Graham Clark":7fedj6v8 said:
Damon.Lenszner":7fedj6v8 said:
Just hypothetically Graham - a £4million valuation on the reduced size freehold and a 75% loan to value would still require
a £1 million deposit. A £3million loan at 6% commercial mortgage rate over 25 years on an interest only basis would mean repayments of £180,000 per year - £15,000 more than the rent (at division 2 rate), the stadium once again in private hands, the club once again raising cash against the stadium to pay off debt and we would still need to borrow for the £1million deposit.
Graham your knowledge of Commercial Property deals far exceeds my own and I would stand happily corrected if these figures are painting too black a picture.
I was being hypothetical Damon to explain a potential way out, but I did include the HHP land in the calculation for which James Brent already owns the freehold. He would add the stadium freehold to that with all its inherent dangers for future ownership. That substantially changes the potential loan to value and ability to obtain a loan on more favourable terms. It will have the risks as you have indicated.
The Football Creditor debt is just that a debt to the 300 or so individuals (although the staff element of that has been settled by the GTs accelerated payments and is subject to a separate repayment schedule). We have two full seasons of unbudgeted income to reduce that debt by either transfers, unexpected cup runs or increased attendances and commercial income. Who knows the FC debt could be reduced to much more manageable levels depending on the team's performance in those two seasons.
The main danger is not administration because the FC repayments could still be rescheduled or renegotiated for a longer term but a points deduction for non-compliance with a Football League term agreement as part of the exit from administration and the transfer of the Football League share. As we know the loss of 10 points can have devastating consequences.
I know some of this debate is happening on the Grandstand thread but there really is a lot of important points covered on this thread.
In summary then
1)the GTs money is only a loan.
2)The club has to pay £2m by October 2016
3)No sign of when the Grandstand work will start or, more importantly, some revenue arise from it.
4) In addition, the Club is committed to the repayments to PASTD (£330k, I think).
Not a very rosy picture it seems.
Given this scenario, I imagine that should we receive any decent offers for any player over summer or indeed in the January window, then it may be difficult to turn these down. Of course, accepting bids for our better players could be counter productive for revenue generation in the long run, especially as we hope to be promotion contenders next season.
Perhaps, over the summer, we will get some further clarity on the Board's strategy.
