Two Birds - One Stone

[Guided Missile]

I dug up two old posts of mine and think we might be in a position to remove both of the main stumbling blocks, IMHO, to our progress in the choppy waters of a recession, namely a ridiculously high interest charge on the stadium loan and a pointless AIM listing cost.

Between them, ie a renegotiated 4.5% fixed interest rate on the stadium loan and an elimination of £250K in the fees our professional advisors rip us off, for our pointless AIM listing, I reckon we could save enough to pay off our creditors in a couple of years, if our attendance and income hold up.

As many of our more vocal posters have suggested for a long time, I think it is time to delist Southampton Leisure plc and admit that the original basis for our listing, first on the main market and now on AIM was an expensive mistake from the outset.

 

Yesterday Sheffield United delisted from AIM, citing economic turmoil and costs. The group was reported in the Times today as saying that the susceptibility of its share price to market conditions was not to the business's benefit and its AIM listing took up too much management time and money, which could be better spent on getting the football side back into the Premier League. Moreover, it said that, like most other listed football clubs, it is unable to raise funds from institutional investors and did not expect this to change in the foreseeable future.

 

Circumstances change and I think it's time to recognise that. The problem is, the main architect of the original listing is running the plc. I wonder if he has the humility to admit that listing hasn't worked, beyond being able to obtain a mortgage at a cost of 6.5% over base for the construction of our new shed.

 

I wonder how many players we could retain with the money saved by delisting?

 

The benefit of the recent Bank of England base rate cut will do little to help Southampton Leisure plc. It must have seemed like a good idea when our club negotiated a 25 year fixed rate interest of 8.35% on the stadium loan, at a cost of £560,000 back in 2001.

With a base rate of 3% that seems like a pi££ poor deal now. Luckily the £1,000,000 loan we got in 2003 was borrowed at base rate plus 2% which means the recent rate cuts will save the club £20,000 in interest per year compared to a couple of months ago. Unfortunately, the £500,000 a year potential savings on the stadium loan, if we had negotiated a tracker rate, disappeared in the stroke of Lowe's pen, together with the £560K mortgage fee.

 

Suckers.....