Gemmel Posted 7 January, 2009 Share Posted 7 January, 2009 6 Million Market Cap 28 Million debt (Including stadium) 7 Million (????) Assets Throw all that together and what do you think someone would have to pay? Assuming that any new buyer convinced Aviva that they would or could make the payments on the stadium, there's no reason why Aviva wouldn't roll the current deal onto any new owners. Barclays would settle for what out of their 8 million owed? 4, 5 ,6 million??? Other creditors would get the same rate in the pound as Barclays get and unless the offer is covers all of those and more, i don't think the shareholders get anything (Could well be wrong and happy to be corrected) But unless there are mutiple buyers we are unlikely to get into a bidding war, so although the above is horribley simplified, what would be a realistic price the club could be bought from the Administrators Link to comment Share on other sites More sharing options...
buctootim Posted 7 January, 2009 Share Posted 7 January, 2009 6 Million Market Cap 28 Million debt (Including stadium) 7 Million (????) Assets Throw all that together and what do you think someone would have to pay? Assuming that any new buyer convinced Aviva that they would or could make the payments on the stadium, there's no reason why Aviva wouldn't roll the current deal onto any new owners. Barclays would settle for what out of their 8 million owed? 4, 5 ,6 million??? Other creditors would get the same rate in the pound as Barclays get and unless the offer is covers all of those and more, i don't think the shareholders get anything (Could well be wrong and happy to be corrected) But unless there are mutiple buyers we are unlikely to get into a bidding war, so although the above is horribley simplified, what would be a realistic price the club could be bought from the Administrators The danger is that the offers for the individual assets of the club will be greater than the offer for the whole club as a going concern. I can imagine, for example, ABP buying the SMS site for £10m and David Loyds buying Staplewood for £2m - but I cant see anyone paying more than £3m for the club as whole unless a very large part of the debt is wiped out. Link to comment Share on other sites More sharing options...
Mr X Posted 7 January, 2009 Share Posted 7 January, 2009 I would think about 50p would buy us outright, you'd have to have a screw lose to take on that debt with little chance of a return Link to comment Share on other sites More sharing options...
aintforever Posted 7 January, 2009 Share Posted 7 January, 2009 6 Million Market Cap 28 Million debt (Including stadium) 7 Million (????) Assets Throw all that together and what do you think someone would have to pay? Assuming that any new buyer convinced Aviva that they would or could make the payments on the stadium, there's no reason why Aviva wouldn't roll the current deal onto any new owners. Barclays would settle for what out of their 8 million owed? 4, 5 ,6 million??? Other creditors would get the same rate in the pound as Barclays get and unless the offer is covers all of those and more, i don't think the shareholders get anything (Could well be wrong and happy to be corrected) But unless there are mutiple buyers we are unlikely to get into a bidding war, so although the above is horribley simplified, what would be a realistic price the club could be bought from the Administrators What's the £6million Market Cap? Link to comment Share on other sites More sharing options...
bridge too far Posted 7 January, 2009 Share Posted 7 January, 2009 What's the £6million Market Cap? what the shares are worth Link to comment Share on other sites More sharing options...
SaintRobbie Posted 7 January, 2009 Share Posted 7 January, 2009 Important question: If we delisted the plc as Sheffield Utd have done, would we have to go into administration? Link to comment Share on other sites More sharing options...
buctootim Posted 7 January, 2009 Share Posted 7 January, 2009 Important question: If we delisted the plc as Sheffield Utd have done, would we have to go into administration? The listing isnt important. The only thing which counts is whether you can service the debts. Link to comment Share on other sites More sharing options...
Capel Saint Posted 7 January, 2009 Share Posted 7 January, 2009 what the shares are worth I believe that the shares become fairly worthless if the plc (the club) goes into administration. Link to comment Share on other sites More sharing options...
Gemmel Posted 7 January, 2009 Author Share Posted 7 January, 2009 The danger is that the offers for the individual assets of the club will be greater than the offer for the whole club as a going concern. I can imagine, for example, ABP buying the SMS site for £10m and David Loyds buying Staplewood for £2m - but I cant see anyone paying more than £3m for the club as whole unless a very large part of the debt is wiped out. 10 Million for SMS. That's a hit of 13 million for Aviva. They would probably keep it or do something else with it for that, wouldn't they ? Link to comment Share on other sites More sharing options...
Window Cleaner Posted 7 January, 2009 Share Posted 7 January, 2009 Whoever offers the creditors the best deal will win the lottery. We owe what about 27 million net, including long term debt on a stadium which cost about 33 million in the first place. Provided you could convince Aviva that your "business plan" would procure them payment on time you can forget that part of the debt. For the rest?? Anyone offering to pay all football debts and about half of the rest would be pretty welcome. I suspect that all the warring parties have their own group of investors lined up in such an eventuality. The losers?? Small tradespeople, HMC+E,the staff who'll be laid off and Barclay's Bank but the latter won't go down without a fight. They'll want everybody who's worth more than a shilling sold to reduce their debt before the administrators do any deal with "consortiums". Link to comment Share on other sites More sharing options...
SaintRobbie Posted 7 January, 2009 Share Posted 7 January, 2009 I believe that the shares become fairly worthless if the plc (the club) goes into administration. I see, so actually the plc's debts would be transfered to our Football Club, which would mean one owner could take the club over. Does the plc cease to operate once in administration? Is it delisted automatically? Link to comment Share on other sites More sharing options...
buctootim Posted 7 January, 2009 Share Posted 7 January, 2009 10 Million for SMS. That's a hit of 13 million for Aviva. They would probably keep it or do something else with it for that, wouldn't they ? What does an insurance company do with an ex football stadium? Apart from the occasional Bon Jovi gig its only good for what it was built for. The only real use apart from as SMS is to knock it down and build something else - and I'd guess the cleared site would be worth a lot less than Aviva lent. I wouldn't be surprised to learn that they have agreed to softer repayment terms for the loan - maybe interest only at a reduced rate for a period of time in the hope things improve. Link to comment Share on other sites More sharing options...
buctootim Posted 7 January, 2009 Share Posted 7 January, 2009 I see, so actually the plc's debts would be transfered to our Football Club, which would mean one owner could take the club over. The debts belong to the organisation -regardless of whether its a listed PLC, private company, Industrial & Provident or charity. Upon admistration a pro rata payout to the creditors would be arranged, the amount dependent on what the assets are sold for. Link to comment Share on other sites More sharing options...
Gemmel Posted 7 January, 2009 Author Share Posted 7 January, 2009 What does an insurance company do with an ex football stadium? Apart from the occasional Bon Jovi gig its only good for what it was built for. The only real use apart from as SMS is to knock it down and build something else - and I'd guess the cleared site would be worth a lot less than Aviva lent. I wouldn't be surprised to learn that they have agreed to softer repayment terms for the loan - maybe interest only at a reduced rate for a period of time in the hope things improve. Much more bon jovi gigs - Only joking, i agree with you! But as i mentioned and window cleaner mentioned, if the new owners could convince Aviva that they could service the debt, surely Aviva would just roll over the agreement to the new owners. As to the softer repayment terms or interest only, i'm pretty sure this has already been done once at least, as per lowe at the AGM (As to why it was so late and i think (But not sure) it eludes to something in the annual report) Link to comment Share on other sites More sharing options...
SaintRobbie Posted 7 January, 2009 Share Posted 7 January, 2009 The debts belong to the organisation -regardless of whether its a listed PLC, private company, Industrial & Provident or charity. Upon admistration a pro rata payout to the creditors would be arranged, the amount dependent on what the assets are sold for. So whoever buys the Club after administration essentially gets the whole lot for a snip rather than paying out alot more now on Shares in the plc (provided the assets are not broken up that is)? Link to comment Share on other sites More sharing options...
buctootim Posted 7 January, 2009 Share Posted 7 January, 2009 So whoever buys the Club after administration essentially gets the whole lot for a snip rather than paying out alot more now on Shares in the plc (provided the assets are not broken up that is)? The administrators would have to assess all the offers they receive and decide which would return the most money to those creditors of the club. Maybe someone who wants to buy the whole club would have the best offer, but the real danger is that most money will be offered by those who just want to buy specific assets leaving the club well and truly ****ed. Link to comment Share on other sites More sharing options...
EastleighSoulBoy Posted 7 January, 2009 Share Posted 7 January, 2009 what the shares are worth Aren't the shares worth diddley squat when we go into Administration? Link to comment Share on other sites More sharing options...
SaintRobbie Posted 7 January, 2009 Share Posted 7 January, 2009 The administrators would have to assess all the offers they receive and decide which would return the most money to those creditors of the club. Maybe someone who wants to buy the whole club would have the best offer, but the real danger is that most money will be offered by those who just want to buy specific assets leaving the club well and truly ****ed. So Fulthorpe's consortium (if it exists, for example) COULD get a better deal if we go into administration? Link to comment Share on other sites More sharing options...
buctootim Posted 7 January, 2009 Share Posted 7 January, 2009 (edited) Much more bon jovi gigs - Only joking, i agree with you! But as i mentioned and window cleaner mentioned, if the new owners could convince Aviva that they could service the debt, surely Aviva would just roll over the agreement to the new owners. As to the softer repayment terms or interest only, i'm pretty sure this has already been done once at least, as per lowe at the AGM (As to why it was so late and i think (But not sure) it eludes to something in the annual report) No more Bon Jovi even if it saves the club! Aviva are probably amongst those with the most to lose from the club folding. More likely somebody who hasnt been paid for three months would push the button. I dont know if we have anyone like that but it could come from Barclays, the bar suppliers, kit suppliers, Revenue & Customs or anyone of dozens of other places. Edited 7 January, 2009 by buctootim Link to comment Share on other sites More sharing options...
bridge too far Posted 7 January, 2009 Share Posted 7 January, 2009 Aren't the shares worth diddley squat when we go into Administration? Yes, but wasn't the question 'what is the market cap'? I understood the market cap was the price of buying up all the shares at their current value (c. 21p). I'm happy to be corrected if I'm wrong Link to comment Share on other sites More sharing options...
buctootim Posted 7 January, 2009 Share Posted 7 January, 2009 So Fulthorpe's consortium (if it exists, for example) COULD get a better deal if we go into administration? Maybe, maybe not. Depends whether he can outbid the flat developers, port owners, marina developers or anyone else who might be interested. Who knows who would be interested in the leftovers of the club and how much they would pay? Link to comment Share on other sites More sharing options...
EastleighSoulBoy Posted 7 January, 2009 Share Posted 7 January, 2009 Yes, but wasn't the question 'what is the market cap'? I understood the market cap was the price of buying up all the shares at their current value (c. 21p). I'm happy to be corrected if I'm wrong I see what you mean but the OP was venturing a value on the shares 'if we go into administration', which was what prompted my query. This is getting very depressing. Link to comment Share on other sites More sharing options...
SaintRobbie Posted 7 January, 2009 Share Posted 7 January, 2009 Maybe, maybe not. Depends whether he can outbid the flat developers, port owners, marina developers or anyone else who might be interested. Who knows who would be interested in the leftovers of the club and how much they would pay? You'd need some guts to turn SMS into flats, a port extension or a marina. Strikes me that this administration move could be linked to a possible takeover. ... there some optimism at last Thanks buc... very helpful. Link to comment Share on other sites More sharing options...
Gemmel Posted 7 January, 2009 Author Share Posted 7 January, 2009 I see what you mean but the OP was venturing a value on the shares 'if we go into administration', which was what prompted my query. This is getting very depressing. Sorry ESB, i didn't word it very well, I'm assuming the market cap acts as little more than a guide when a company goes into adminstration, although i did put that unless the bid exceeds what is owed to the creditors, then i didnt think the shareholders would get anything. Link to comment Share on other sites More sharing options...
labibs Posted 7 January, 2009 Share Posted 7 January, 2009 So whoever buys the Club after administration essentially gets the whole lot for a snip rather than paying out alot more now on Shares in the plc (provided the assets are not broken up that is)? I'm not massively au fait with financial minutiae, but I think it works like this. I think as someone said above, the parties who are owed money can pressure the administrators to sell off some of the assets first. I don't think you could just stitch up Barclays with 10p in the pound and keep Lallana, Davis and Surman, for example. You would have to sell everything of value off first (the entire squad would be for sale and it's up to the adminitstrators whether an offer received is acceptable). Once all of the major assets have been sold (and you have shown them that you have made every effort to repay the debt through the sale of assets) then you can negotiate on paying back a reduced amount. Effectively you need to convince Barclays et al that this is the most they are going to get, take it or leave it. Link to comment Share on other sites More sharing options...
buctootim Posted 7 January, 2009 Share Posted 7 January, 2009 You'd need some guts to turn SMS into flats, a port extension or a marina. Strikes me that this administration move could be linked to a possible takeover. ... there some optimism at last Thanks buc... very helpful. NP, cheers. Sorry for one last negative post. I used to live near the Brighton Goldstone ground. The club couldnt repay a debt to its Chairman, secured on the ground - so he took possession and sold it. I had thought that would never happen because it would make him too unpopular and that no developer would touch the site because local people would boycott whatever was built there. In the event Toys R Us, Comet etc got built and of course people do shop there. Link to comment Share on other sites More sharing options...
Panda Posted 7 January, 2009 Share Posted 7 January, 2009 You'd need some guts to turn SMS into flats, a port extension or a marina. Strikes me that this administration move could be linked to a possible takeover. ... there some optimism at last Thanks buc... very helpful. There can be NO optimism in adminstration. Events will be totally unpredictable and there is no certainty of a club being left at the end of it. Please do not wish for administration. Link to comment Share on other sites More sharing options...
hughieslastminutegoal Posted 7 January, 2009 Share Posted 7 January, 2009 The debts belong to the organisation -regardless of whether its a listed PLC, private company, Industrial & Provident or charity. Upon admistration a pro rata payout to the creditors would be arranged, the amount dependent on what the assets are sold for. Aren't the club and the SLH different legal entities? Isn't there yet another company that holds the stadium? So the legal ownership of assets (and debts) isn't necessarily simply "the club". Could different bits of the organisation be disaggregated from SLH? Link to comment Share on other sites More sharing options...
bridge too far Posted 7 January, 2009 Share Posted 7 January, 2009 Aren't the club and the SLH different legal entities? Isn't there yet another company that holds the stadium? So the legal ownership of assets (and debts) isn't necessarily simply "the club". Could different bits of the organisation be disaggregated from SLH? Usually contracts have Parent Company Guarantees i.e. the parent company assumes the debts of the subsidiary. Don't know if such an arrangement would be in place with SMS / SLH / SFC though. Link to comment Share on other sites More sharing options...
Window Cleaner Posted 7 January, 2009 Share Posted 7 January, 2009 Usually contracts have Parent Company Guarantees i.e. the parent company assumes the debts of the subsidiary. Don't know if such an arrangement would be in place with SMS / SLH / SFC though. You see the thing is the stadium debt is secured against future season ticket sales. It could well be that that guarantee transcends any change of ownership entity. If anything resembling SFC plays professional football it could well be that Aviva gets their pounds of flesh anyway. They're pretty prevoyant at Aviva you know. Worst case scenarios are their second name. Link to comment Share on other sites More sharing options...
bridge too far Posted 7 January, 2009 Share Posted 7 January, 2009 You see the thing is the stadium debt is secured against future season ticket sales. It could well be that that guarantee transcends any change of ownership entity. If anything resembling SFC plays professional football it could well be that Aviva gets their pounds of flesh anyway. They're pretty prevoyant at Aviva you know. Worst case scenarios are their second name. I see the point you're making. The point I was making (I think ) is that, for example, the administrators wouldn't just look at SFC's debts or SLH's debts in isolation. So, as an illustration, Jacksons Farm couldn't be hived off into a subsidiary (e.g. Secure Retirement) to avoid its having to be sold. SLH would assume responsibility for paying off the debts of SFC even if it is via administrators. This is an illustration because I don't have the foggiest idea about who owns what. I'm not for one moment suggesting that this is what RL might do Link to comment Share on other sites More sharing options...
Window Cleaner Posted 7 January, 2009 Share Posted 7 January, 2009 I see the point you're making. The point I was making (I think ) is that, for example, the administrators wouldn't just look at SFC's debts or SLH's debts in isolation. So, as an illustration, Jacksons Farm couldn't be hived off into a subsidiary (e.g. Secure Retirement) to avoid its having to be sold. SLH would assume responsibility for paying off the debts of SFC even if it is via administrators. This is an illustration because I don't have the foggiest idea about who owns what. I'm not for one moment suggesting that this is what RL might do It could well be that we've already hocked JF to someone against borrowing. In fact I'd say that it was highly likely actually. What's the first thing you do when you're playing monopoly and you're skint, yep motgage the Angel Islington, nobody ever lands on it anyway. Link to comment Share on other sites More sharing options...
EastleighSoulBoy Posted 7 January, 2009 Share Posted 7 January, 2009 What's the first thing you do when you're playing monopoly and you're skint, yep motgage the Angel Islington, nobody ever lands on it anyway. Just a little light hearted note How can you Mortgage Angel Islington if you don't own it (because you never land on it to be able to buy it) Nobody likes a smartarrrs! Link to comment Share on other sites More sharing options...
derry Posted 7 January, 2009 Share Posted 7 January, 2009 Didn't the Gas Co. who sold the ground, place covenants on it, restricting it's change of use without their permission? Link to comment Share on other sites More sharing options...
bridge too far Posted 7 January, 2009 Share Posted 7 January, 2009 Didn't the Gas Co. who sold the ground, place covenants on it, restricting it's change of use without their permission? Can a seller dictate that? Or is it the Council that would have to grant a change of use? Usually, whenever a gas company sells its land, a massive decontamination has to be undertaken. Did that happen before SMS was built, does anyone know? It could be that the level of decontamination required is less strict for a football stadium than for, say, residential development. Link to comment Share on other sites More sharing options...
EastleighSoulBoy Posted 7 January, 2009 Share Posted 7 January, 2009 Can a seller dictate that? Or is it the Council that would have to grant a change of use? Usually, whenever a gas company sells its land, a massive decontamination has to be undertaken. Did that happen before SMS was built, does anyone know? It could be that the level of decontamination required is less strict for a football stadium than for, say, residential development. Maybe that's why they all seem raving mad in the boardroom? Link to comment Share on other sites More sharing options...
paulwantsapint Posted 7 January, 2009 Share Posted 7 January, 2009 Is it possible that A sells ground to B then rents it back for say 18 months before busting A's company leaving B without a debt on ground? Link to comment Share on other sites More sharing options...
Chez Posted 7 January, 2009 Share Posted 7 January, 2009 6 Million Market Cap 28 Million debt (Including stadium) 7 Million (????) Assets I thought debts were £43M Link to comment Share on other sites More sharing options...
benjii Posted 7 January, 2009 Share Posted 7 January, 2009 You see the thing is the stadium debt is secured against future season ticket sales. It could well be that that guarantee transcends any change of ownership entity. If anything resembling SFC plays professional football it could well be that Aviva gets their pounds of flesh anyway. They're pretty prevoyant at Aviva you know. Worst case scenarios are their second name. I think this is a misconception arising from a "securitisation" structure that was used in the original debt. "Securitisation" and "security" are two different things. I won't go into detail but in effect securitisation is a way of realising a capital sum up front from an income producing asset (ie season ticket sales). The security on the debt, however, will, unless its been drafted terribly, provide legal charges over just about every fixed asset of the group capable of being subject to a legal charge and will also include floating charges over everything else. That is what a debenture does and Aviva will most certainly have a debenture. The question is who is party to the debenture, but again it would be extremely odd if all group companies were not part of the security structure. Link to comment Share on other sites More sharing options...
SaintRobbie Posted 7 January, 2009 Share Posted 7 January, 2009 I'm not massively au fait with financial minutiae, but I think it works like this. I think as someone said above, the parties who are owed money can pressure the administrators to sell off some of the assets first. I don't think you could just stitch up Barclays with 10p in the pound and keep Lallana, Davis and Surman, for example. You would have to sell everything of value off first (the entire squad would be for sale and it's up to the adminitstrators whether an offer received is acceptable). Once all of the major assets have been sold (and you have shown them that you have made every effort to repay the debt through the sale of assets) then you can negotiate on paying back a reduced amount. Effectively you need to convince Barclays et al that this is the most they are going to get, take it or leave it. But what happens if you've already sold off ALL your assets and you only have kids left? Link to comment Share on other sites More sharing options...
benjii Posted 7 January, 2009 Share Posted 7 January, 2009 Is it possible that A sells ground to B then rents it back for say 18 months before busting A's company leaving B without a debt on ground? Yes, but not if the ground is subject to a legal charge (which it will be). Link to comment Share on other sites More sharing options...
SaintRobbie Posted 7 January, 2009 Share Posted 7 January, 2009 Usually, whenever a gas company sells its land, a massive decontamination has to be undertaken. . So that's why the grass is so good on the pitch! Link to comment Share on other sites More sharing options...
Fan The Flames Posted 7 January, 2009 Share Posted 7 January, 2009 NP, cheers. Sorry for one last negative post. I used to live near the Brighton Goldstone ground. The club couldnt repay a debt to its Chairman, secured on the ground - so he took possession and sold it. I had thought that would never happen because it would make him too unpopular and that no developer would touch the site because local people would boycott whatever was built there. In the event Toys R Us, Comet etc got built and of course people do shop there. The Brighton chairman Bill Archer, a northerner created the situation so he could take possession of the ground. He then sold it to Kingfisher developements (?) for nearly three times the debt secured on it. Who part own Kingfisher, oh yes the one and only Bill Archer. The FA changed the rules on selling grounds after the Brighton con. Lets look at all the other admins, not one clubs ground has been sold under them and I expect and hope that the same will happen at Southampton. Link to comment Share on other sites More sharing options...
Thedelldays Posted 7 January, 2009 Share Posted 7 January, 2009 who says we would be bought..? Link to comment Share on other sites More sharing options...
Fan The Flames Posted 7 January, 2009 Share Posted 7 January, 2009 who says we would be bought..? What club of our size that has gone to administration hasn't been bought. edit of our size Link to comment Share on other sites More sharing options...
Thedelldays Posted 7 January, 2009 Share Posted 7 January, 2009 What club that has gone to administration hasn't been bought. to assume we will get bought is rather arrogant...in this financial climate it seems.. Link to comment Share on other sites More sharing options...
SaintRobbie Posted 7 January, 2009 Share Posted 7 January, 2009 to assume we will get bought is rather arrogant...in this financial climate it seems.. Not really. Fire's probably right. Can't think of many Clubs that havent been bought out.. indeed none. Remember people by Clubs for different reasons - not just for business reasons. Buying a club brings status... successful or not. Link to comment Share on other sites More sharing options...
Thedelldays Posted 7 January, 2009 Share Posted 7 January, 2009 Not really. Fire's probably right. Can't think of many Clubs that havent been bought out.. indeed none. Remember people by Clubs for different reasons - not just for business reasons. Buying a club brings status... successful or not. you are probably rght..but cant think of any that were bought out in the lst recession...(nothing on google..:confused::cool:...) Link to comment Share on other sites More sharing options...
bridge too far Posted 7 January, 2009 Share Posted 7 January, 2009 you are probably rght..but cant think of any that were bought out in the lst recession...(nothing on google..:confused::cool:...) Very different ball game then, if you'll pardon the pun Link to comment Share on other sites More sharing options...
buctootim Posted 7 January, 2009 Share Posted 7 January, 2009 The Brighton chairman Bill Archer, a northerner created the situation so he could take possession of the ground. He then sold it to Kingfisher developements (?) for nearly three times the debt secured on it. Who part own Kingfisher, oh yes the one and only Bill Archer. The FA changed the rules on selling grounds after the Brighton con. Lets look at all the other admins, not one clubs ground has been sold under them and I expect and hope that the same will happen at Southampton. Thanks for that. What are the FA rules on selling a ground, anyone know? Surely they wont take precedence over the administrators though. Link to comment Share on other sites More sharing options...
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