Sam wants his money now
Wed Jan 05, 2011 7:59 pm
But will he get it?If so when and how much.
I heard last night the clubs solictors reckon we'll win any court case which might follow.
I heard last night the clubs solictors reckon we'll win any court case which might follow.
Re: Sam wants his money now
Wed Jan 05, 2011 8:10 pm
Of course we will. Hammam/Noades' debt is totally unsecured. They get f**k all in nearly all scenario's!
Re: Sam wants his money now
Wed Jan 05, 2011 8:35 pm
Since62 writes
I have had a long(ish) spell away from posting on messageboards as a health scare caused me to change priorities quite a bit - so I have tended just to sit back and observe for a while.
Now that I am feeling a lot better , maybe its time for a bit of a return on here (no , don`t all get your coats and leave )to give a few opinions on the latest with the deal to be done to settle the Langstone/Sam Hammam debt.Also , the timing may now be a bit more appropriate after he seems to have finally dropped his attempts to orchestrate a popularity and/or misinformation campaign to try and get back involved with the club.
Like many others I have been somewhat puzzled as to why the new major shareholders did not take the opportunity to settle the Langstone debt at £10m before the deadline of 31 Dec 2010.However , having looked at the available information again (prompted by one of my former work colleagues who also specialised in football finances)I realised that I too had greatly overestimated the impact of not meeting the deadline.
To explain , I need to give a reminder of what the debt is all about and what deals have been struck to try and sort it (bear with me).
To fund its losses incurred both before and during the Sam Hammam era , the club borrowed about £24m from Citibank , an established (if not "mainstream" in the UK) financial institution.This was not secured against any club assets (largely due to the fact that it didn`t really have any at the time) so had to be secured by other means.
My strong belief is that such security was provided by guarantees by the Hammam family so when the club could not repay the Citibank loan when due for repayment , there was little alternative but for the family to replace the loan with one from their Langstone company.To not do so would have meant Citibank folding the club and the full £24m guarantee being called on. By putting Langstone in , at least the guarantee wouldn`t be called on and there was a chance (even if a slim one) of getting the money back from the club at a future date.
As time went on , however , and more and more losses were racked up , it became apparent that the chances of getting a repayment were receding fast.Even more so after after Sam lost his control of the club and its cheque book after the "coup" by Ridsdale/PMG etc.So Sam was left with no option but to renegotiate the deal on more than one occasion.
Originally , the full debt of £24m was repayable by the end of 2011(based on the false hope of major cash from the new stadium build and associated retail development which was originally to have been for the club`s/Sam`s profit).When the new build was substantially delayed - primarily down to Sam`s failure to produce a business plan or enough cash - such a deadline became impossible and instead a new deal was struck. This was for a debt of £15m plus interest to be repaid by Dec 2016 with the balance of (up to) £9m being payable out of stadium naming rights and/or a promotion to the Premiership within that new timescale.When even this became unlikely , the deal was further amended to paying £10m by the end of last month plus up to £5m re the naming rights/promotion.
All 3 of the above repayment plans are referred to in published audited accounts.However , SH has made recent claims that the most recent agreement was never signed and therefore was not binding - very hard to believe when it is noted in the May 2009 accounts (only signed off last Summer after the Malaysian investment in May)so for him to be right the club`s directors ,major shareholders and auditors would all have to be wrong (I know who I believe).
Now the important bit (at last ). By missing the Dec2010 deadline , I believe the debt agreement reverts to the one previously in force - i.e the debt goes up from £10m to £11m (then £12m if not settled by Dec2011 etc until it eventually goes back up to the full £16m if not settled by Dec 2016).
So the "extra cost" of not settling is only £1m. Maybe the Malaysians have decided that the cash flows could be better used on new signings rather than fork out the full £10m now.The other £9m now linked to naming rights is only payable if those naming rights are sold , and only out of that money rather than an asset the club currently has so is not a "real" liability as such , even though it is allowed for in full in the accounts (a technical accounting requirement).
In my view , an extra £1m of debt for a further year may make sense balanced against the benefit of saving £10m in short term cashflows.
I have had a long(ish) spell away from posting on messageboards as a health scare caused me to change priorities quite a bit - so I have tended just to sit back and observe for a while.
Now that I am feeling a lot better , maybe its time for a bit of a return on here (no , don`t all get your coats and leave )to give a few opinions on the latest with the deal to be done to settle the Langstone/Sam Hammam debt.Also , the timing may now be a bit more appropriate after he seems to have finally dropped his attempts to orchestrate a popularity and/or misinformation campaign to try and get back involved with the club.
Like many others I have been somewhat puzzled as to why the new major shareholders did not take the opportunity to settle the Langstone debt at £10m before the deadline of 31 Dec 2010.However , having looked at the available information again (prompted by one of my former work colleagues who also specialised in football finances)I realised that I too had greatly overestimated the impact of not meeting the deadline.
To explain , I need to give a reminder of what the debt is all about and what deals have been struck to try and sort it (bear with me).
To fund its losses incurred both before and during the Sam Hammam era , the club borrowed about £24m from Citibank , an established (if not "mainstream" in the UK) financial institution.This was not secured against any club assets (largely due to the fact that it didn`t really have any at the time) so had to be secured by other means.
My strong belief is that such security was provided by guarantees by the Hammam family so when the club could not repay the Citibank loan when due for repayment , there was little alternative but for the family to replace the loan with one from their Langstone company.To not do so would have meant Citibank folding the club and the full £24m guarantee being called on. By putting Langstone in , at least the guarantee wouldn`t be called on and there was a chance (even if a slim one) of getting the money back from the club at a future date.
As time went on , however , and more and more losses were racked up , it became apparent that the chances of getting a repayment were receding fast.Even more so after after Sam lost his control of the club and its cheque book after the "coup" by Ridsdale/PMG etc.So Sam was left with no option but to renegotiate the deal on more than one occasion.
Originally , the full debt of £24m was repayable by the end of 2011(based on the false hope of major cash from the new stadium build and associated retail development which was originally to have been for the club`s/Sam`s profit).When the new build was substantially delayed - primarily down to Sam`s failure to produce a business plan or enough cash - such a deadline became impossible and instead a new deal was struck. This was for a debt of £15m plus interest to be repaid by Dec 2016 with the balance of (up to) £9m being payable out of stadium naming rights and/or a promotion to the Premiership within that new timescale.When even this became unlikely , the deal was further amended to paying £10m by the end of last month plus up to £5m re the naming rights/promotion.
All 3 of the above repayment plans are referred to in published audited accounts.However , SH has made recent claims that the most recent agreement was never signed and therefore was not binding - very hard to believe when it is noted in the May 2009 accounts (only signed off last Summer after the Malaysian investment in May)so for him to be right the club`s directors ,major shareholders and auditors would all have to be wrong (I know who I believe).
Now the important bit (at last ). By missing the Dec2010 deadline , I believe the debt agreement reverts to the one previously in force - i.e the debt goes up from £10m to £11m (then £12m if not settled by Dec2011 etc until it eventually goes back up to the full £16m if not settled by Dec 2016).
So the "extra cost" of not settling is only £1m. Maybe the Malaysians have decided that the cash flows could be better used on new signings rather than fork out the full £10m now.The other £9m now linked to naming rights is only payable if those naming rights are sold , and only out of that money rather than an asset the club currently has so is not a "real" liability as such , even though it is allowed for in full in the accounts (a technical accounting requirement).
In my view , an extra £1m of debt for a further year may make sense balanced against the benefit of saving £10m in short term cashflows.
Re: Sam wants his money now
Wed Jan 05, 2011 9:18 pm
Interesting read.
Re: Sam wants his money now
Wed Jan 05, 2011 9:20 pm
ihatealiens wrote:Interesting read.
TOTALLY OUT OF DATE, EVERYTHING OUT OF DATE SORRY .
Re: Sam wants his money now
Wed Jan 05, 2011 9:21 pm
Forever Blue wrote:ihatealiens wrote:Interesting read.
TOTALLY OUT OF DATE, EVERYTHING OUT OF DATE SORRY .
Got some new news then eh?
Re: Sam wants his money now
Wed Jan 05, 2011 9:22 pm
ihatealiens wrote:Forever Blue wrote:ihatealiens wrote:Interesting read.
TOTALLY OUT OF DATE, EVERYTHING OUT OF DATE SORRY .
Got some new news then eh?
Carl will back this up NOW
Re: Sam wants his money now
Wed Jan 05, 2011 9:29 pm
The since 62 post makes a lot of sense.
Why commit £10M now when it will only cost £11m next year. If we get promoted no worries and in reality interest on £10m would be at least £500k and a far higher return likely if invested in a profitable business elsewhere.
If we don't go up admin is possible and the debt could be irrecoverable anyway.
Why commit £10M now when it will only cost £11m next year. If we get promoted no worries and in reality interest on £10m would be at least £500k and a far higher return likely if invested in a profitable business elsewhere.
If we don't go up admin is possible and the debt could be irrecoverable anyway.
Re: Sam wants his money now
Wed Jan 05, 2011 10:40 pm
sleepwalker wrote:But will he get it?If so when and how much.
I heard last night the clubs solictors reckon we'll win any court case which might follow.
"Sam wants his money now...." and "I heard last night the club's solicitors RECKON we'll win any court case...."
And you want to know why I get so annoyed with SOME on here?!?!
ABSOLUTELY NO REAL FOUNDATION AND DEVOID OF THE IMPORTANT WORD....FACT!!
Get real....or back up your statements!!
Re: Sam wants his money now
Wed Jan 05, 2011 10:42 pm
im craving for a nice cuppa
Re: Sam wants his money now
Wed Jan 05, 2011 11:00 pm
Sven Ghali wrote:sleepwalker wrote:But will he get it?If so when and how much.
I heard last night the clubs solictors reckon we'll win any court case which might follow.
"Sam wants his money now...." and "I heard last night the club's solicitors RECKON we'll win any court case...."
And you want to know why I get so annoyed with SOME on here?!?!
ABSOLUTELY NO REAL FOUNDATION AND DEVOID OF THE IMPORTANT WORD....FACT!!
Get real....or back up your statements!!
I made it up just to drag the info out of carl it worked.