OFFISHAL CONFRIMATION of the CONFIMRED

[Sutekh]

That's how we ended up in this mess in the first place....!

No, we ended up in this mess because we had a guy who decided to stop spending money AND wasted it on useless signings.

No we werein this situation because we were the play thing or a rich nut case who threw money away on rubbish building up massive debt unsustainably whilst being an utter failure.

Musk is currently destroying Twitter and the US and is an absolute nutjob mentalist. We want nothing to do with anyone who rates him, let alone him

Presume investment will largely be used to keep Academy turning over at cat1 status and maybe augmenting the odd transfer deal here and there eg. perhaps able to loan in top dollar PL youngsters that could make a difference. Certainly better than suddenly unveiling the next Sone Aluko.

[windermereROYAL]

10.001

[Royalwaster]

Have been told that Aliya Capital Partners have bought a 25% stake in the club - with the option of increasing their holding up to 100%. I guess this makes sense as RC probably sees them as his potential exit strategy if we make it up to the Champ.

[rfc8]

So Rob Couhig paid £25m for the shares and took on c£90m of debt
Now sells 25% for say £6.25m
The £90m debt stays on the b/s owed by the club which is owned 75% RC and 25% US investors
US investors have option to buy remaining 75% later on
Would happily hear alternate details if this is wrong !

[Sutekh]

Have been told that Aliya Capital Partners have bought a 25% stake in the club - with the option of increasing their holding up to 100%. I guess this makes sense as RC probably sees them as his potential exit strategy if we make it up to the Champ.

Presume they’ll need to be cleared by the FL?

[From Despair To Where?]

The original statement does say pending EFL approval.

[Scutterbucketz]

R£ading FC

We're back. Get Kia on the phone.

This raised a chuckle

[Royalwaster]

The original statement does say pending EFL approval.

Yes sorry that is the proposal

[Scutterbucketz]

So Rob Couhig paid £25m for the shares and took on c£90m of debt
Now sells 25% for say £6.25m
The £90m debt stays on the b/s owed by the club which is owned 75% RC and 25% US investors
US investors have option to buy remaining 75% later on
Would happily hear alternate details if this is wrong !

Looking at these figures I just cannot understand how any Investment firm would want to be in involved with us. Someone help it make sense. How is that £90million debt ever cleared? Or is that the point? They just kick that can into eternity?

[rfc8]

So Rob Couhig paid £25m for the shares and took on c£90m of debt
Now sells 25% for say £6.25m
The £90m debt stays on the b/s owed by the club which is owned 75% RC and 25% US investors
US investors have option to buy remaining 75% later on
Would happily hear alternate details if this is wrong !

Looking at these figures I just cannot understand how any Investment firm would want to be in involved with us. Someone help it make sense. How is that £90million debt ever cleared? Or is that the point? They just kick that can into eternity?

I think the idea is you grow the club by getting promoted or other ways, perhaps convert the debt into equity, shares, and sell at a profit, ie over £100m or so in our case, but this is all pure speculation unless someone has more info !

[rabidbee]

So Rob Couhig paid £25m for the shares and took on c£90m of debt
Now sells 25% for say £6.25m
The £90m debt stays on the b/s owed by the club which is owned 75% RC and 25% US investors
US investors have option to buy remaining 75% later on
Would happily hear alternate details if this is wrong !

Looking at these figures I just cannot understand how any Investment firm would want to be in involved with us. Someone help it make sense. How is that £90million debt ever cleared? Or is that the point? They just kick that can into eternity?

It’s not real debt, it’s a debt to themselves. Dai put in £90m+ into the club, but it was given in the form of a loan rather than just pumping in money. That ‘debt’ was transferred from Dai to Couhig et al - so the club owes its owners £90m+. If the club is ever profitable, the money can be extracted as the repayment of a loan rather than as a dividend, hence untaxed. If the club never turns a profit, the ‘debt’ never needs to be paid off. The only time it might be an issue is if the club was sold but the ‘debt’ wasn’t transferred to the new owners, leaving a possibility that the old owners might try to call it in.

[Reading4eva]

So Rob Couhig paid £25m for the shares and took on c£90m of debt
Now sells 25% for say £6.25m
The £90m debt stays on the b/s owed by the club which is owned 75% RC and 25% US investors
US investors have option to buy remaining 75% later on
Would happily hear alternate details if this is wrong !

Looking at these figures I just cannot understand how any Investment firm would want to be in involved with us. Someone help it make sense. How is that £90million debt ever cleared? Or is that the point? They just kick that can into eternity?

Effectively, yes it can be. Its money that Dai "lent" the club. Now I don't know this but it is likely that Rob and his team bought this said debt for pennies in the pound (probably as part of the price agreed). That money becomes oweable to Rob. Then there's three scenarios, the debt is again sold in the same manner, part or all of the debt is paid off (Premier League over a number of years could make this possible) or the debt is written off by Rob or a future owner - the benefit being that the club is then "debt free" and worth more in liquid capital to the prospective owners.

I might have some of this wrong but I believe this is how it works. Maybe I should have dug more into this during the interview. I am in no way an expert and best thing would be for an expert to fill in the gaps or correct my errors.

[rabidbee]

So Rob Couhig paid £25m for the shares and took on c£90m of debt
Now sells 25% for say £6.25m
The £90m debt stays on the b/s owed by the club which is owned 75% RC and 25% US investors
US investors have option to buy remaining 75% later on
Would happily hear alternate details if this is wrong !

Looking at these figures I just cannot understand how any Investment firm would want to be in involved with us. Someone help it make sense. How is that £90million debt ever cleared? Or is that the point? They just kick that can into eternity?

Effectively, yes it can be. Its money that Dai "lent" the club. Now I don't know this but it is likely that Rob and his team bought this said debt for pennies in the pound (probably as part of the price agreed). That money becomes oweable to Rob. Then there's three scenarios, the debt is again sold in the same manner, part or all of the debt is paid off (Premier League over a number of years could make this possible) or the debt is written off by Rob or a future owner - the benefit being that the club is then "debt free" and worth more in liquid capital to the owners.

I might have some of this wrong but I believe this is how it works. Maybe I should have dug more into this during the interview. I am in no way an expert and best thing would be for an expert to fill in the gaps or correct my errors.

I suspect they bought the club for a pound, and repaid £25m (or whatever the final purchase price was) of the debt to Dai, who also agreed to transfer the rest of the outstanding debt (£90m) to Couhig et al.

[Scutterbucketz]

So Rob Couhig paid £25m for the shares and took on c£90m of debt
Now sells 25% for say £6.25m
The £90m debt stays on the b/s owed by the club which is owned 75% RC and 25% US investors
US investors have option to buy remaining 75% later on
Would happily hear alternate details if this is wrong !

Looking at these figures I just cannot understand how any Investment firm would want to be in involved with us. Someone help it make sense. How is that £90million debt ever cleared? Or is that the point? They just kick that can into eternity?

It’s not real debt, it’s a debt to themselves. Dai put in £90m+ into the club, but it was given in the form of a loan rather than just pumping in money. That ‘debt’ was transferred from Dai to Couhig et al - so the club owes its owners £90m+. If the club is ever profitable, the money can be extracted as the repayment of a loan rather than as a dividend, hence untaxed. If the club never turns a profit, the ‘debt’ never needs to be paid off. The only time it might be an issue is if the club was sold but the ‘debt’ wasn’t transferred to the new owners, leaving a possibility that the old owners might try to call it in.

So effectively, Dai wrote off £90m?

In which case, why have the debt pass on at all? Or is the promise of just maybe one day getting some of it back part of the attraction to investment firms?

[rfc8]

If Rob Couhig is reading this financial speculation obviously knowing most or all of the answers he may be thinking with each post, getting warmer, getting colder
Wonder if he could be tempted to tell us what the picture actually is !

[rabidbee]

Looking at these figures I just cannot understand how any Investment firm would want to be in involved with us. Someone help it make sense. How is that £90million debt ever cleared? Or is that the point? They just kick that can into eternity?

It’s not real debt, it’s a debt to themselves. Dai put in £90m+ into the club, but it was given in the form of a loan rather than just pumping in money. That ‘debt’ was transferred from Dai to Couhig et al - so the club owes its owners £90m+. If the club is ever profitable, the money can be extracted as the repayment of a loan rather than as a dividend, hence untaxed. If the club never turns a profit, the ‘debt’ never needs to be paid off. The only time it might be an issue is if the club was sold but the ‘debt’ wasn’t transferred to the new owners, leaving a possibility that the old owners might try to call it in.

So effectively, Dai wrote off £90m?

In which case, why have the debt pass on at all? Or is the promise of just maybe one day getting some of it back part of the attraction to investment firms?

Read back over the last couple of pages. Leaving the ‘debt’ on the books means that the current or future owners will be able to recoup up to £90m tax-free, should the club either turn huge profits, or suddenly be worth a high value. If it never achieves that, the debt just sits there doing nothing.

I would imagine the debt will continue to grow as the owners invest more into the team.

[Linden Jones' Tash]

It's the word 'debt' that isn't helpful in this context... right - means something different in the world of Rich football club owners....

It took me a while to get my head around it:

If someone buys £90M of 'debt' for £25M, how can it still be worth £90M.....?

But as more knowledgeable Nobbers have stated, it still notionally has the original value and can be used for tax shenanigans...

That's what buying a distressed asset is all about i guess...

[Snowflake Royal]

So Rob Couhig paid £25m for the shares and took on c£90m of debt
Now sells 25% for say £6.25m
The £90m debt stays on the b/s owed by the club which is owned 75% RC and 25% US investors
US investors have option to buy remaining 75% later on
Would happily hear alternate details if this is wrong !

Looking at these figures I just cannot understand how any Investment firm would want to be in involved with us. Someone help it make sense. How is that £90million debt ever cleared? Or is that the point? They just kick that can into eternity?

It's not real money. Couhig payed £25m for a football club, stadium, training ground and £90m debt.

Couhig only needs to sell for £26m + costs to make a profit.

[Scutterbucketz]

Fair play to Dai then. What a thoroughly nice chap.

[Lower West]

Dai put in £90m+ into the club, but it was given in the form of a loan rather than just pumping in money.

For simplicitity let's just say that Dai "borrowed" the money. The debt remains owed. Hence why the sale process was both protracted and complex. Both the ground and training complex are valuable tangible assets.