Why I Believe VT CAPEX Projects Are A Positive

Last night Carl posted this thread;

WORLD CLASS" is how the training facilities at Vale were described when it was officially opened on December 15th 2008.

Yes I would like us to have our own training ground that is owned by the club but why is there a need to spend £10million on something when we currently have "state of the art training facilities which are second to none".

It is one of the items on the agenda of Vincent Tan as part of the re-branding which baffles me, if we were still training on "dog shit park" then I could understand it better but do we need to do this right now ?

At a later date, when we are an established Premier League club and certainly a club with a better balance sheet than we currently have, I would be more for it but at this present time I don't understand the need to add £10million to our debt when we have facilities which are more than suitable.

I remember how well the then new training facilities were received by everyone at our club and no one can doubt when compared to "Dog Shit Park" a huge step forward for our club, but let's face it Ridsdale was never going to give it anything else other than the state of the art second to none stuff. As good as these facilities are they are in my opinion not state of the art and are actually second to quite a lot. But let's face it we are talking Ridsdale the man who gave us the Golden Ticket scam so who really believed the rhetoric?

Also these facilities are not owned by the club and do not appear on the list of assets on the club balance sheet. As I see these facilities are an operating cost, a liability which costs the club £200,000 each year. For that the club gets one training pitch is that good value for money and does it meet the needs of a club with a first team, Under 21team and of course the academy teams. We all know our club has the use of the university training fields together with it's own building at Treforest, but again not an asset and how much does that cost the club each year.

VT has proposed 2 new CAPEX projects the expansion of the stadium, as and when required, and a new training ground both of which will increase the fixed assets of the club and therefore have a very positive effect on the balance sheet. The club would have a new training ground, which could house all ages from academy to first team, and also be available for hire outside of training hours thereby bringing in revenue and reducing operating costs. The stadium expansion would increase the value of the stadium and increase revenue by means of ticket sales.

I accept the club will have to repay the loans but each year the asset will be there and the loans or liability for the club will reduce as payments on the loans are made, much like PMG and the Premier Seating. In short the balance sheet will improve.

The matter of repaying historical debt and debt to equity conversion is a completely seperate issue and should not ,and in my opinion must not affect the chance of two fantastic capital projects which will be hugely beneficial to the club in the years to come.

Carl you know my opinion on the Langston issue and I will be crystal clear for others, I will never understand why VT and the club cannot see that sorting this issue now would be seen as such a massive act of good faith by the fans. Whatever the reason the club is missing a real opportunity here but what right do I or any of us have to spend VT's money. None.

Langston will get sorted, PMG and Ranson will get sorted and I believe VT will convert as much of the loans he as made to equity. Of that I have absolutely no doubt.

All I can say having read this board over the last few days is thank god we have a successful business man running the club and not the fans.

In VT we have a man with not only the financial resource to resolve our historical debt but a man of vision who can see the longterm benefits of capital investment in a training ground and stadium expansion.

Good post (again) CastleBlue and (again) I agree with all of it

I believe your thinking is going in the right direction. VT is asset building and getting the club ready for the FFP rules.

My view on Langston is much the same, except the reason they are not paying now is because they simply don't have to. The plan (according to VT's recent budget) is to pay up by May 2013 so why not have £10m (or even £7m) in your bank account for 11 months, rather than someone else's?

The debt to equity will happen but not until the £100m has been fully invested. That means the trainning ground has to be built and the stadium expansion also, which could take years.

This is a long term project which might involve us being sold on, once everything is completed.

Well said Castle

absolutely. In short there are many people on here who have their own views and thats fine but ultimately:

VINCENT TAN OWNS THIS CLUB
VINCENT TAN IS EXTREMELY WEALTHY
VINCENT TAN CAN THEREFORE DO EXACTLY AS HE SEES FIT

talk on the Langstone debt and all the rest is just that - talk, assumptions opinons and conjecture. Not fact.

Good post (again) CastleBlue and (again) I agree with all of it

I believe your thinking is going in the right direction. VT is asset building and getting the club ready for the FFP rules.

My view on Langston is much the same, except the reason they are not paying now is because they simply don't have to. The plan (according to VT's recent budget) is to pay up by May 2013 so why not have £10m (or even £7m) in your bank account for 11 months, rather than someone else's?

The debt to equity will happen but not until the £100m has been fully invested. That means the trainning ground has to be built and the stadium expansion also, which could take years.

This is a long term project which might involve us being sold on, once everything is completed.

i personally feel that they are preparing us to sell us on.. but what if we dont get to the prem in the next 2 yrs or so?? with a new training facility half built, stadium expansion plans still ongoing, they could then want to cash in on their equity, leaving us with yet again another huge debt..

the only way this is going to work, is if we invest in the squad, get to the prem, and stay there. then with the new training facilities, a 35k ground and being financially stable they could look to new investors and cash in..

while i agree having the state of the art facility makes good financial sense, the money first should be used on the playing squad..
at the moment the current training facilities are good enough and at the same cost annually as we are roughly paying kenny miller...

Great post as always, there is no doubt why Tan is doing what he is doing to the club in my view

Making the club debt free through a debt to equity exchange, adding these assets to mention in the original post, and attempting to get us into the premier league, attempting to increase revenue through Asia in an attempt to reduce or nullify the monthly losses....

What an easy sell we would then become, I have no issue with the fact that Tan is creating something to sell on for profit, As long as we benefit from this, no doubt a new owner would want to make an impact on the fans by building bridges with them...back to blue no doubt!

Good post (again) CastleBlue and (again) I agree with all of it

I believe your thinking is going in the right direction. VT is asset building and getting the club ready for the FFP rules.

My view on Langston is much the same, except the reason they are not paying now is because they simply don't have to. The plan (according to VT's recent budget) is to pay up by May 2013 so why not have £10m (or even £7m) in your bank account for 11 months, rather than someone else's?

The debt to equity will happen but not until the £100m has been fully invested. That means the trainning ground has to be built and the stadium expansion also, which could take years.

This is a long term project which might involve us being sold on, once everything is completed.

i personally feel that they are preparing us to sell us on.. but what if we dont get to the prem in the next 2 yrs or so?? with a new training facility half built, stadium expansion plans still ongoing, they could then want to cash in on their equity, leaving us with yet again another huge debt..

the only way this is going to work, is if we invest in the squad, get to the prem, and stay there. then with the new training facilities, a 35k ground and being financially stable they could look to new investors and cash in..

while i agree having the state of the art facility makes good financial sense, the money first should be used on the playing squad..
at the moment the current training facilities are good enough and at the same cost annually as we are roughly paying kenny miller...

Looking at his previous ventures with Facebook and Mcdonalds I dare say that Tan knows that the key part of the jigsaw is playing premier league football as far as a future sale is concerned. I'm confident MM will get the squad investment cash he needs....let's just hope he spends it!

Last night Carl posted this thread;

WORLD CLASS" is how the training facilities at Vale were described when it was officially opened on December 15th 2008.

Yes I would like us to have our own training ground that is owned by the club but why is there a need to spend £10million on something when we currently have "state of the art training facilities which are second to none".

It is one of the items on the agenda of Vincent Tan as part of the re-branding which baffles me, if we were still training on "dog shit park" then I could understand it better but do we need to do this right now ?

At a later date, when we are an established Premier League club and certainly a club with a better balance sheet than we currently have, I would be more for it but at this present time I don't understand the need to add £10million to our debt when we have facilities which are more than suitable.

I remember how well the then new training facilities were received by everyone at our club and no one can doubt when compared to "Dog Shit Park" a huge step forward for our club, but let's face it Ridsdale was never going to give it anything else other than the state of the art second to none stuff. As good as these facilities are they are in my opinion not state of the art and are actually second to quite a lot. But let's face it we are talking Ridsdale the man who gave us the Golden Ticket scam so who really believed the rhetoric?

Also these facilities are not owned by the club and do not appear on the list of assets on the club balance sheet. As I see these facilities are an operating cost, a liability which costs the club £200,000 each year. For that the club gets one training pitch is that good value for money and does it meet the needs of a club with a first team, Under 21team and of course the academy teams. We all know our club has the use of the university training fields together with it's own building at Treforest, but again not an asset and how much does that cost the club each year.

VT has proposed 2 new CAPEX projects the expansion of the stadium, as and when required, and a new training ground both of which will increase the fixed assets of the club and therefore have a very positive effect on the balance sheet. The club would have a new training ground, which could house all ages from academy to first team, and also be available for hire outside of training hours thereby bringing in revenue and reducing operating costs. The stadium expansion would increase the value of the stadium and increase revenue by means of ticket sales.

I accept the club will have to repay the loans but each year the asset will be there and the loans or liability for the club will reduce as payments on the loans are made, much like PMG and the Premier Seating. In short the balance sheet will improve.

The matter of repaying historical debt and debt to equity conversion is a completely seperate issue and should not ,and in my opinion must not affect the chance of two fantastic capital projects which will be hugely beneficial to the club in the years to come.

Carl you know my opinion on the Langston issue and I will be crystal clear for others, I will never understand why VT and the club cannot see that sorting this issue now would be seen as such a massive act of good faith by the fans. Whatever the reason the club is missing a real opportunity here but what right do I or any of us have to spend VT's money. None.

Langston will get sorted, PMG and Ranson will get sorted and I believe VT will convert as much of the loans he as made to equity. Of that I have absolutely no doubt.

All I can say having read this board over the last few days is thank god we have a successful business man running the club and not the fans.

In VT we have a man with not only the financial resource to resolve our historical debt but a man of vision who can see the longterm benefits of capital investment in a training ground and stadium expansion.

Great post, any mods or annis reading this..........ANY CHANCE OF THIS BECOMING A STICKY????? (somehow i doubt it)

Don't think anyone is doubting they are a positive but a fair few are doubting whether it will actually happen until that point its all speculation.

Good post. Additionally, Malky is unhappy with the current training facilities; fans with big egos who think they know better than the manager? surely not?

Good post (again) CastleBlue and (again) I agree with all of it

I believe your thinking is going in the right direction. VT is asset building and getting the club ready for the FFP rules.

My view on Langston is much the same, except the reason they are not paying now is because they simply don't have to. The plan (according to VT's recent budget) is to pay up by May 2013 so why not have £10m (or even £7m) in your bank account for 11 months, rather than someone else's?

The debt to equity will happen but not until the £100m has been fully invested. That means the trainning ground has to be built and the stadium expansion also, which could take years.

This is a long term project which might involve us being sold on, once everything is completed.

i personally feel that they are preparing us to sell us on.. but what if we dont get to the prem in the next 2 yrs or so?? with a new training facility half built, stadium expansion plans still ongoing, they could then want to cash in on their equity, leaving us with yet again another huge debt

But that's the point isn't it ? I'm no expert but if the investment is transferred to equity it means that VT can only cash in if he finds a buyer. If he merely walks away then the club has no "debt" as such, VT merely retains the shares until he can get someone to buy them. He could wind up the club but would then face massive losses as our assets are much less than the £100m he will have invested.

I think Tony Blue Williams is right and that a lot of this to bring us to the point where the company balance sheet looks much more like that of a viable business

As long as the majority of this investment is turned to equity I just don't see how the club can lose on this

Good post (again) CastleBlue and (again) I agree with all of it

I believe your thinking is going in the right direction. VT is asset building and getting the club ready for the FFP rules.

My view on Langston is much the same, except the reason they are not paying now is because they simply don't have to. The plan (according to VT's recent budget) is to pay up by May 2013 so why not have £10m (or even £7m) in your bank account for 11 months, rather than someone else's?

The debt to equity will happen but not until the £100m has been fully invested. That means the trainning ground has to be built and the stadium expansion also, which could take years.

This is a long term project which might involve us being sold on, once everything is completed.

i personally feel that they are preparing us to sell us on.. but what if we dont get to the prem in the next 2 yrs or so?? with a new training facility half built, stadium expansion plans still ongoing, they could then want to cash in on their equity, leaving us with yet again another huge debt

But that's the point isn't it ? I'm no expert but if the investment is transferred to equity it means that VT can only cash in if he finds a buyer. If he merely walks away then the club has no "debt" as such, VT merely retains the shares until he can get someone to buy them. He could wind up the club but would then face massive losses as our assets are much less than the £100m he will have invested.

I think Tony Blue Williams is right and that a lot of this to bring us to the point where the company balance sheet looks much more like that of a viable business

As long as the majority of this investment is turned to equity I just don't see how the club can lose on this

surely turning the investment and converting the outstanding debts into equity is still a repayable amount at some stage.. just to a different person.. if he wishes to cash in on his shares where is the money going to come from ? he can walk away without us finding a buyer.. maybe im wrong.....

Top post again castleblue... what does CAPEX mean though and what are the 2 CAPEX projects?

Top post again castleblue... what does CAPEX mean though and what are the 2 CAPEX projects?

Capitol expenditures, it's mean spending money to create future benefits, the 2 are the creating of a training facility of our own, and increasing the stadium capacity to 35k

Top post again castleblue... what does CAPEX mean though and what are the 2 CAPEX projects?

Capitol expenditures, it's mean spending money to create future benefits, the 2 are the creating of a training facility of our own, and increasing the stadium capacity to 35k

Oh rite i got u mate, well yeh that is clearly the aim spending money to earn future benefits and financial rewards, thats how VT has made all his money after all so I think he knows what hes doing

Top post again castleblue... what does CAPEX mean though and what are the 2 CAPEX projects?

Capitol expenditures, it's mean spending money to create future benefits, the 2 are the creating of a training facility of our own, and increasing the stadium capacity to 35k

Thanks.

Top post again castleblue... what does CAPEX mean though and what are the 2 CAPEX projects?

Capitol expenditures, it's mean spending money to create future benefits, the 2 are the creating of a training facility of our own, and increasing the stadium capacity to 35k

Oh rite i got u mate, well yeh that is clearly the aim spending money to earn future benefits and financial rewards, thats how VT has made all his money after all so I think he knows what hes doing

football though is a different business,to casinos, hotels, social networking and food franchising etc.. they are not that difficult to pridict future turnovers etc...

lets say we have a poor season, the training ground and stadium expansion are still in plans, so nothing solid, the langston debt has yet to be settled in full and the malaysians decide that they want to leave... they have not actually put in 100mil so they could walk away writing off the cash injection at the start of this season "if that goes ahead" and the cash they have put in to keeping the club afloat..
we still have the debts outstanding, and are losing money each day.. the majority of the 100mil invest is mostly talk, if the debts get settled, if the training facility gets built and if the stadium gets expansion. for the later two we need to be in the prem league. the only thing to come out of it is our change of strip and badge and that has not really cost anything...

the only way i see a win win situation is if the money is put up front for improving the playing squad and getting us to the prem league..

yeah good post

Good post (again) CastleBlue and (again) I agree with all of it

I believe your thinking is going in the right direction. VT is asset building and getting the club ready for the FFP rules.

My view on Langston is much the same, except the reason they are not paying now is because they simply don't have to. The plan (according to VT's recent budget) is to pay up by May 2013 so why not have £10m (or even £7m) in your bank account for 11 months, rather than someone else's?

The debt to equity will happen but not until the £100m has been fully invested. That means the trainning ground has to be built and the stadium expansion also, which could take years.

This is a long term project which might involve us being sold on, once everything is completed.

i personally feel that they are preparing us to sell us on.. but what if we dont get to the prem in the next 2 yrs or so?? with a new training facility half built, stadium expansion plans still ongoing, they could then want to cash in on their equity, leaving us with yet again another huge debt

But that's the point isn't it ? I'm no expert but if the investment is transferred to equity it means that VT can only cash in if he finds a buyer. If he merely walks away then the club has no "debt" as such, VT merely retains the shares until he can get someone to buy them. He could wind up the club but would then face massive losses as our assets are much less than the £100m he will have invested.

I think Tony Blue Williams is right and that a lot of this to bring us to the point where the company balance sheet looks much more like that of a viable business

As long as the majority of this investment is turned to equity I just don't see how the club can lose on this

surely turning the investment and converting the outstanding debts into equity is still a repayable amount at some stage.. just to a different person.. if he wishes to cash in on his shares where is the money going to come from ? he can walk away without us finding a buyer.. maybe im wrong.....

As I say I'm no expert but if you buy shares in some company they are yours until you either sell or the company is wound up. In VTs case he would be a majority shareholder (owner) and therefore walking away, or winding-up, wouldn't be of any benefit for him because those shares are still his and the only way he can re-coup/make money would be to find a buyer for those shares or make the company profitable and tale a % of the profits (probably the most likely in a promoted football club !).

Perhaps someone with more accountancy knowledge could either confirm or put me in my place

I agree with Tony.

This Man is creating a business with a sales potential.

The club really has no value at the moment.
He's done everything and he see's this as an exciting project.

The RED is for the chinese - make no mistake about that.
It is probably one of the pre-sale conditions.

I'm a Blue Bluebird - don't like what football really is these days
But we could be in for a ride the likes that our club and us as fans have never seen.

The Cardiff Tapestry continues.......

Good post (again) CastleBlue and (again) I agree with all of it

I believe your thinking is going in the right direction. VT is asset building and getting the club ready for the FFP rules.

My view on Langston is much the same, except the reason they are not paying now is because they simply don't have to. The plan (according to VT's recent budget) is to pay up by May 2013 so why not have £10m (or even £7m) in your bank account for 11 months, rather than someone else's?

The debt to equity will happen but not until the £100m has been fully invested. That means the trainning ground has to be built and the stadium expansion also, which could take years.

This is a long term project which might involve us being sold on, once everything is completed.

i personally feel that they are preparing us to sell us on.. but what if we dont get to the prem in the next 2 yrs or so?? with a new training facility half built, stadium expansion plans still ongoing, they could then want to cash in on their equity, leaving us with yet again another huge debt

But that's the point isn't it ? I'm no expert but if the investment is transferred to equity it means that VT can only cash in if he finds a buyer. If he merely walks away then the club has no "debt" as such, VT merely retains the shares until he can get someone to buy them. He could wind up the club but would then face massive losses as our assets are much less than the £100m he will have invested.

I think Tony Blue Williams is right and that a lot of this to bring us to the point where the company balance sheet looks much more like that of a viable business

As long as the majority of this investment is turned to equity I just don't see how the club can lose on this

surely turning the investment and converting the outstanding debts into equity is still a repayable amount at some stage.. just to a different person.. if he wishes to cash in on his shares where is the money going to come from ? he can walk away without us finding a buyer.. maybe im wrong.....

As I say I'm no expert but if you buy shares in some company they are yours until you either sell or the company is wound up. In VTs case he would be a majority shareholder (owner) and therefore walking away, or winding-up, wouldn't be of any benefit for him because those shares are still his and the only way he can re-coup/make money would be to find a buyer for those shares or make the company profitable and tale a % of the profits (probably the most likely in a promoted football club !).

Perhaps someone with more accountancy knowledge could either confirm or put me in my place

your points make good sense..

Last night Carl posted this thread;

WORLD CLASS" is how the training facilities at Vale were described when it was officially opened on December 15th 2008.

Yes I would like us to have our own training ground that is owned by the club but why is there a need to spend £10million on something when we currently have "state of the art training facilities which are second to none".

It is one of the items on the agenda of Vincent Tan as part of the re-branding which baffles me, if we were still training on "dog shit park" then I could understand it better but do we need to do this right now ?

At a later date, when we are an established Premier League club and certainly a club with a better balance sheet than we currently have, I would be more for it but at this present time I don't understand the need to add £10million to our debt when we have facilities which are more than suitable.

I remember how well the then new training facilities were received by everyone at our club and no one can doubt when compared to "Dog Shit Park" a huge step forward for our club, but let's face it Ridsdale was never going to give it anything else other than the state of the art second to none stuff. As good as these facilities are they are in my opinion not state of the art and are actually second to quite a lot. But let's face it we are talking Ridsdale the man who gave us the Golden Ticket scam so who really believed the rhetoric?

Also these facilities are not owned by the club and do not appear on the list of assets on the club balance sheet. As I see these facilities are an operating cost, a liability which costs the club £200,000 each year. For that the club gets one training pitch is that good value for money and does it meet the needs of a club with a first team, Under 21team and of course the academy teams. We all know our club has the use of the university training fields together with it's own building at Treforest, but again not an asset and how much does that cost the club each year.

VT has proposed 2 new CAPEX projects the expansion of the stadium, as and when required, and a new training ground both of which will increase the fixed assets of the club and therefore have a very positive effect on the balance sheet. The club would have a new training ground, which could house all ages from academy to first team, and also be available for hire outside of training hours thereby bringing in revenue and reducing operating costs. The stadium expansion would increase the value of the stadium and increase revenue by means of ticket sales.

I accept the club will have to repay the loans but each year the asset will be there and the loans or liability for the club will reduce as payments on the loans are made, much like PMG and the Premier Seating. In short the balance sheet will improve.

The matter of repaying historical debt and debt to equity conversion is a completely seperate issue and should not ,and in my opinion must not affect the chance of two fantastic capital projects which will be hugely beneficial to the club in the years to come.

Carl you know my opinion on the Langston issue and I will be crystal clear for others, I will never understand why VT and the club cannot see that sorting this issue now would be seen as such a massive act of good faith by the fans. Whatever the reason the club is missing a real opportunity here but what right do I or any of us have to spend VT's money. None.

Langston will get sorted, PMG and Ranson will get sorted and I believe VT will convert as much of the loans he as made to equity. Of that I have absolutely no doubt.

All I can say having read this board over the last few days is thank god we have a successful business man running the club and not the fans.

In VT we have a man with not only the financial resource to resolve our historical debt but a man of vision who can see the longterm benefits of capital investment in a training ground and stadium expansion.

Good post (again) CastleBlue and (again) I agree with all of it

I believe your thinking is going in the right direction. VT is asset building and getting the club ready for the FFP rules.

My view on Langston is much the same, except the reason they are not paying now is because they simply don't have to. The plan (according to VT's recent budget) is to pay up by May 2013 so why not have £10m (or even £7m) in your bank account for 11 months, rather than someone else's?

The debt to equity will happen but not until the £100m has been fully invested. That means the trainning ground has to be built and the stadium expansion also, which could take years.

This is a long term project which might involve us being sold on, once everything is completed.

Thanks Tony I think we would both agree that any man who is looking to build assets and not strip them out is not all bad.

After reading VT statement last week I believe he is fully intent on delivering on his commitments because above all else I think these guys are men of dignity, integrity and honour.

All great stuff and everything, but can we play in blue?

A well written and very informative piece.

Great post.

Good post (again) CastleBlue and (again) I agree with all of it

I believe your thinking is going in the right direction. VT is asset building and getting the club ready for the FFP rules.

My view on Langston is much the same, except the reason they are not paying now is because they simply don't have to. The plan (according to VT's recent budget) is to pay up by May 2013 so why not have £10m (or even £7m) in your bank account for 11 months, rather than someone else's?

The debt to equity will happen but not until the £100m has been fully invested. That means the trainning ground has to be built and the stadium expansion also, which could take years.

This is a long term project which might involve us being sold on, once everything is completed.

Thanks Tony I think we would both agree that any man who is looking to build assets and not strip them out is not all bad.
After reading VT statement last week I believe he is fully intent on delivering on his commitments because above all else I think these guys are men of dignity, integrity and honour.

I believe Tan will deliver....and our wildest dreams will one day come true.
Great Posts.

Good post!

He will convert as much of the loans to equity as he can sell or mortgage the club assets for. Why would he convert any more? He will effectively still have security over the money he has lent. Any further debt to equity swaps will only happen as the value of the club increases and the only way this will happen is if we are in the premiership. So there will be a lot of secured debt unless we get promotion.