Simon Buttle
Player Valuation: £50m
High interest revolving credit basically, like payday loans, the interest is so high that you spend most of the time paying that without actually paying anything on the actual debt
Toffeeslam
Player Valuation: £35m
Why would you do that and wouldn’t just devalues the asset they just bought ?
It means the club will be spending almost all its revenue on paying interest on huge loans
pfim
Player Valuation: £35m
Then you pay it off or refinance it. It shouldn't be a hinderance to another bidder.
Simon Buttle
Player Valuation: £50m
I agree, you would need someone who could write blank cheques just to get rid of it, would be a nightmare
Simon Buttle
Player Valuation: £50m
777 seem like the type who if they don't get their way in you just know they are going to make things awkward for another party.
Well, exactly.
Really
?All commercially borrowed money in football is around 8-10% interest, higher in the event that a club could default.
If you or I buy a house we take a mortgage against the property. You pay a deposit which de-risks the loan for the bank, and if we don't pay the bank can simply sell the house and cover the loan. As the risk is low so are the interest rates.
With a football club the risk is much higher. Yes a stadium is our home but in the event we don't pay our mortgage and the banks take the club what is the resale market? There is none. So people won't lend.
As it is we already have debt secured against the property the club own, and the future income streams. We are also a few hundred £ away from completion of the stadium. It is why I am increasingly less bothered about the games, there are far bigger battles ahead. I see administration and relegation as inevitable but strangely I'm actually more optimistic in that situation that we get a much better owner and build back better.
If you or I buy a house we take a mortgage against the property. You pay a deposit which de-risks the loan for the bank, and if we don't pay the bank can simply sell the house and cover the loan. As the risk is low so are the interest rates.
With a football club the risk is much higher. Yes a stadium is our home but in the event we don't pay our mortgage and the banks take the club what is the resale market? There is none. So people won't lend.
As it is we already have debt secured against the property the club own, and the future income streams. We are also a few hundred £ away from completion of the stadium. It is why I am increasingly less bothered about the games, there are far bigger battles ahead. I see administration and relegation as inevitable but strangely I'm actually more optimistic in that situation that we get a much better owner and build back better.
When the Prem reject 777 - any buyer billionaire would just refund them in the sale - MSM have put money into the new ground too they will want repaying - also loans that BK secured from building companies that don't exist & are outside offshore investors etc .....
Not according to Moshiri’s own words last year. “I can finish it myself” were his words to the FAB on the stadium.
Tony’s Carp
Player Valuation: £40m
Obviously whoever comes in is going to need a fair amount of cash behind them. But you don't get 800m sports stadiums for nothing so whoever comes in should be willing to pay off a fair amount of the debt to get the finances somewhat on track.
pfim
Player Valuation: £35m
Toxic would be covenants that include:
1. Debt to be paid in full in the event of a change in control (though a new buyer would probably want to refinance anyway).
2. Large penalties for early prepayment (making the cost to refinance very high).
I'm sure there are others, but the amount and the rate aren't that big of a deal. The debt was needed to finish the stadium and keep the lights on. The rate can be refinanced, subject to the above.
1. Debt to be paid in full in the event of a change in control (though a new buyer would probably want to refinance anyway).
2. Large penalties for early prepayment (making the cost to refinance very high).
I'm sure there are others, but the amount and the rate aren't that big of a deal. The debt was needed to finish the stadium and keep the lights on. The rate can be refinanced, subject to the above.
Tony’s Carp
Player Valuation: £40m
Fair enough, although we know that likely wasn't true when he said it. As soon as Russia invaded Ukraine the possibility of us moving into a stadium without external debt disappeared. Even if Moshiri had funded it that would be reflected in the sale price, so either way any potential buyer would need to pay him or the external debt providers.
That was a year after Russia invaded Ukraine.
