Details of Wasps' Ricoh Arena deal with council revealed

Discussion in 'Coventry City General Chat' started by SimonGilbert, Feb 5, 2015.

  1. SimonGilbert

    SimonGilbert Telegraph Tea Boy

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  2. Bertola

    Bertola Active Member

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    I thought the key to any deal was the development of the surrounding land? Isnt that what we were told?
     
  3. oldskyblue58

    oldskyblue58 CCFC Finance Director

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  4. skybluetony176

    skybluetony176 Well-Known Member

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    For the benefit of clarity OSB how does that 11.35% compare to the interest on the original bank loan that CCC took over?
     
  5. lordsummerisle

    lordsummerisle Well-Known Member

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    Didn't think you were interested Tony?
     
  6. tisza

    tisza Well-Known Member

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    1. it is interesting against the original acl rent fee of 1.9m per year.
    2. surprising that Wasps can't refinance this loan at a better rate with a commercial lender. ir may be that is their intention.
     
  7. Noggin

    Noggin New Member

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    If thats true thats really bad news for sisu and their second JR, that makes the councils decision to sell a much better decision financially.
     
  8. skybluetony176

    skybluetony176 Well-Known Member

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    Just joining the club. This clearly ain't going away.

    Besides are you not interested to know if they could get a more competitive commercial loan and then use this to pay off the council loan? That's the angle I'm coming from.
     
  9. Terry Gibson's perm

    Terry Gibson's perm Well-Known Member

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    In the surrounding land is there space to squeeze in a 10k seater stadium?

    I wonder who the other sports company were?
     
  10. Noggin

    Noggin New Member

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    If they can that removes the risk (though also the profit depending on what the early repayment penalties are) completely from the council and if they can't that shows even further why ccfc building a stadium is a complete non starter.
     
  11. Senior Vick from Alicante

    Senior Vick from Alicante Well-Known Member

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    For me the two over riding conclusions are A, The council look like they have acted in the best interest of getting the loan repaid in half the time while still earning the same amount for the public purse and B, I wish our owners had the same forethought as the owners of Wasps to do the deal in the first place. Plain fact from the councils point of view is that they probably thought they had no chance of doing a deal with Sisu because of their actions and conduct. I would like to see where Les Reid will find the new smoking gun now or will hell freeze over first? PUSB
     
  12. fernandopartridge

    fernandopartridge Well-Known Member

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    Can't really disagree with Fisher in saying he wouldn't want to buy into that. It might not help a state aid case but would surely give rise to SISU sitting tight for a while yet.
     
  13. fernandopartridge

    fernandopartridge Well-Known Member

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    Do a deal to effectively increase the rent outgoing to £1.7m all because of the council making a complete hash of its loans to ACL from day one?
     
  14. oldskyblue58

    oldskyblue58 CCFC Finance Director

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    The Yorkshire Bank loan was at a rate of 1.265% above Libor but they also hedged the interest rate so it is not a straightforward calculation. Overall it looks like the rate was something like 6.6% (done by taking interest as a percentage of the average loan outstanding) but that's very rough and ready so I wouldn't swear to it
     
  15. fernandopartridge

    fernandopartridge Well-Known Member

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    ACL paid £21m up front financed by a mortgage from Yorkshire Bank rather than playing £1.9m for 50 years.
     
  16. Senior Vick from Alicante

    Senior Vick from Alicante Well-Known Member

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    How do you work that out, Sisu were originally offered a deal over a longer period plus you would get the benefits of the associated income streams or am I missing something?
     
  17. Terry Gibson's perm

    Terry Gibson's perm Well-Known Member

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    Would be interesting to see the state of The Ricoh in 250 years time it already looks like a dump and was finished in a rush.
     
  18. tisza

    tisza Well-Known Member

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    the point was that the original 1.9m was to allow the council to pay the loan.acl then took out the loan to pay the lump sum which was reportedly costing them 1.7m per year with a commercial lender. now the acl is still at 1.7m a year over slightly longer time frame with the council acting as the lender. somewhere diwn the line isn't acl worse off now than it was 2 years ago particularly as it has also had to pay a lump sum of 1 million?
     
  19. italiahorse

    italiahorse Well-Known Member

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    In addition, “super rent” was payable, based on ACL’s net profit before tax, of 10% on profits over £3.75m rising to 50% of profits over £7.75m.

    The detail in the deal I would like to know is does this still apply or was this subject to one of the modifications ?
     
  20. italiahorse

    italiahorse Well-Known Member

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    Really ?
     
  21. duffer

    duffer Well-Known Member

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    Straight question: What happens to the loan if Wasps subsequently goes bust?

    The council said that they wouldn't risk taxpayers' money by making loans to loss making operations, but as it turns out they did in both the original deal to ACL, and seemingly now again in this refinancing.

    Maybe the reason Wasps have taken this loan on from the council is that they cannot obtain third-party finance to the tune of £14.4m given what a poor risk their business represents. It's a bit early to claim this is a good deal for the council, I'd say, especially if they're going to be on the hook if Wasps go bust.
     
  22. skybluebeduff

    skybluebeduff Well-Known Member

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    Needs a lick of paint, you can see rust.

    Thats how they do it with the club too, paint over rust.
     
  23. skybluetony176

    skybluetony176 Well-Known Member

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    When you say "sitting tight for a while" do you mean sitting tight for 250years?
     
  24. skybluetony176

    skybluetony176 Well-Known Member

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    Thanks OSB.

    So why wouldn't Wasps go out and get a commercial loan over a longer period of time, end up still paying the same amount but over a longer period reducing their annual overheads? Surely a 250year lease is good security to obtain a loan? I can't really see why they wouldn't take that route.

    That's an open question by the way. Not specifically aimed at OSB.
     
  25. Noggin

    Noggin New Member

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    ccc will be the main creditor and likely end up with the lease back to sell again.

    We might not fully know if it's a good deal for the council but we do know it's a massive massive improvement over what the loan was previously and if it isn't considered a good deal it shows again how ccfc building their own stadium is simply not going to happen. Because the risk of lending to that is probably an order of magnitude higher and so will come with a significantly higher interest rate. I know I've said this before but a family member loans to a developer at 20% and it's secured (kinda anyway) and that project is way less risky than lending to sisu.
     
  26. fernandopartridge

    fernandopartridge Well-Known Member

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    SISU weren't offered any deal over a longer period. They certainly were never offered a 250 year lease.
     
  27. fernandopartridge

    fernandopartridge Well-Known Member

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    Yes, Joy Seppalla V will be in post by then
     
  28. fernandopartridge

    fernandopartridge Well-Known Member

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    That's a good question
     
  29. wingy

    wingy Well-Known Member

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    Not sure If my maths are accurate
    The best rent offer to the Club while maintaining the Status Quo was £400k
    Possibly in Itself stressing ACL at that level

    We are now paying circa £100k
    Unless Wasps invigorate ACL to become far more successful in its secondary operations
    we may find ourselves facing a rent hike or homeless as I can't see them subsidising us at their own expense
     
  30. Noggin

    Noggin New Member

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    Thats not how it works, the longer you borrow over the more you pay back. If 10% interest is the commercial rate for this risk then it's likely going to be 10% at 20 years or 40. The council had obviously done a good deal for ACL to protect them due to them owning half of it but wanted to renegotiate the loan to something more commercially viable when they no longer had a stake. Sisu say this means the original loan is stateaid because it's better than a commercial rate but the judge clearly didn't agree because he thinks its reasonable that another company would have done the same in the councils position.

    unless of course OSB disagrees with me then you should assume I'm wrong :p
     
  31. Terry Gibson's perm

    Terry Gibson's perm Well-Known Member

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    It looks shabby there is a lot of rust and is still unfinished in places like as you come up the steps from the a444 mud with weeds growing through and there has been a leak on the front that has been there since it opened (used to drive me mad but now I don't care). Inside it was finished on the cheap so is freezing cold and now all these awful looking signs are appearing trying to some how justify the egg chasers being there. Having said all of this I would be happy if it was ours (not Sisu's).
     
  32. fernandopartridge

    fernandopartridge Well-Known Member

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    Indeed. We don't know how Wasps raised the other £5m to purchase the lease or how they turn around £3m losses. Neither do we know how they repay loans from Richardson.

    Do we foresee another rent strike in the event that the rent is increased?
     
  33. tisza

    tisza Well-Known Member

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    no paying the lease premium removed all rental obligations. that was in some council minutes i found years ago.
     
  34. wingy

    wingy Well-Known Member

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    Interesting, never knew that
     
  35. wingy

    wingy Well-Known Member

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    Back to Sixfields
    Everybody happy:mad:
     

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