Re: Bishop International Update
Posted: 12:17 26 Jul 2011
Graham Clark wrote:
However, BIL are going a step further. It is reported that they are providing a sum variously reported in size but believed to be in excess of £1m to assist the trading of PAFC (125) Ltd in its first year at least. Now in a commercial world that is most unusual. It is, in effect an admittance that PAFC (125) Ltd possibly cannot trade solvently and meet all its liabilities in its first trading year. I may have missed it but why is this the case? Is it anything to do with Football Creditor payments?
Graham - this, in my opinion, is an important question to which I really don't know the answer... Can anyone else explain it to me?
If the predicted £1m year-one deficit is not due to the money owed to the football creditors, then where does it come from? Surely, if PAFC (125) can't trade solvently as League 2 club from a standing start with all debts cleared, there's something wrong. We have already sold 2,500 season tickets (apparently) and we can realistically expect attendances of 4,000+ for every home game. If it is not possible to run a solvent football club with that sort of projected cashflow, then are we saying every team in League 2 must be trading insolvently?
If the predicted £1m year-one deficit is due to the money owed to the football creditors, then I have another question: In this case we are assuming BIL are going to effectively give the £1m to PAFC (125) to pay the football creditors. Why wouldn't BIL just pay them directly as part of the takeover agreement? Why the need to shift the money to PAFC (125), and then have them pay the football related debts? What does anyone gain from that?