Debt

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There's been a lot of comments on here about the amount of debt we hold. Some equate it to no more than a mortgage (a bliddy big one mind) while some see it as the albatross around wor neck.

OK - let's look on the side of the albatross. What would happen of we were unable to maintain the debt. Who would take over the stadium? And more importantly, what would they do with it? It's hardly likely to be converted into a shopping mall (that's another Metro Centre for those of us who don't understand such grand things). Nor a housing complex. Let's face it, SJP is only good enough for one thing - and the way football is becomming more and more a business, some bu99er would buy it up at a knock doon price. And guess what - somebody like Lamar Hunt (BTW, is that rhyming slang for something??) would install another team.

So come on folks - get out of this dispair and support the team. This "thing" will be around for a long, long time to come. It could even become older than Jonno ;-)

-- Anonymous, May 06, 2001

Answers

Would a deeply discounted rights issue work? It would give the fans a chance to put in & have a say. More importantly it would be new money & adjust the gearing to relax the banks a little.

I must admit, with our current record of spotting a bargain, I'd be reluctant to chip in unless I could be sure it is spent wisely.

-- Anonymous, May 07, 2001


I think the following would happen Screach:

i) if the Toon got into difficulties meeting the repayment schedule they would initially seek to renegotiate the terms to reduce the annual payment and extend the term. As it is already a 17 year bond, the possibilities for extension are probably limited. In addition, any extension would almost certainly be done at a higher interest rate as the issuers would argue it was then a higher risk investment.

ii) if the Club were still unable to meet the repayments, the issuers would declare them in default of the terms of the bond, and recall the debt. Unless, the Club could then raise the cash required to pay this off - from whatever source, and a rights issue would be one possibility, although probably a remote one - the Club could ultimately be declared insolvent and be forced into liquidation.

If the Club was still in the PL and a going concern, I think it's probable that such an event would trigger a take-over of the Club - likely to be sponsored by the Bank holding the bond - with the present owners essentially forced to take a nominal price for their shares and asked to 'go forth & multiply'.
So, it might not be all bad, in fact poetic justice springs to mind!!

-- Anonymous, May 07, 2001


Calrky, I don't think we only want a take-over. It needs additionsl money not a reshuffleing of debt.

-- Anonymous, May 07, 2001

If the season ticket sales start to falter then we will be in difficulty. If they remain sold out then the debt is easily carried and the stadium expansion adds to our revenue after deducting interest.

Moneywise, we have been paying for the poor buys of TSM and Gullit. Robson is doing no better at present IMHO. There is plenty money coming into the club (2nd highest Premiership gates) although the absence from Europe and early FA cup exit means that we will not be rolling in spare cash this year. It's important to get back on the European gravy train to bring in the funds that will pay for top quality players, and unfortunately, because of the waste of the past 3-4 seasons we were not in a position to "speculate to accumulate".

We have good young players coming through, there should be money available this summer, and there is every chance of getting out of the terrible mediocrity of the past 4 seasons. Much depends on Robson's ability to spend more successfully than he has done so far and to get the lads playing as a team. I've been very disappointed with the form of the past 3 months or so and feel that YBR has much to answer for on this.

-- Anonymous, May 07, 2001

Does anyone else think that we're terrible at grooming youngsters? We seem to develop them to a point and then sell them. We seem unable to take them to the next level. We great at producing first division players like Elliot, Robinson, Clark, Thompson, Baherall etc. I don't really have much faith in the Caldwells coming good. Not because they can't - because WE can't. No doubt they'll get a few games under their belt and we'll sell to the first bidder. Bet we'd sell Hughes for a few million just to replace him with a player of similar ability and bad attitude.

-- Anonymous, May 07, 2001


On second thoughts, that was a seperate topic for discussion. I'll start a new thread for that one.

-- Anonymous, May 07, 2001

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