Club aims to raise £35m from bond (7 Viewers)

albatross

Well-Known Member
That would be very unusual . Every commercial lease I've ever had has reverted to the freeholder in the event of my company going into administration or any other insolvency event and has had restrictions preventing the lease being sold, even as part of the company the lease was initially sold to, without the freeholders permission.

I know CCC take some stick on here but even they can't be stupid enough not to have put such a clause in.


Even if you had paid the lease up front for the full term? If WASPS /ACL use the bond and have paid up in full then there can conceivably be a number of owners of ACL and their assets over the 250 yrs (even if the pay 1 pound for a distressed ACL) until the lease expires and it then reverts to CCC. I'm sure there will be some covenants upon usage etc.. but as long as they are observed that are probably not in default
 

chiefdave

Well-Known Member
Even if you had paid the lease up front for the full term? If WASPS /ACL use the bond and have paid up in full then there can conceivably be a number of owners of ACL and their assets over the 250 yrs (even if the pay 1 pound for a distressed ACL) until the lease expires and it then reverts to CCC. I'm sure there will be some covenants upon usage etc.. but as long as they are observed that are probably not in default

Even if its paid upfront it would be unusual for ownership to be able to change without the permission of the freeholder and for it to fall into the hands of an administrator rather than revert to the freeholder in the event of an insolvency event.
 

oldfiver

Well-Known Member
That would be very unusual . Every commercial lease I've ever had has reverted to the freeholder in the event of my company going into administration or any other insolvency event and has had restrictions preventing the lease being sold, even as part of the company the lease was initially sold to, without the freeholders permission.

I know CCC take some stick on here but even they can't be stupid enough not to have put such a clause in.

The receiver, liquidator may have rights to continue the lease for the purposes of either maintaining the business ( ACL) or to get the best possible value on sale. However, the purchaser still has to satisfy the Freeholder they are of good standing and suitable tenant. In the interim the Receiver is still liable for all rents, service charges etc in the period of his tenure.

I do not know but it is possible the 250 year extension was purely for WASPS and on a failure the lease reverts to the original ACL term. In which case its value dives
 
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chiefdave

Well-Known Member
In which case its value dives

I'm not convinced the valuation in the prospectus stands up to any scrutiny anyway. Given that they just purchased ACL and the lease extension for under £7m I'm struggling to see how its now worth enough to provide £35m security, let alone the amount they claim it has been valued at.
 

oldfiver

Well-Known Member
Even if you had paid the lease up front for the full term? If WASPS /ACL use the bond and have paid up in full then there can conceivably be a number of owners of ACL and their assets over the 250 yrs (even if the pay 1 pound for a distressed ACL) until the lease expires and it then reverts to CCC. I'm sure there will be some covenants upon usage etc.. but as long as they are observed that are probably not in default

It wont be just the rent - I am sure it is a full repair etc lease - imagine the Stadium in 10 years let alone 250 !
 

oldfiver

Well-Known Member
I'm not convinced the valuation in the prospectus stands up to any scrutiny anyway. Given that they just purchased ACL and the lease extension for under £7m I'm struggling to see how its now worth enough to provide £35m security, let alone the amount they claim it has been valued at.

It has to be a sale under value then unless WASPS can show, by them being there they bring the added value
 

chiefdave

Well-Known Member
It has to be a sale under value then unless WASPS can show, by them being there they bring the added value

Which again raises questions for CCC and Higgs to answer. Why did they sell it for that price if its market value is over £40m as is now being claimed. Even if Wasps add value, which is debateable they certainly won't add that much value.
 

torchomatic

Well-Known Member
Without being disrepectful and cheeky, OSB. You do just that with CCFC statements, etc. I think the phrase you tend to use is something like what the statement "isn't saying". Same here with the Wasps' bonds.

It is easy to pick on a few words in isolation. The prospectus , which is the legal offer document, makes clear what is on offer, what the risks are, what the security is and its current value, and what happens in the event of failure etc.
 

duffer

Well-Known Member
Here's the stuff from the prospectus relating to the lease (page 22 of 276). In essence CCC can claim back the lease if ACL goes pop. Though it's not black and white what happens in that circumstance, it's acknowledged as a risk in the second paragraph. In essence claiming in the media that the bonds are secured against the Ricoh Arena is not telling the whole story, imho.

Risks relating the head lease of the Arena granted to ACL2006
Under the terms of the head lease granted by Coventry City Council (“CCC”) to Arena Coventry (2006) Limited (“ACL2006”) in respect of the Arena (the “Head Lease”), CCC have reserved the right to forfeit the Head Lease if ACL2006 becomes insolvent. Insolvency in this scenario means a situation where ACL2006 becomes unable to pay its debts, has a receiver/administrator/provisional liquidator appointed over its assets, has assets seized in order to pay debts of ACL2006 or has a winding-up order made against it. The effect of forfeiture would be that the 250 year Head Lease would fall away and that ACL would then become the tenant of CCC at the Arena for the remaining 38 years of its existing lease. However, the right of CCC to claim forfeiture of the Head Lease is not an automatic right. If CCC made a claim for such forfeiture, this could be contested by ACL2006, any third party that held security over ACL2006 and any subtenants of ACL2006 by making application to a court in England. Further, if an administrator was to be appointed over the assets of ACL2006, then CCC would not be able to forfeit the Head Lease without the consent of the appointed administrator or with the leave of the courts.

If forfeiture was to take place prior to maturity of the Bonds, then U.S. Bank Trustees Limited, the entity that will hold the security on behalf of Bondholders, may not be in a position to assign the Head Lease for value in the event CCC forfeited the lease as described in the preceding paragraph. This may have an impact on the Bondholders’ ability to receive full repayment of their investment in the Bonds on the occurrence of such an insolvency event.
 

duffer

Well-Known Member
Which again raises questions for CCC and Higgs to answer. Why did they sell it for that price if its market value is over £40m as is now being claimed. Even if Wasps add value, which is debateable they certainly won't add that much value.

Again, from the prospectus. I read this a bit as Wasps saying "the valuation experts that we've paid for, find that the Arena leasehold is worth loads of money (please lend us some more so that we can pay something back to that bloke who keeps us running, and also keep our heads above water for the next few years)".

The valuation of the Arena given by Strutt & Parker for the long leasehold interest as at 23 April 2015 is £48,500,000. This is significantly higher than the valuation in the audited accounts of ACL (see Section 15 (Financial Statements – Annual report and accounts of Arena Coventry Limited for the financial years ended 31 May 2013 and 31 May 2014)) as the ACL accounts value the Arena purely at its historic cost less depreciation, whilst Strutt & Parker make assumptions as to future trading (i.e. Strutt & Parker give the market value)


This would seem to imply that CCC have sold at some way under 'market value'. Interesting.
 

James Smith

Well-Known Member
Which again raises questions for CCC and Higgs to answer. Why did they sell it for that price if its market value is over £40m as is now being claimed. Even if Wasps add value, which is debateable they certainly won't add that much value.

It is possible (and this is only my opinion if there are lawyers reading this) that the Higgs were only told about the deal for Wasps buying the council shares once it became necessary to do so, confidentially clauses and all that. Wasps according to Lucas approached the council first, not ACL and council were the only ones who could extend the lease. We were either still in Northampton or saying that we were coming back temporarily before the new stadium was built (depending on dates) when they were likely to have been told. The Higgs made no secret of being open to offers, just not many were forthcoming and obviously wanted out. So council tells Higgs they can get out now by selling to Wasps and they'll get some money back rather than waiting for Sisu or someone else. That, Wasps wanting 100%, the unconditional nature of the offer, a stand naming after them, plus a 40p per ticket donation for seats sold in their stand probably did it.

Probably very happy to see the back of the place given what's gone on.
 
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chiefdave

Well-Known Member
Could well be but would the charities commission not be slightly concerned at a charity selling a 50% share in an asset valued at £48.5m for less than £3m?
 

Captain Dart

Well-Known Member
what is really misleading about that? It is secured by all the assets of ACL which includes a 250 year long lease on the stadium plus certain assets of Wasps Holdings which includes their shares in ACL and the proceeds of any P share disposal. No one else can operate from the Ricoh without Wasps Holdings approval for the next 250 years can they?

I can't imagine Wasps holdings will exist in 250 years, nor CCFC.
 

James Smith

Well-Known Member
Could well be but would the charities commission not be slightly concerned at a charity selling a 50% share in an asset valued at £48.5m for less than £3m?

Very possibly, although once again we don't know the full details. And I should have put two faced hypocritical in front of council in that post.
 

Intheknow

New Member
Am I the only one who understands the Prospectus to be saying that the 250 year lease is not in ACL but in non-trading ACL 2006. If this is correct then any insolvency of ACL would not trigger a forfeiture to the Council?
 

chiefdave

Well-Known Member
Am I the only one who understands the Prospectus to be saying that the 250 year lease is not in ACL but in non-trading ACL 2006. If this is correct then any insolvency of ACL would not trigger a forfeiture to the Council?

So you're admitting Wasps have set up non-trading company to hold the only asset of value so that in the event of problems you can further screw everyone by selling to anyone who happens to flash a bit of cash. Sounds very similar to the setup SISU had and were universally criticised for.

Nice to see that in a few posts recently you've shown your true intentions and, I assume, those of Wasps. But I guess we're a few months in now so you don't need to pretend you give a shit about anyone but yourself now :jerkit:
 

oldfiver

Well-Known Member
Am I the only one who understands the Prospectus to be saying that the 250 year lease is not in ACL but in non-trading ACL 2006. If this is correct then any insolvency of ACL would not trigger a forfeiture to the Council?

As you seem to be at the centre of the hive - does this mean the lease has been granted to a company with no assets and no income?
 

oldfiver

Well-Known Member
So you're admitting Wasps have set up non-trading company to hold the only asset of value so that in the event of problems you can further screw everyone by selling to anyone who happens to flash a bit of cash. Sounds very similar to the setup SISU had and were universally criticised for.

Nice to see that in a few posts recently you've shown your true intentions and, I assume, those of Wasps. But I guess we're a few months in now so you don't need to pretend you give a shit about anyone but yourself now :jerkit:

Do they have the equivalent of a Queen Bee in a Wasp's nest?
 

Intheknow

New Member
So you're admitting Wasps have set up non-trading company to hold the only asset of value so that in the event of problems you can further screw everyone by selling to anyone who happens to flash a bit of cash. Sounds very similar to the setup SISU had and were universally criticised for.

Nice to see that in a few posts recently you've shown your true intentions and, I assume, those of Wasps. But I guess we're a few months in now so you don't need to pretend you give a shit about anyone but yourself now :jerkit:

Another example of ignorance. The Prospectus, on my understanding and from reading the JR papers, is that the property structure remains as put in place when the Ricoh was built.
 

Nick

Administrator
Another example of ignorance. The Prospectus, on my understanding and from reading the JR papers, is that the property structure remains as put in place when the Ricoh was built.

Ignorance, give it a rest. Maybe not everybody is in a position like you to know?
 

chiefdave

Well-Known Member
Another example of ignorance. The Prospectus, on my understanding and from reading the JR papers, is that the property structure remains as put in place when the Ricoh was built.

It doesn't really matter what the company structure was before does it? It matters what it is now as you're trying to raise £35m against it even though when you purchased it you didn't seem to think it was even worth £6m.

The fact remains that the setup is designed to allow you to screw over the city and our football club once again if your franchise plans fail. Exactly what I'd expect from an organisation like Wasps given the manner in which you have acted so far.
 

oldfiver

Well-Known Member
Another example of ignorance. The Prospectus, on my understanding and from reading the JR papers, is that the property structure remains as put in place when the Ricoh was built.

Well if you in the nest ... sorry know ... do not have a full understanding of the structure we mortals never will!
 

skybluetony176

Well-Known Member
The receiver, liquidator may have rights to continue the lease for the purposes of either maintaining the business ( ACL) or to get the best possible value on sale. However, the purchaser still has to satisfy the Freeholder they are of good standing and suitable tenant. In the interim the Receiver is still liable for all rents, service charges etc in the period of his tenure.

I do not know but it is possible the 250 year extension was purely for WASPS and on a failure the lease reverts to the original ACL term. In which case its value dives

I thought someone had said previously that if things go tits up the lease reverts back to CCC as the freeholder.
 

stupot07

Well-Known Member
well there goes any hope some of wasps going bust in the next few years and it shows the market thinks the deal ccc had was a great one (the loan, not the money they got from selling the stadium), they have a riskier deal than the council did for 5% a year less interest.

Don't forget though Noggin. £10m of that is going straight to Richardson, £13m + interests to pay back the loan, then with the remaining £5-8m they have to generate c£2m pa interest (I think that's what someone said earlier in this thread) to pay every one their annual interest.


Sent from my iPhone using Tapatalk - so please excuse any spelling or grammar errors :)
 

Noggin

New Member
Don't forget though Noggin. £10m of that is going straight to Richardson, £13m + interests to pay back the loan, then with the remaining £5-8m they have to generate c£2m pa interest (I think that's what someone said earlier in this thread) to pay every one their annual interest.


Sent from my iPhone using Tapatalk - so please excuse any spelling or grammar errors :)

Forgive me if I misread this but I'm sure the prospectus says that 3 years worth of interest payments to the bond holders will be ringfenced in it's own bank account. Yes they will have a big interest payment to pay each year about 2 mill, though the current interest payment to ccc is 1.4mill so the increase isn't great.

I can't see any chance of failure in the next 3 years and almost no chance in the next 7. At that point they will be fine as long as it's not very obvious that the move to Coventry has failed, if it has and they havn't built reasonable fan base they won't be able to refinance to pay back the bonds. Thats a long time to wait for ccfc though and if they are failing and need more money isn't a big rent increase for ccfc the first place to find it?

They have the stadium rights to sell shortly too, any forlorn hope that the wasps move would quickly end in tears is gone.
 

Noggin

New Member
actually I just read the prospectus and I was mistaken, it's 3 interest payments not 3 years. So 1 1/2 years, though they have to top it up, if after 2 years everything is going well they can close this account. going well meaning wasps debt isn't too high, the value of wasps/acl is above a certain level, the arena is worth above a certain amount and some other things. I don't fully understand it all to be honest it's page 9 and 10 if you wish to read it.
 

chiefdave

Well-Known Member
Well I was hopeful, given how glaring obvious some of the questions needing to be asked were, that our local media would get on the case. Seems I'm going to be disappointed as a few days on and we've heard nothing.

Seems Simon is now back at work and from todays story in the CT it seems local councils have to supply minutes of private meetings under FOI.

Hopefully now we'll finally see some questioning from the CT of the Wasps deal to purchase ACL in particular the questions that have been raised as a result of details contained in the Wasps prospectus.
 

Grendel

Well-Known Member
well there goes any hope some of wasps going bust in the next few years and it shows the market thinks the deal ccc had was a great one (the loan, not the money they got from selling the stadium), they have a riskier deal than the council did for 5% a year less interest.

Any investment bears no relation to the council loan. An absurd statement.

Equally absurd is the notion that this prevents AcL from going bust.

- we don't know who purchased these bonds
- we do know £10 million is being paid to Richardson
- we don't know that acl are actually going to not still have the loan. It's very possible they will still be paying the loan back with Moonstone as the new creditor.
 

chiefdave

Well-Known Member
Nice bunch the wasps fans...

The 'we've done nothing wrong and it won't hurt anyone else' line of thought is bizarre. Using their own reasons for purchasing ACL they have made it virtually impossible for CCFC to reach a decent level of success and its madness to suggest that having a top tier rugby team in the city is not going to impact on CRFC.

You'd think that having nearly gone out of business and having been in a groundshare situation themselves they would have more of an understanding but it just seems to be we're fine screw everyone else.
 

duffer

Well-Known Member
The 'we've done nothing wrong and it won't hurt anyone else' line of thought is bizarre. Using their own reasons for purchasing ACL they have made it virtually impossible for CCFC to reach a decent level of success and its madness to suggest that having a top tier rugby team in the city is not going to impact on CRFC.

You'd think that having nearly gone out of business and having been in a groundshare situation themselves they would have more of an understanding but it just seems to be we're fine screw everyone else.

I don't think they're all like that for a moment, but they've got to justify it to themselves somehow.

They've ignored two key facts that I can see - they had other options to stay in and around London, and they've proposed moving their fixtures to Saturdays (thus impinging even further on CRFC). This isn't an outfit that gives a toss about anything other than their own success - that's fair enough, but it's pathetic trying to paint it as anything else.
 

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