oldskyblue58
CCFC Finance Director
apparently this has all been simplified for the club so what could be going on
SBS&L Group
First off banish all thoughts of £60m or £70m debts/investment. That is all to do with internal debt between the group members. What is actually important and tells you the real debt are the external 3rd Party debts. 31st May 2012 the liabilities of the group of £42,780,404 were made up of
owed to SISU Fund investors £28,554,706
owed to ARVO by CCFC H £6,275,000
owed to ARVO by Otium £ 1,750,814
Accruals, tax and deferred income £ 6,199,842
That gives" investment" by SISU/ARVO at 31/05/12 = £36,580,520. I think the original investment included amounts of £6m that were never paid as we didnt make the Premiership and £1m for the purchase of the option fee by SBS&L that still sits in CCFC Ltd (in liquidation). If true that puts cash investment at 29m not an insignificant sum but not £60m
Since then there may have been additional funding but not enough to support the claim of £60m i would guess.
SBS&L - the individual company
This is the company that owes £28.5m to the SISU funds. It has no real assets itself other than the shares it owns in CCFC H Ltd and Otium. Therefore unless it can make its investments successful it has a large debt with no way to repay it. It is effectively a shell holding company but it is where most of the group debts lays. Between 31st May 2011 and 31st May 2012 the debt to the funds reduced by £1,125,236.
Monies it has lent to CCFC H have been written down to nil value each year. That doesnt mean they are not owed but simply they are unlikely to be repaid and the accounts reflect that.
the total borrowings have changed very little from 2011 to 2012 and remain at £38m. What has changed is that more is now owed to ARVO and incurs interest at an undisclosed rate. Interest total charged in 2012 year end was £1.26m. That means with each ARVO loan the clubs annual costs go up
CCFC Ltd
As we all know now in liquidation with huge debts. More importantly it owned the old lease at the Ricoh which is now effectively broken. At one point the players were reflected as assets in this company. Those players were transferred to CCFC H at some point. Pure guess but when contracts came up for renewal (ie had no value) they were re registered in CCFC H, new players were registered in CCFC H any way.... and CCFC Ltd ended up with no player contracts. But who knows I doubt it will ever be made clear in any definitive way. All rights to assets in this company have been sold to Otium for £1.5m. The Golden share taken way and given to Otium. As we all know none of the liabilities that CCFC Ltd owe are likely to be repaid by the company. But keep in mind most of the debt was internal to the group or clever uses of security charges. The real debt still exists in full in the SBS&L Group. CCFC Ltd has no value to the Group, and some large liabilities will disappear when liquidated
CCFC H
Up until 02/08/13 CCFC H ran the football club it owned the players, fixtures, trademark, and Ryton. It had large internal group debts to SBS&L, £2m owed to Otium and owed ARVO £6.275m. We are told that all assets now belong to Otium. CCFC H is to be wound up in December - but to do that it has to have settled its debts, something that must already have happened because the charges ARVO & SBS&L had over CCFC H have been removed. The debt to SBS&L is internal and financed by the SISU funds, which we know are happily intact in full sitting in SBS&L - so writing off the CCFC H debts to SBS&L will cost ? nothing they have already been written down to nil by SBS&L every year in any case. The ARVO debt is different and that is where Otium comes in. CCFC H is now a shell company and worthless but it also has no debts left to pay
OTIUM
This company was formed by SISU and originally funded by £2m from ARVO (who also own 9% of the shares). The £2m was lent by Otium to CCFC H but in the books of Otium written down to nil value. So it seems 31/05/12 another company with large debt no assets. Since that time Otium have received a further 9.1m from ARVO in loans of differing sorts. Would Otium have needed that funding before 31/05/13? no it wasnt trading. Do we know anything the SBS&L Group of companies could have bought for £9.1m? were losses that great in the final season at the Ricoh given rent wasnt paid, the escrow account used up, wage bill dropped routine maintenance not carried out and income holding firm when the cup runs were entered in to the equation. The aim is to run on a balanced budget - match day income wont do it at Sixfields but there are other ways to get income and player sales will be one
What I think has happened is that Otium have used the money to firstly buy the rights to any assets in CCFC Ltd for £1.5m. Secondly they have bought from CCFC H the assets it owned (Ryton, equipment, trademark, players, any goodwill, debtors, stock etc etc). Now they can choose any value they like on all that but would seem logical to choose a figure that pays off the loans CCFC H had from Otium plus the loan from ARVO £6.275m. After potential funding since 31/05/12 call it all £10m. The neat thing about that is ARVO loan Otium 9.1m part of which £6.275m they get straight back when Otium buys the CCFC H assets which were all charged to ARVO in the first place. In addition Otium have bought the rights to rates refunds, transfer monies still due on previous sales, compensation and prize monies due but withheld by the league etc - there is cash flow coming
This leaves Otium with loans to ARVO of 11.1m but assets bought from other group companies 11.5m (CCFC LTd 1.5m CCFC H 10m). The original CCFC companies now disappear. At 31/05/12 the Group balance sheet disclosed net liabilities at £38m. What it might look like now is
Assets in Otium 11.5m
Liabilities to ARVO 11.1m
Current assets 3.0m
curr liabilities 3.0m
Loans from SISU funds 28.8m (these loans are parked in SBS&L, they dont have to repay infull or at all, they can use SBS&L in other projects and recoup losses/value)
value of Group debt 28.4m instant improvement
go a step further and just look at the value of the football operation
Assets 11.5m
ARVO (11.1m)
Current assets 3.0m
Curr. Liabilities (3.0m)
represented by
shares issues 0.5m
Reserves (0.1m)
Worth of the football operation balance sheet is on that basis 0.4m .............. bit different to a football club with a balance sheet £50m, £60m £70m in debt.
This is about adding value, not the revenue losses. Makes the club more attractive to investors or easier to sell. Add to it a ground and that makes an interesting proposition doesnt it? In fact would that encourage finance to buy the Ricoh or a new ground? Then add to it rising values of playing staff, a premium to be added by being in Championship if promoted etc etc etc
All guess work I know but I wonder if it will be far off the mark. There has to be a reason or rhyme to their planning or stance. It isnt, I feel, about revenue losses it is about adding value in what ever way they can including clever accounting. Not sure they are in a hurry or as pressured as some think
SBS&L Group
First off banish all thoughts of £60m or £70m debts/investment. That is all to do with internal debt between the group members. What is actually important and tells you the real debt are the external 3rd Party debts. 31st May 2012 the liabilities of the group of £42,780,404 were made up of
owed to SISU Fund investors £28,554,706
owed to ARVO by CCFC H £6,275,000
owed to ARVO by Otium £ 1,750,814
Accruals, tax and deferred income £ 6,199,842
That gives" investment" by SISU/ARVO at 31/05/12 = £36,580,520. I think the original investment included amounts of £6m that were never paid as we didnt make the Premiership and £1m for the purchase of the option fee by SBS&L that still sits in CCFC Ltd (in liquidation). If true that puts cash investment at 29m not an insignificant sum but not £60m
Since then there may have been additional funding but not enough to support the claim of £60m i would guess.
SBS&L - the individual company
This is the company that owes £28.5m to the SISU funds. It has no real assets itself other than the shares it owns in CCFC H Ltd and Otium. Therefore unless it can make its investments successful it has a large debt with no way to repay it. It is effectively a shell holding company but it is where most of the group debts lays. Between 31st May 2011 and 31st May 2012 the debt to the funds reduced by £1,125,236.
Monies it has lent to CCFC H have been written down to nil value each year. That doesnt mean they are not owed but simply they are unlikely to be repaid and the accounts reflect that.
the total borrowings have changed very little from 2011 to 2012 and remain at £38m. What has changed is that more is now owed to ARVO and incurs interest at an undisclosed rate. Interest total charged in 2012 year end was £1.26m. That means with each ARVO loan the clubs annual costs go up
CCFC Ltd
As we all know now in liquidation with huge debts. More importantly it owned the old lease at the Ricoh which is now effectively broken. At one point the players were reflected as assets in this company. Those players were transferred to CCFC H at some point. Pure guess but when contracts came up for renewal (ie had no value) they were re registered in CCFC H, new players were registered in CCFC H any way.... and CCFC Ltd ended up with no player contracts. But who knows I doubt it will ever be made clear in any definitive way. All rights to assets in this company have been sold to Otium for £1.5m. The Golden share taken way and given to Otium. As we all know none of the liabilities that CCFC Ltd owe are likely to be repaid by the company. But keep in mind most of the debt was internal to the group or clever uses of security charges. The real debt still exists in full in the SBS&L Group. CCFC Ltd has no value to the Group, and some large liabilities will disappear when liquidated
CCFC H
Up until 02/08/13 CCFC H ran the football club it owned the players, fixtures, trademark, and Ryton. It had large internal group debts to SBS&L, £2m owed to Otium and owed ARVO £6.275m. We are told that all assets now belong to Otium. CCFC H is to be wound up in December - but to do that it has to have settled its debts, something that must already have happened because the charges ARVO & SBS&L had over CCFC H have been removed. The debt to SBS&L is internal and financed by the SISU funds, which we know are happily intact in full sitting in SBS&L - so writing off the CCFC H debts to SBS&L will cost ? nothing they have already been written down to nil by SBS&L every year in any case. The ARVO debt is different and that is where Otium comes in. CCFC H is now a shell company and worthless but it also has no debts left to pay
OTIUM
This company was formed by SISU and originally funded by £2m from ARVO (who also own 9% of the shares). The £2m was lent by Otium to CCFC H but in the books of Otium written down to nil value. So it seems 31/05/12 another company with large debt no assets. Since that time Otium have received a further 9.1m from ARVO in loans of differing sorts. Would Otium have needed that funding before 31/05/13? no it wasnt trading. Do we know anything the SBS&L Group of companies could have bought for £9.1m? were losses that great in the final season at the Ricoh given rent wasnt paid, the escrow account used up, wage bill dropped routine maintenance not carried out and income holding firm when the cup runs were entered in to the equation. The aim is to run on a balanced budget - match day income wont do it at Sixfields but there are other ways to get income and player sales will be one
What I think has happened is that Otium have used the money to firstly buy the rights to any assets in CCFC Ltd for £1.5m. Secondly they have bought from CCFC H the assets it owned (Ryton, equipment, trademark, players, any goodwill, debtors, stock etc etc). Now they can choose any value they like on all that but would seem logical to choose a figure that pays off the loans CCFC H had from Otium plus the loan from ARVO £6.275m. After potential funding since 31/05/12 call it all £10m. The neat thing about that is ARVO loan Otium 9.1m part of which £6.275m they get straight back when Otium buys the CCFC H assets which were all charged to ARVO in the first place. In addition Otium have bought the rights to rates refunds, transfer monies still due on previous sales, compensation and prize monies due but withheld by the league etc - there is cash flow coming
This leaves Otium with loans to ARVO of 11.1m but assets bought from other group companies 11.5m (CCFC LTd 1.5m CCFC H 10m). The original CCFC companies now disappear. At 31/05/12 the Group balance sheet disclosed net liabilities at £38m. What it might look like now is
Assets in Otium 11.5m
Liabilities to ARVO 11.1m
Current assets 3.0m
curr liabilities 3.0m
Loans from SISU funds 28.8m (these loans are parked in SBS&L, they dont have to repay infull or at all, they can use SBS&L in other projects and recoup losses/value)
value of Group debt 28.4m instant improvement
go a step further and just look at the value of the football operation
Assets 11.5m
ARVO (11.1m)
Current assets 3.0m
Curr. Liabilities (3.0m)
represented by
shares issues 0.5m
Reserves (0.1m)
Worth of the football operation balance sheet is on that basis 0.4m .............. bit different to a football club with a balance sheet £50m, £60m £70m in debt.
This is about adding value, not the revenue losses. Makes the club more attractive to investors or easier to sell. Add to it a ground and that makes an interesting proposition doesnt it? In fact would that encourage finance to buy the Ricoh or a new ground? Then add to it rising values of playing staff, a premium to be added by being in Championship if promoted etc etc etc
All guess work I know but I wonder if it will be far off the mark. There has to be a reason or rhyme to their planning or stance. It isnt, I feel, about revenue losses it is about adding value in what ever way they can including clever accounting. Not sure they are in a hurry or as pressured as some think
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