Re:RBS Loan

[HBenn]

With all the stuff that is going on with the Rhone Group is my understanding correct that if the Rhone Group/interested party pays £100M and that then goes towards the loan, RBS will then provide us more money to build the stadium? Or will that finance have to come from another bank?

[TaksimRakiClub]

The £100m is just to get RBS off our back this summer.

 

Its not fresh investment but in effect just a balance transfer. Instead of owing RBS £237m we'll owe them £137m and the Rhone Group £100m.

 

The stadium will not be on the agenda until new investment comes into the club. In addition no bank will ever fund an entire project of this nature. With the current squeeze on credit I reckon the banks would only be willing to put up about 60% meaning that 40% of the total cost of the new stadium would need to be pledged before anyone in the financial sector will look at it.

[zigackly]

Its not fresh investment but in effect just a balance transfer. Instead of owing RBS £237m we'll owe them £137m and the Rhone Group £100m.

 

Surely it's not quite that simple if they take equity for the £100M: they would have to sell their share to recoup their investment wouldn't they?

[Barrington Womble]

The £100m is just to get RBS off our back this summer.

 

Its not fresh investment but in effect just a balance transfer. Instead of owing RBS £237m we'll owe them £137m and the Rhone Group £100m.

 

The stadium will not be on the agenda until new investment comes into the club. In addition no bank will ever fund an entire project of this nature. With the current squeeze on credit I reckon the banks would only be willing to put up about 60% meaning that 40% of the total cost of the new stadium would need to be pledged before anyone in the financial sector will look at it.

 

I don't think that is correct. The bid from Rhone is for newly issued equity as far as I understood it. The cunts will be their partners, not customers.

[Chinandeler Bong]

To access a longer refinance deal with RBS this money has to be paid.

We will then have a refinance deal that runs for a much longer period bringing down the interest payments BUT then they will hope to ask for a bigger loan to try and fund the stadium , use the stadium income / sponsorship as security against that loan ,which will probably be around 400M bucks and so on and so forth . .

 

In other words 'we be fucked'

[The Party Boy]

What's the chances of this mythical 100 million not being found but RBS cave in and give them another year and we limp on?

[Dan Vito Corleone]

Supposedly this £100m Rhone business is drawing to a close shortly.

[BolshieBastard]

The £100m is just to get RBS off our back this summer.

 

Its not fresh investment but in effect just a balance transfer. Instead of owing RBS £237m we'll owe them £137m and the Rhone Group £100m.

 

The stadium will not be on the agenda until new investment comes into the club. In addition no bank will ever fund an entire project of this nature. With the current squeeze on credit I reckon the banks would only be willing to put up about 60% meaning that 40% of the total cost of the new stadium would need to be pledged before anyone in the financial sector will look at it.

 

Sorry but if the rhone group buy in goes ahead its not correct to say we'll owe them £100m. They would be buying equity in the club ie they'd own x% of the club for the 100m.

[Hermes]

Sorry but if the rhone group buy in goes ahead its not correct to say we'll owe them £100m. They would be buying equity in the club ie they'd own x% of the club for the 100m.

 

Correct.

[Chinandeler Bong]

Supposedly this £100m Rhone business is drawing to a close shortly.

 

Can I ask if thats close to being a done deal or close to going tits ?

 

Ive asked that and either way ots tits for us fans.

[TaksimRakiClub]

Sorry but if the rhone group buy in goes ahead its not correct to say we'll owe them £100m. They would be buying equity in the club ie they'd own x% of the club for the 100m.

 

I know what you're saying - £100m goes to Kop Holdings for 40% of the club then Kop Holdings uses the money to reduce the debt with RBS.

 

However I'll believe it when I see it.

 

Until evidence is available to the contrary I believe Hicks is going to continue down the leverage route. I could be wrong on this but I think that's the model the Glazers used at United - getting replacement finance at higher and higher interest rates.

 

Rhone are going to want an immediate return on their investment or do you think they raising £100m in these difficult times for the love of the club and the hope that one day this mythical stadium will be built?

 

Maybe Hicks has had a "road to Damascus" moment and now thinks the way to take the club forward is to invest in it rather than rape it. Maybe pigs will grow wings and fly.

 

If thats the case and our debt only totals £137m come the end of July I'll happily admit to talking shite but until that point I think its naive to believe anything coming out of the PR machine at Liverpool.

[Kennys_spell]

I know what you're saying - £100m goes to Kop Holdings for 40% of the club then Kop Holdings uses the money to reduce the debt with RBS.

 

However I'll believe it when I see it.

 

Until evidence is available to the contrary I believe Hicks is going to continue down the leverage route.

 

Isn't the evidence already there for this - Didn't purslow tell SOS that RBS are demanding investment (not just the pay down of the debt by £100). So (I believe from reading the transcriipt put out by SOS) RBS have recognised the need for different owners and have forced their hand by demanding £100 Mill paydown.

 

That's my reading of it anyway.

[Sangria]

Isn't the evidence already there for this - Didn't purslow tell SOS that RBS are demanding investment (not just the pay down of the debt by £100). So (I believe from reading the transcriipt put out by SOS) RBS have recognised the need for different owners and have forced their hand by demanding £100 Mill paydown.

 

That's my reading of it anyway.

 

The bit about the loan I agree with, the money has to come in cash not another loan. That is my understanding of it.

As regards the ownership issue I do not think RBS want the hassle the two owners have brought them but they will not pull the rug from under them, if they get the 100m, that is only my opinion on what I have read.

 

In an ideal world someone would come in an buy the club and they could be done with it but in the current climate I do not see that happening and we have heard no whispers of it happening.

 

I still cannot work out what Rhone are up to, it does not add up to me. It is not their normal business plan and something does not sit right but what it is I have no idea.

[piscinin]

The bit about the loan I agree with, the money has to come in cash not another loan. That is my understanding of it.

As regards the ownership issue I do not think RBS want the hassle the two owners have brought them but they will not pull the rug from under them, if they get the 100m, that is only my opinion on what I have read.

 

In an ideal world someone would come in an buy the club and they could be done with it but in the current climate I do not see that happening and we have heard no whispers of it happening.

 

I still cannot work out what Rhone are up to, it does not add up to me. It is not their normal business plan and something does not sit right but what it is I have no idea.

 

What doesn't add up? The stadium will add 55m revenue a year, 25m profit. They want part of that. It seems pretty basic to me.

[Sangria]

What doesn't add up? The stadium will add 55m revenue a year, 25m profit. They want part of that. It seems pretty basic to me.

 

I mean that it is a bit long term and usually investors want yearly returns. Whilst the stadium is getting built we will be drawing down money and paying interest on that.

It is alright saying it in the terms you laid out above but is not as simple as that.

To be honest it is hard for me to argue because I have no idea of the terms etc of this deal, if it goes through.

 

One thing is good is it would bring the debt down to 137m, we would get a longer term finance and at a better rate. It would massively cut our interest repayments, stadium or no stadium.

 

One step at a time. Finance then stadium, fucking hell sounding like Purslow here.

[Kennys_spell]

I mean that it is a bit long term and usually investors want yearly returns.

 

Rhone are an equity investment company - they invest other peoples money and skim a percentage for their own profits. Equity Investment companies almost ALWAYS invest for the long term benefit. This sort of investment, for a 40% return of £25 Mill would be exactly the sort of thing they would do. No Good for LFC though as all of that 40% would be distributed to the investors of Rhone.

[piscinin]

I mean that it is a bit long term and usually investors want yearly returns. Whilst the stadium is getting built we will be drawing down money and paying interest on that.

It is alright saying it in the terms you laid out above but is not as simple as that.

To be honest it is hard for me to argue because I have no idea of the terms etc of this deal, if it goes through.

 

One thing is good is it would bring the debt down to 137m, we would get a longer term finance and at a better rate. It would massively cut our interest repayments, stadium or no stadium.

 

One step at a time. Finance then stadium, fucking hell sounding like Purslow here.

 

Why is there the expectation that they want a short-term return? Just look at the people that have sniffed around us. DIC - were looking for a return in 7 years (based on their exit plan). H&G clearly were looking for a return after the stadium was built. Why not the Rhone group too? Diversified portfolios always have medium and long term investments.

[Sangria]

Why is there the expectation that they want a short-term return? Just look at the people that have sniffed around us. DIC - were looking for a return in 7 years (based on their exit plan). H&G clearly were looking for a return after the stadium was built. Why not the Rhone group too? Diversified portfolios always have medium and long term investments.

 

I think all companies have exit strategies and DIC were no different. I guess I would have preferred some one different to come in than an investment company but I suppose that is the way the game is now, unless you hit the jackpot.

 

One thing is they have to invest in the team or the whole thing fails. Al has said the plans are back out on the table again so, we may finally see that started.

 

They are also putting real money in, which will put us decent financial footing.

 

Basically I was probably hoping for too much.

[piscinin]

I think all companies have exit strategies and DIC were no different. I guess I would have preferred some one different to come in than an investment company but I suppose that is the way the game is now, unless you hit the jackpot.

 

One thing is they have to invest in the team or the whole thing fails. Al has said the plans are back out on the table again so, we may finally see that started.

 

They are also putting real money in, which will put us decent financial footing.

 

Basically I was probably hoping for too much.

 

It's sad I know but in a lot of senses you have to stop thinking of us as a football club and start thinking of us as a "financial instrument" because that's what we are now :(

[aws]

What's the chances of this mythical 100 million not being found but RBS cave in and give them another year and we limp on?

 

Fair to middling.

[Kennys_spell]

 

 

They are also putting real money in, which will put us decent financial footing.

 

 

As far as I can work out they're not putting any decent money into the club - albeit they are purchasing a percentage of the club for approx £110 Mill but that will go to RBS/Wachovia to pay the debt down. It will have a knock on effect of paying less in interest rates over a longer period of time but that's all.

[piscinin]

As far as I can work out they're not putting any decent money into the club - albeit they are purchasing a percentage of the club for approx £110 Mill but that will go to RBS/Wachovia to pay the debt down. It will have a knock on effect of paying less in interest rates over a longer period of time but that's all.

 

There's another aspect to the deal though, at least as Purslow explained it. In addition to the 100+m the buyer has to be able to provide personal guarantees to secure the construction loan too.

[Kennys_spell]

 

The deal isn't just about the 100m, the buyer has to be able to provide personal guarantees to support that construction loan as well

 

I didn't know that was a stipulation - in that case I'm even more convinced that this is a stalking horse plan.

[piscinin]

 

 

 

I didn't know that was a stipulation - in that case I'm even more convinced that this is a stalking horse plan.

 

What do you mean by stalking horse? It's fake, or just letting everyone else know there's a real bid and unless you're going to match it, you're out of the running?

[zigackly]

As far as I can work out they're not putting any decent money into the club - albeit they are purchasing a percentage of the club for approx £110 Mill but that will go to RBS/Wachovia to pay the debt down. It will have a knock on effect of paying less in interest rates over a longer period of time but that's all.

 

It's hard to say what they will be prepared to put in to realise their investment once they own 40%. They could hardly put in less than the two frauds we have now. I imagine there will be an element of underwriting loans at the very least, and hopefully a bit for transfers. If they get us to the stage where the stadium is built, or even started, and we're still a going concern then they stand to much more than double their money. Not holding out any great hopes here, but I think there will be some improvement in our liquidity.