Share Posted August 24, 2011 The idea that the whole debt would have had to be paid off paid by 2016 or else.... LEEDS & PORTSMOUTH!!!!!! I read through the rest of your post but couldn't see where you suggested a way for Shepherd to pay off the £55million by 2015 Link to post Share on other sites More sharing options...
Guest Posted August 24, 2011 Share Posted August 24, 2011 Bear in mind that £100 million of what he is owed is what he missed when he took over the club and didn't do his homework properly. A mistake of his own making and yet the club will have to pay for it. You what? The club? How on earth do you work that out. He will want that back at some point. The question is how and when. Out of curiosity, what do you assume would have happened had Ashley not came in blind and covered that? That money would have been owed to somebody and given we were losing £40m a year at the time, feck knows how that would have been paid off. Link to post Share on other sites More sharing options...
Hudson Posted August 24, 2011 Share Posted August 24, 2011 Bear in mind that £100 million of what he is owed is what he missed when he took over the club and didn't do his homework properly. A mistake of his own making and yet the club will have to pay for it. . Who do you think should pay for it ? at the end of a day NUFC is a business and is liable for all it debts. No matter who's fault the debt is. Just look at MU, there debt was incurred byt the glaziers buying the club. Just look at the share issues MU are having to issue to release capital to serive the debt. Luckily we have Ashley :/ Link to post Share on other sites More sharing options...
Matt Posted August 24, 2011 Share Posted August 24, 2011 As I said above it was 2016. How could the debt be affordable if the club was leaking cash at an alarming rate? Affordable means sustainable out of the clubs existing and future cash flows. Up until that point the club had simply plugged cash flow leaks with more loans at ever increasing interest rates. It was affordable because it was taken out to finance the expansion of the stadium to 52,000 seats and a significant increase in our corporate hospitality capabilities- this was drawing in considerably more than the cash required to service the debt. If net-net the expansion makes money, it doesn't matter what the position is for the overall business. You need to look at that in isolation as a sensible move for the business. We had not (as far as I am aware) plugged cash flow gaps with additional loans, although the club was in a very worrying position with regards to its overdraft (and only a banker's sneeze away from being in a very uncomfortable position)- which is why I still find it odd that Ashley paid so much for the club when it was headed for a very rocky 12 months cash-flow wise. Link to post Share on other sites More sharing options...
Matt Posted August 24, 2011 Share Posted August 24, 2011 Out of curiosity, what do you assume would have happened had Ashley not came in blind and covered that? That money would have been owed to somebody and given we were losing £40m a year at the time, feck knows how that would have been paid off. The stadium loan was only triggered by change of control, which is a pretty standard clause. With regards to the cash crunch, the club would still have found a buyer, but for significantly less than Ashley paid for it. Link to post Share on other sites More sharing options...
Stu Posted August 24, 2011 Share Posted August 24, 2011 Out of curiosity, what do you assume would have happened had Ashley not came in blind and covered that? That money would have been owed to somebody and given we were losing £40m a year at the time, feck knows how that would have been paid off. The stadium loan was only triggered by change of control, which is a pretty standard clause. With regards to the cash crunch, the club would still have found a buyer, but for significantly less than Ashley paid for it. Going back to the question earlier, that UV kindly skirted, what possible scenario do you suggest Shepherd could have had for paying off the stadium debt (and the extra £16m loan) when it became due in 2016? The change of control clause only brought the repayment date forward by 9 years. I'd be really impressed if someone could explain how Shepherd was planning to generate £50m of surplus revenue during that period (bear in mind that he constantly took out of the club during his tenure). Link to post Share on other sites More sharing options...
Spider Jerusalem Posted August 24, 2011 Share Posted August 24, 2011 I'd be really impressed if someone could explain how Shepherd was planning to generate £50m of surplus revenue during that period (bear in mind that he constantly took out of the club during his tenure). By not getting relegated and then having a massive fire sale like we're having now.... Link to post Share on other sites More sharing options...
Stu Posted August 24, 2011 Share Posted August 24, 2011 I'd be really impressed if someone could explain how Shepherd was planning to generate £50m of surplus revenue during that period (bear in mind that he constantly took out of the club during his tenure). By not getting relegated and then having a massive fire sale like we're having now.... Massive fire sale? Link to post Share on other sites More sharing options...
Spider Jerusalem Posted August 24, 2011 Share Posted August 24, 2011 I'd be really impressed if someone could explain how Shepherd was planning to generate £50m of surplus revenue during that period (bear in mind that he constantly took out of the club during his tenure). By not getting relegated and then having a massive fire sale like we're having now.... Massive fire sale? Sorry, massive fire give away. Link to post Share on other sites More sharing options...
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