Topcat Posted 3 April, 2009 Share Posted 3 April, 2009 The Council buy SMS for £10m from SLH and Aviva write down the debt and accept £10m from SLH. The Council then rent SMS to SFC for £0.5m a yr which would give a 5% return to the Council, better than the banks offer. A new consortium "Saints 2009" buys SFC and the Training ground from SLH for £0.5m free of debt. SLH sell Jacksons Farm for £3m to developers. Excluding Aviva/SMS, that would leave SLH with £3.5m and debts of just over £6m. It then folds and creditors receive just over 50p for each £1 owed. Link to comment Share on other sites More sharing options...
alpine_saint Posted 3 April, 2009 Share Posted 3 April, 2009 Where's the council going to get 10million from ? Link to comment Share on other sites More sharing options...
Made in Southampton Posted 3 April, 2009 Share Posted 3 April, 2009 You've oviously given this slot of thought. Link to comment Share on other sites More sharing options...
Clapham Saint Posted 3 April, 2009 Share Posted 3 April, 2009 The Council buy SMS for £10m from SLH and Aviva write down the debt and accept £10m from SLH. The Council then rent SMS to SFC for £0.5m a yr which would give a 5% return to the Council, better than the banks offer. A new consortium "Saints 2009" buys SFC and the Training ground from SLH for £0.5m free of debt. SLH sell Jacksons Farm for £3m to developers. Excluding Aviva/SMS, that would leave SLH with £3.5m and debts of just over £6m. It then folds and creditors receive just over 50p for each £1 owed. Baiscally, yes, except that Aviva wouldn't just write down the debt. The amount that they are short by (in your exaple £13m I think) would rank as an unsecured claim alongside the other creditors who would then get just 18p in the pound. There would also be some minor differences depending upon which debts sit within which Companies but ... meh Link to comment Share on other sites More sharing options...
Scummer Posted 3 April, 2009 Share Posted 3 April, 2009 Where's the council going to get 10million from ? How much is their annual budget? If I'm reading this correctly, the budget for 2009-10 is £179,000,000. So it's about 5% of the annual budget. http://www.southampton.gov.uk/Images/Conservative%20budget%20resolution%20appendices_tcm46-222240.pdf Of course, I may have read that file wrong...... Link to comment Share on other sites More sharing options...
Genghis78 Posted 3 April, 2009 Share Posted 3 April, 2009 Art is one of the things in the world right now that I think is holding its value, and Southampton Council (so us by definition) owns £150m worth. Much as I would hate to see it go, SFC is more of a part of our heritage than a donated Monet, so I wonder if the Council can sell £20-30 million worth and by the stadium. The previous post on rent could be agreed on, the council get some nice conference facilities, and there's change left over to carry on investing Win-win? http://www.dailyecho.co.uk/search/3767831.They_are_in_the_Monet/ Link to comment Share on other sites More sharing options...
Topcat Posted 3 April, 2009 Author Share Posted 3 April, 2009 Where's the council going to get 10million from ? Using some of their investment money which will probably be earning a lot less than 5%. I had a quick look online but the main council site did not easily provide the information. If there are no reserves then why not flog off all the art work that is not covenanted because most of it is never displayed due to shortages of space? (I now see that Ghengis explains this very well above). Link to comment Share on other sites More sharing options...
Topcat Posted 3 April, 2009 Author Share Posted 3 April, 2009 Baiscally, yes, except that Aviva wouldn't just write down the debt. The amount that they are short by (in your exaple £13m I think) would rank as an unsecured claim alongside the other creditors who would then get just 18p in the pound. There would also be some minor differences depending upon which debts sit within which Companies but ... meh But presumably Aviva's mortgage would give them rights over SMS. In essence if SLH defaults on the loan then Aviva gets SMS which it would then have to sell off for a "going rate". £10m in a market with no bidders would be a good price. Hence it ends up righting off the £13m+. Link to comment Share on other sites More sharing options...
Clapham Saint Posted 3 April, 2009 Share Posted 3 April, 2009 But presumably Aviva's mortgage would give them rights over SMS. In essence if SLH defaults on the loan then Aviva gets SMS which it would then have to sell off for a "going rate". £10m in a market with no bidders would be a good price. Hence it ends up righting off the £13m+. Although the idea of "handing back the keys" is a fairly common one it doesn't happen in reality. What do Aviva want with a 32,000 seater stadium? If they could simply take the deeds to the stadium they wouldn't be able to do anything with it and so it would effectively be worthless. Aviva hold a debenture over the stadium, which in essence gives them first call on any proceeds (after selling costs). If the proceeds are insufficient to repay the full amount that they are owed then the debt doesn't simply dissapear, it is still owed but as the Company is in administration has to be lumped in with everyopne else who doesn't have any (further) security. Otherwise why wouldn't everybody who found themselves in negative equity, businesses or individuals simply hand back the keys and walk away. Link to comment Share on other sites More sharing options...
Topcat Posted 3 April, 2009 Author Share Posted 3 April, 2009 But Clapham Saints, with SLH stopping all mortgage payments then Aviva would re-possess and put it up for sale. Which is why I wondered if a deal with the Council would be the sort of quick fix that the administrators may arrange? I doubt that SLH could sell SMS without the permission of Aviva. Link to comment Share on other sites More sharing options...
Clapham Saint Posted 3 April, 2009 Share Posted 3 April, 2009 But Clapham Saints, with SLH stopping all mortgage payments then Aviva would re-possess and put it up for sale. Which is why I wondered if a deal with the Council would be the sort of quick fix that the administrators may arrange? I doubt that SLH could sell SMS without the permission of Aviva. But that's my point. In reality nobody will re-possess anything from a company. The debenture gives them the right to appoint an administrator (which has happened). In an administration the excess of what they are owed will be an unsecured claim in the administration. Even if re-possetions did happen, if you were Aviva, would you chose the procedure whereby you didn't get another bite at the cherry or would you chose the one where you did? The fairness of this is obviously something which you could argue about but that's a separate discussion.. Link to comment Share on other sites More sharing options...
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