sidthesquid Posted 3 April, 2009 Share Posted 3 April, 2009 If SLH have ceased to be and they have a mortgage with NU/Aviva at reportedly a fixed 8% interest, will any new owner have to stick to that rate or will it be renegotiated at current market levels? Presumably halving the interest payable on £23m would make a huge difference to the outgoings for any fututre owner Link to comment Share on other sites More sharing options...
Clapham Saint Posted 3 April, 2009 Share Posted 3 April, 2009 If SLH have ceased to be and they have a mortgage with NU/Aviva at reportedly a fixed 8% interest, will any new owner have to stick to that rate or will it be renegotiated at current market levels? Presumably halving the interest payable on £23m would make a huge difference to the outgoings for any fututre owner There isn't a set way of doing it. An investor could make an offer to take over the mortgage in return for the ownership of the stadium. An investor could negotiate a new mortgage with (say) Lloyds for £5m and offer the administrators £5m for the stadium. If that is the highest offer it will be the one they have to take and Norwich Union will take a hit for the remaining £18m (give or take). Link to comment Share on other sites More sharing options...
Channon's Sideburns Posted 3 April, 2009 Share Posted 3 April, 2009 One other cost to bear in mind is whether the current mortgage arrangement is tied-in to a particular deal - if so, exit penalties may apply, which would then be added to the debt. Assuming of course that the debt isn't officially 'written off' - no point in Aviva adding on say 2% to the loan if it won't get repaid. Link to comment Share on other sites More sharing options...
jonah Posted 3 April, 2009 Share Posted 3 April, 2009 If SLH have ceased to be and they have a mortgage with NU/Aviva at reportedly a fixed 8% interest, will any new owner have to stick to that rate or will it be renegotiated at current market levels? Presumably halving the interest payable on £23m would make a huge difference to the outgoings for any fututre owner I'm not sure "current market levels" are cheaper - the headline BOE interest rate is irrelevant, commercial property loans will be at 25 year LIBOR swap rate + a significant premium... that premium is usually 1-5% for commercial property and in the current climate I think they'd be lucky to get LIBOR + 5%. I have just seen one company with £20m *cash* negotiate an extension to their £5m overdraft at LIBOR + 2.75%... banks are lending at punitive rates. Link to comment Share on other sites More sharing options...
1976_Child Posted 3 April, 2009 Share Posted 3 April, 2009 I'm not sure "current market levels" are cheaper - the headline BOE interest rate is irrelevant, commercial property loans will be at 25 year LIBOR swap rate + a significant premium... that premium is usually 1-5% for commercial property and in the current climate I think they'd be lucky to get LIBOR + 5%. I have just seen one company with £20m *cash* negotiate an extension to their £5m overdraft at LIBOR + 2.75%... banks are lending at punitive rates. agreed. BoE base rate is about as relevant as a soggy mackerel riding a moped. Link to comment Share on other sites More sharing options...
exit2 Posted 3 April, 2009 Share Posted 3 April, 2009 the other thing here with this part of the debt is that it is structured. I think the main problem we have is the OD and the continual rising operating costs. There is or was a bond in place with the current directors. Im hoping NU will continue this bond with the new owners Link to comment Share on other sites More sharing options...
nathan Posted 3 April, 2009 Share Posted 3 April, 2009 Surely, NU have an asset that is worth very little to anyone but us? The land can't be used for housing due to the proximity to the gas works and I can't imagine it would be very popular for retail, so the only option would be industrial. Is anyone really going to pay £23 million to build industrial units? Therefore, surely if someone came in and said here's £10 million (pie in the sky figure by the way), write off the rest, what option do they have? It may just be me looking at it simplistically but I don't think NU have any interest in us being liquidated. Link to comment Share on other sites More sharing options...
rooney Posted 3 April, 2009 Share Posted 3 April, 2009 The truth in this scenario is that anything is negotiable! Link to comment Share on other sites More sharing options...
um pahars Posted 3 April, 2009 Share Posted 3 April, 2009 Surely, NU have an asset that is worth very little to anyone but us? The land can't be used for housing due to the proximity to the gas works and I can't imagine it would be very popular for retail, so the only option would be industrial. Is anyone really going to pay £23 million to build industrial units? Therefore, surely if someone came in and said here's £10 million (pie in the sky figure by the way), write off the rest, what option do they have? It may just be me looking at it simplistically but I don't think NU have any interest in us being liquidated. No they wouldn't. Going through some numbers with Granty last night and I mentioned to him that as far as I could see the original purchase price of the SMS land only was just over £4m. I have no idea how prices have moved since then, nor what the current climate would do to it's value, but I can't see it being worth that much, particularly when there would be some demolition costs to get it back to it's original state:mad: Link to comment Share on other sites More sharing options...
Torres Posted 3 April, 2009 Share Posted 3 April, 2009 I have no idea how prices have moved since then, nor what the current climate would do to it's value, but I can't see it being worth that much, particularly when there would be some demolition costs to get it back to it's original state:mad: Weren't there significant costs in cleaning the site in preparation for building SMS? Link to comment Share on other sites More sharing options...
Ewell Posted 3 April, 2009 Share Posted 3 April, 2009 Weren't there significant costs in cleaning the site in preparation for building SMS? Have you lost your phone now? Link to comment Share on other sites More sharing options...
Torres Posted 3 April, 2009 Share Posted 3 April, 2009 Have you lost your phone now? It's in my man-bag. :cool: Why? Link to comment Share on other sites More sharing options...
Torres Posted 3 April, 2009 Share Posted 3 April, 2009 It's in my man-bag. :cool: Why? Oh, I see. Link to comment Share on other sites More sharing options...
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