What I don't understand is how due dilligengence could have unearthed an additional £5-10m worth of debt that wasn't previously known about. We're a public company and we have to publish audited accounts. All creditors would have been accounted for, IMHO so that part of the story I cannot believe. BUT regarding the collapse of the takeover, there's no smoke without fire so I'm preparing for the worst.
The Inspector asked: 'is this brinkmanship from the consortium?''
I suspect that is exactly what is going on, as I tried to suggest last night.
There clearly is a snag over the final figures and the only reason that I can detect for ''someone close to the bid'' planting the MOS story is to put pressure on the existing board to make further concessions over the terms of the sale. The administration line, which is purely speculative, has to be taken in that context.
As for the debts and the balance sheet, well if you ask any two accountants they will likely as not come up with different figures, depending on what they count in and count out. (Let me give you an example :last year Kent CCC spent more than one million on fees for a ground development project that collapsed. Is that million listed as a loss? No, it's listed in the accounts as a fixed tangible asset on the grounds that IF we can resurrect the scheme when the recession is over, we won't have to spend the same money again on surveryors/architects/planning applications. A lot of Kent members, however, claim it isn't a tangible asset at all because there's no realistic chance of reviving the scheme or if it does come back, it mught well be so radically different that the fees will have to be spent all over again, anyway). See what I mean? Clever people these accountants. When you give them a piece of paper and a bunch of figures they can pretty much make two plus two equal any number you want...
So it is more than possible that the existing board and the prospective purchasers have calculated the debts and the assets and come up with two quite different answers, and the difference in the two sets of figures may well correlate to the £5-10m additional debt which American Addick says has been ''discovered''.
The MOS headline is probably correct in that the deal is ''on the brink''. That doesn't mean it is totally dead yet. I suspect we're now into a game of who blinks first and there's probably a twist and turn or two yet to unfold.
[cite]Posted By: InspectorSands[/cite]I think that old gang need to look at their own conduct in the past 12/18 months, dropping in on message boards to stir stuff when the damage had already been done.
But hey, a crisis demands unity.
Funny way to demand unity, slagging off somebody (probably the only one here) who has direct access to a director.
My view for what it is worth is that this story has some truth in it even if the figures are not right. In the current economic climate i would imagine it is just about the worst time to be selling a football club particularly one that has fallen so quickly in perceived value and status. It is not inconceivable that the people involved in any negotiations that may or may not be happening are under pressure financially from the recession. I believe that a positive announcement had been expected by Charlton people involved in making the deal. I suspect that this may now be up in the air. I think it is going to be a hard week everyone. I really hope I'm wrong.
Surely none of us can be surprised by such a paragraph (it is hardly an article), but it does not mean the club is heading for administration, though with the way the club has appeared to operate in recent months it is surprising earlier assertions to this effect have not resurfaced before.
The revised debt figure (20mn over and above the previously noted friendly & mortgage debt) seems excessive but as others have indicated I suspect much of it refers to contingent trading liabilities. e.g.we employ 23 full time players with half having contracts extending to 2011.
That said as future trading receipts are unlikely to cover such liabilities any new investor will need to pick up the tab and that is before funding any personnel changes the new investor may want to make. So although bordering on brinkmanship in strictly financial terms the premise of the argument made is entirely correct. Buying the club from the administrator is likely to be a more attractive proposition.
In reality none of us really knows what (if anything) is happening in the background but the boards’ apparent suspension of management of the club almost indicates to any potential investor they simply have no other game plan thus weakening their already fragile negotiating position.
I retain my regard for this board’s commitment & endeavor of the past decade but to me this has been one of the most disheartening close seasons I can recall. The silence over this period has been so profound it is as if the club was on automatic pilot until someone came along with enough fuel to decide when and where it will land.
Any information given seemed merely to respond to that of other clubs signing our ex players. As each day passes it seems clear the football side has had to fight a severe case of corporate constipation. The squad again looks ill prepared for the task ahead, with some coaches & players still part of the club apparently by financial default.
Incredibly it appears the long term future of the club may almost be better served by administration. After all that the current board achieved for over a decade what a tragic turn of events that would be!
what gets me is that we have been in negotiations for months, surely any normal person would have sacked the brokers for working slowly to build their fees up! Other takeovers seem far quicker than this trip down tedium lane
Last minute hitch! Additional debt of around 20m found at the last minte! Give over, this takeovers been going on for a good few weeks/maybe months. There's no way in this world that they could've hidden debt of this amount in that time.
I do think you're all missing the most worrying aspect from this story..."A GROUP OF LOCAL BUSINESSMEN"!!! What happened to the arabs, irish, yanks, swiss, chinese, japanese??? I'm more gutted we won't be wearing the national dress of these fine countries. My tea towel is going straight back to where it belongs...into the hands of Mrs. Bolderhumphreyreid.
This sounds like a negotiating position to me in the final denouement. Discovery of extra liabilites suggests to me, if it's true, contingent ones. Maybe it's redundances that might need to be made should the new owners not be able to drive the business forward? Its very unlikely that a whole line of debt has suddenly been discovered. It's more like revised circumstances have cystalised a potential future liability.
We should hear next week. I heard it was going to be Monday but conceivably if there are last minutes re-negotiations going on, we may have to wait a but longer.
We have signed new players this week (albeit free), but we have agreed wages with them, we have launched a new shirt, and we have attracted a new sponsor, allegedly on a very good deal based on our current status and highly comparable with some top championship clubs, allegedly. Do you really think these players, the shirt manufacturers, and especially KRBS would have invested with us if we were close to administration?
KRBS especially, would have gone through some sort of sound financial analysis before committing money to us surely?
OK, we are skint, but it cant be that bad if all the above has happened in the last week, unless the club have pulled the wool over the eyes of Llera, Richardson, Joma & KRBS
I'm honestly trying to make sense of this piece of journalism.................and I simply can't....it's either depressingly correct or depressingly inacurate........either way it's depressing and I'm sure it was meant to be just that.
Like everything else at the moment re the club it's speculation and guess work on everyones part....depending whether by nature you're a glass half full or glass half empty character will depend on how you view it.
The words....'group of local businessmen' intrigues me as much as anything else though?
Of course pre Christmas the' friendly debt' was almost dismissed at that time as if it did not count as it was to the directors of the club,...... in the same way that the assets of the training ground was ok as it was to the directors. ' Always felt this was a problem in the making as the board were trying to secure new funding/buyers /investors. When the issue of the freehold of the ground came up a couple of weeks ago on here alarm bells went off again as friendly debt soon becomes 'debt' when people want there money or investment back. Whatever the figures of debt/loans etc, the valuation at Zabeel looks wildly optomistic now, the players value seems very low set against contract wage liability, and even the ground/training ground is dubious from the point of view of a sale because of the limitations of use it would attract for a developer.i.e. housing. As others have suggested this seems like a tactic to secure the club with minimum outlay, which is a fair position as the rebuilding will be a big ask for any investor. Any news on who these people are!. Michael Grade one of them!.......... I hope the deal goes through seems as though the current board want out as soon as........
Totally agree with DA9. Although knowing our recent luck the MOS probably have hit onto something, though for the life of me I can't quite work out how Southampton docked 10 points, on the edge of (alleged) oblivion and (allegedly) days from playing in the Conference are somehow able to secure a Knight in shining armour and can now look forward with a guarded optimism. For us the skydive seems set to linger on for a while yet. Alternatively it could be a ploy to get a better deal for the buyers or a load of cobblers from the MOS!
To be honest, if the new buyers are prepared to use the threat of the club going into administration as a bargaining position, are they really the kind of new owners we want for the club?
What you have to remember is this story is not a crack piece of investigative journalism. It is a quite deliberate plant by ''a source close to the bid''.
Just ask yourself why they would do that and it all becomes a lot clearer - and less scary.
Remember the last time you bought/sold a house? Conditional offer, surveyor's report used as ammunition to try to beat the price down, the threat to withdraw from the purchase in the knowledge that the seller is sitting in a chain and can ill-afford to let the sale fall through etc ?
I am fairly confident that's what is going on here...
[cite]Posted By: nigel w[/cite]What you have to remember is this story is not a crack piece of investigative journalism. It is a quite deliberate plant by ''a source close to the bid''.
Just ask yourself why they would do that and it all becomes a lot clearer - and less scary.
Remember the last time you bought/sold a house? Conditional offer, surveyor's report used as ammunition to try to beat the price down, the threat to withdraw from the purchase in the knowledge that the seller is sitting in a chain and can ill-afford to let the sale fall through etc ?
I am fairly confident that's what is going on here...
I share your optimism nigel.......................................................................but only just!
[cite]Posted By: carly burn[/cite]Local Business men: Owner of the 'valley cafe',coombs bookmakers,owners of burger van outside club shop,man from brush strokes.
Mr Totty....the local chemist and not forgetting Rock_Spectacle!
"Charlton are poised to be the next club to fall into administration, with a takeover bid on the brink of collapse because of debts of up to £40m.
A group of local businessmen who had been in talks about a £30m buy-out were alarmed to discover the extent of the League One club's liabilities.
A source close to the bid said last night: 'The club are going through a slow, painful death. In strict business terms, a club with 10 fewer points, but millions of pounds less debt would be a far more attractive proposition.'"
Poised. Brink. Alarmed. Slow painful death.
Selected bits, but also:
'millions of pounds less debt would be a far more attractive proposition'
Is this really about driving the price of whatever takeover down? If the club is given away for free, but new people take on the liabilities it's one thing, but maybe new people have to pay money for the club, and also take on the liabilities another thing altogether.
Comments
The Inspector asked: 'is this brinkmanship from the consortium?''
I suspect that is exactly what is going on, as I tried to suggest last night.
There clearly is a snag over the final figures and the only reason that I can detect for ''someone close to the bid'' planting the MOS story is to put pressure on the existing board to make further concessions over the terms of the sale. The administration line, which is purely speculative, has to be taken in that context.
As for the debts and the balance sheet, well if you ask any two accountants they will likely as not come up with different figures, depending on what they count in and count out. (Let me give you an example :last year Kent CCC spent more than one million on fees for a ground development project that collapsed. Is that million listed as a loss? No, it's listed in the accounts as a fixed tangible asset on the grounds that IF we can resurrect the scheme when the recession is over, we won't have to spend the same money again on surveryors/architects/planning applications. A lot of Kent members, however, claim it isn't a tangible asset at all because there's no realistic chance of reviving the scheme or if it does come back, it mught well be so radically different that the fees will have to be spent all over again, anyway). See what I mean? Clever people these accountants. When you give them a piece of paper and a bunch of figures they can pretty much make two plus two equal any number you want...
So it is more than possible that the existing board and the prospective purchasers have calculated the debts and the assets and come up with two quite different answers, and the difference in the two sets of figures may well correlate to the £5-10m additional debt which American Addick says has been ''discovered''.
The MOS headline is probably correct in that the deal is ''on the brink''. That doesn't mean it is totally dead yet. I suspect we're now into a game of who blinks first and there's probably a twist and turn or two yet to unfold.
Funny way to demand unity, slagging off somebody (probably the only one here) who has direct access to a director.
In the current economic climate i would imagine it is just about the worst time to be selling a football club particularly one that has fallen so quickly in perceived value and status.
It is not inconceivable that the people involved in any negotiations that may or may not be happening are under pressure financially from the recession.
I believe that a positive announcement had been expected by Charlton people involved in making the deal.
I suspect that this may now be up in the air.
I think it is going to be a hard week everyone. I really hope I'm wrong.
The revised debt figure (20mn over and above the previously noted friendly & mortgage debt) seems excessive but as others have indicated I suspect much of it refers to contingent trading liabilities. e.g.we employ 23 full time players with half having contracts extending to 2011.
That said as future trading receipts are unlikely to cover such liabilities any new investor will need to pick up the tab and that is before funding any personnel changes the new investor may want to make. So although bordering on brinkmanship in strictly financial terms the premise of the argument made is entirely correct. Buying the club from the administrator is likely to be a more attractive proposition.
In reality none of us really knows what (if anything) is happening in the background but the boards’ apparent suspension of management of the club almost indicates to any potential investor they simply have no other game plan thus weakening their already fragile negotiating position.
I retain my regard for this board’s commitment & endeavor of the past decade but to me this has been one of the most disheartening close seasons I can recall.
The silence over this period has been so profound it is as if the club was on automatic pilot until someone came along with enough fuel to decide when and where it will land.
Any information given seemed merely to respond to that of other clubs signing our ex players. As each day passes it seems clear the football side has had to fight a severe case of corporate constipation. The squad again looks ill prepared for the task ahead, with some coaches & players still part of the club apparently by financial default.
Incredibly it appears the long term future of the club may almost be better served by administration. After all that the current board achieved for over a decade what a tragic turn of events that would be!
Grapevine49
Not incredible any more, but almost unbearably sad.
I do think you're all missing the most worrying aspect from this story..."A GROUP OF LOCAL BUSINESSMEN"!!! What happened to the arabs, irish, yanks, swiss, chinese, japanese??? I'm more gutted we won't be wearing the national dress of these fine countries. My tea towel is going straight back to where it belongs...into the hands of Mrs. Bolderhumphreyreid.
Maybe I'm rose tinted or maybe I just think it's a crock of poop
And I can't abide people who drink Budweiser to the point that they dribble it all over themselves........LOL!
We should hear next week. I heard it was going to be Monday but conceivably if there are last minutes re-negotiations going on, we may have to wait a but longer.
KRBS especially, would have gone through some sort of sound financial analysis before committing money to us surely?
OK, we are skint, but it cant be that bad if all the above has happened in the last week, unless the club have pulled the wool over the eyes of Llera, Richardson, Joma & KRBS
Something doesn't add up somewhere whether that is on here, at the MOS or in our accounts I don't know.
Squeaky bum time
Like everything else at the moment re the club it's speculation and guess work on everyones part....depending whether by nature you're a glass half full or glass half empty character will depend on how you view it.
The words....'group of local businessmen' intrigues me as much as anything else though?
'
Always felt this was a problem in the making as the board were trying to secure new funding/buyers /investors. When the issue of the freehold of the ground came up a couple of weeks ago on here alarm bells went off again as friendly debt soon becomes 'debt' when people want there money or investment back. Whatever the figures of debt/loans etc, the valuation at Zabeel looks wildly optomistic now, the players value seems very low set against contract wage liability, and even the ground/training ground is dubious from the point of view of a sale because of the limitations of use it would attract for a developer.i.e. housing. As others have suggested this seems like a tactic to secure the club with minimum outlay, which is a fair position as the rebuilding will be a big ask for any investor. Any news on who these people are!. Michael Grade one of them!.......... I hope the deal goes through seems as though the current board want out as soon as........
Did anyone hear him....what did he say...(if anything) about us?
The quote seems to indicate that we might go into admin, lose 10 points and get taken over?
The only problem that I have with the article is that is maded by a Sportsmail Reporter and that it was given by a source close to the bid.
Everybody being anonymous event the reporter.
Would it really be the biggest disaster if we did?. Bigger clubs than us have been there and survived.
Just ask yourself why they would do that and it all becomes a lot clearer - and less scary.
Remember the last time you bought/sold a house? Conditional offer, surveyor's report used as ammunition to try to beat the price down, the threat to withdraw from the purchase in the knowledge that the seller is sitting in a chain and can ill-afford to let the sale fall through etc ?
I am fairly confident that's what is going on here...
I share your optimism nigel.......................................................................but only just!
Mr Totty....the local chemist and not forgetting Rock_Spectacle!
A group of local businessmen who had been in talks about a £30m buy-out were alarmed to discover the extent of the League One club's liabilities.
A source close to the bid said last night: 'The club are going through a slow, painful death. In strict business terms, a club with 10 fewer points, but millions of pounds less debt would be a far more attractive proposition.'"
Poised. Brink. Alarmed. Slow painful death.
Selected bits, but also:
'millions of pounds less debt would be a far more attractive proposition'
Is this really about driving the price of whatever takeover down?
If the club is given away for free, but new people take on the liabilities it's one thing, but maybe new people have to pay money for the club, and also take on the liabilities another thing altogether.
A bit confused and worried here.