Our Debt

[Tarbie]

What would be the selling price of our club?

Ground value + assets (ie players) + cash in bank.....pobably.

I'd guess well under 100m mate.

[Tarbie]

Ground value + assets (ie players) + cash in bank.....pobably.

I'd guess well under 100m mate.

And that's assuming we are sold free of any debts by the way!

[brightonr]

That's if this "converted to shares" thing is all that it seems.

Did you happen to see the annual accounts Brighton?

If there is a payment to shareholders as has been suggested, I'd like to see what model that is based on. I've never known shareholders of a loss making business being paid a dividend before!

No Tarbie, there would have been no payment. Not suggesting that for a minute.

Basically, all that happened was the shareholders getting more shares rather than their cash back.

Might take a while, but I'll try to find the details. Can't believe people are stuggling to understand this.

[1973 ranger]

Fernandes bought his 66% for the 65-70 million mark but that was when we were a premier league team and had a better standard of player so I would guess nearer 50-60 million.

[brightonr]

Here's an article from the Telegraph. Easier to find than I first thought.

http://www.telegraph.co.uk/sport/foo...ow-for-it.html

[Timmy the Doc]

So ground is worth £40m and players £20m?

[Tarbie]

Yeah ok, I get it now.

Interest free loans from the shareholders basically. Hence we are being run so frugally these days, cos a percentage of our income needs to be set aside to repay the shareholders.....albeit very slowly no doubt!

[Tarbie]

So ground is worth £40m and players £20m?

Might justify a bit more than that for playing staff. Smithies might just about fetch half that on his own on current form. Grant Hall, Sylla, Luongo, Caulker and maybe a few others would justify multi-million pound fees. Reckon you could probably stretch the value of playing staff to 30-35m.

As for the ground, to be honest I have no idea what you'd value an undeveloped space that size in Shepherds Bush. If I had to take a punt I'd say about the same amount again!

[1973 ranger]

So not too much value for the owners then owning us?

[Timmy the Doc]

Fully understand the need to develop our infrastructure and increase it's value.

[eb7526]

The original article was referencing financial year 2015, which was before the debt-equity swap. As far as has been publicised the club is currently debt free because of this.

[Tarbie]

So not too much value for the owners then owning us?

They've spent far more than we are worth mate. Probably spent more than we worth worth in the Prem, with all the players signed still on the books to be honest!

The Telegraph article says the interest free loans from the shareholders amount to 180m. I'd say that this would be a massively generous valuation of the club. If they ever requested repayment in full of that amount it would force the club into receivership.......Not that that scenario is particularly likely!

[brightonr]

They've spent far more than we are worth mate. Probably spent more than we worth worth in the Prem, with all the players signed still on the books to be honest!

The Telegraph article says the interest free loans from the shareholders amount to 180m. I'd say that this would be a massively generous valuation of the club. If they ever requested repayment in full of that amount it would force the club into receivership.......Not that that scenario is particularly likely!

This really is getting frustrating now.

They can't ask for it back. It's gone. Finished. Written off. No longer exists.

All £240m worth of debt has been eradicated, in two separate transactions. Slate wiped clean.

Not defending the board's mind blowing stupidity in getting themselves into that state in the first place. Not for a moment.

But credit them for taking the hit themselves, even though it was their fault.

I suspect Portsmouth fans wish their previous owners had done similar.

[Martinel]

A debt/equity swap is a refinancing deal in which a debtholder gets an equity position (shares) in exchange for cancellation of a debt. The clubs losses were being underwritten by loans from shareholders and these loans were recognised as a loss for accounting purposes. I think to improve the balance sheet and with a probable nod to FFP (which is possibly causing the ongoing debate with the FL) the debt/equity swop removed the debt from the balance sheet and reduced reported losses for the Club. The shareholders now own huge numbers of shares issued in exchange for the debt and they have little chance of recovering their losses if the Club is ever sold because the total value or per share offer is likely to be less than the effective share costs. At that point I guess an actual loss arises and shareholders can look to claim any tax reliefs on the losses.

[Tarbie]

This really is getting frustrating now.

They can't ask for it back. It's gone. Finished. Written off. No longer exists.

All £240m worth of debt has been eradicated, in two separate transactions. Slate wiped clean.

Not defending the board's mind blowing stupidity in getting themselves into that state in the first place. Not for a moment.

But credit them for taking the hit themselves, even though it was their fault.

I suspect Portsmouth fans wish their previous owners had done similar.

Not sure it's as simple mate. This article goes into a lot more detail.

http://swissramble.blogspot.co.za/2016/05/queens-park-rangers-they-cant-buy.html

There is just shy of 181m that was "converted into to capital". Not 100% sure but I believe what that means is the shareholders acquired this debt in return for stake in the club. Nothing I've read anywhere adequately confirms whether this means the debt still exists or not.