Jump to content

Tommo220

Member
  • Post count

    8
  • Joined

  • Last visited

Community Reputation

10 Average

About Tommo220

  • Rank
    New Signing

Recent Profile Visitors

The recent visitors block is disabled and is not being shown to other users.

  1. You're kinda missing the point of what i'm saying. i haven't said that KP are splashing the cash or otherwise - although i have asked whether thats ever actually been confirmed. I've simply said that you (and others) are putting way too much emphasis on the development facility in the grand scheme of things in regards to King Power's long term investment in the club. it's a means to an end and doesnt really reflect how much money KP are going to put in to the club. If you want to look at it simplistically, yes, we borrow money and have to pay it back at a later date but thats the same in regards to any loan. What this is, is a development facility (and also happens to be my day job!). Think of it as a self build mortgage. when you take out a SBM, you agree the amount (the build cost + a possible advance on any land value + any fees the bank charges + the amount of interest they are likely to accrue during the term), the stages in which they'll hand you the money (i.e. as the project progresses, they'll give you the money to pay for it), the term - maybe its 35 years for your mortgage, and as part of the banks due diligence, the bank want to make sure that you/your other half earn enough to cover your monthly payments which when all added up over the course of the term, will have paid everything back. Your wage in this example, is the clubs TV monies, the amount is apparently £100m and the term is 2 years. Development Finance is more expensive in terms of interest and fees than usual borrowing (sometimes upwards of 12-15%). So if the club has a longer term, they need need to factor in a larger interest roll up, which means higher fees (these are usually linked to overall facility amount) so its sensible to keep the term short (but not too short that it isn't built by the end). Once the training ground is completed, the club have 2 options: A. refinance on to a commercial mortgage (you'd struggle to get a long term mortgage on a project that hasn't yet been built so it has to be done this way) moving the debt from the current lender, to another cheaper more long term option. effectively remortgaging your house to a different lender. or B. Pay the bank back with cold hard cash in the form of sold players or TV revenue as outlined in the agreement. Crucially, the banks are not bothered where the money comes from - so long as they get their money, fees, and interest they couldn't care less where it comes from - they've made their money. Most importantly, if the club do nothing, then the bank can AND WILL exercise their charge over our prize money as outlined in the agreement. This is like the caveat on your mortgage application that says "failure to keep up with repayments may result in your house being repossessed". to the bank, our premier league earnings are much better to hold as security than the asset of the training ground as its cash - sat there waiting. If you want to see this in action, go take a look at ANY of the development projects happening in London/Birmingham/Manchester right now - almost every single one of them will be funded in this way regardless of how much money the parent company has in their bank account. It's a means to fund a development - nothing more. If it has a 2 year term, thats how long the club and the Main Contractor expect it to take to complete the project to Practical Completion. The problem is that you are looking at this as if you were to nip down to Wonga and borrow some cash to buy a TV, when in reality it's just not the same. The procurement of development finance, and commercial/construction finance in general is a completely different kettle of fish. They are lending money against a construction project, which will be drawn down from the bank as and when the contractor makes their interim applications for payment. I'm simply saying that King Power's willingness to pump cash in to the club, and the development facility are mutually exclusive. Just because one is in place, it doesn't necessarily mean anything in relation to the other.
  2. As it should be - The financial institution need some form of certainty that, once they've leant the money out, we have a manner in which to pay them back (PL revenue in this case - selling what ever you're building in the case of usual development). We'd find it almost impossible to find someone to lend us £xxm to build a new training ground if the only manner in which we could offer to pay them back at the end was to find someone else to lend us the money as that offers absolutely no certainty to the bank. There's nothing stopping the club from refinancing the project at any point - it'll just be a case of what is most cost effective in terms of how the fees to the current lender are structured.
  3. Absolutely! the facts of the matter are that the training ground will likely end up on an uber low interest commercial mortgage for the next 35 years costing pittance per year, rather than (as you say) swallowing a massive amount of capital right now.
  4. i keep seeing the development finance deal referenced as a reason why we cant afford to do anything, or as to why KP are not putting money in, when in reality a development finance package is simply the most efficient use of capital - nothing more. Why do you think Spurs borrowed to develop WHL, or Arsenal with The Emirates, rather than using cold hard cash in the bank? its the way absolutely EVERYTHING gets built, if you aren't being funded by a Sheik!
  5. Yeh, good point. i suppose it depends on who goes and for how much - assuming Levy actually commits to spend the money they make from selling which is far from a guarantee.
  6. I can't see Spurs spending close to their record transfer fee only months after completing a stadium, which if the tabloids are to be believed has racked them with over half a billion in debt. whats their record signing at the minute, £40m? Seems like a big ask from the notoriously frugal Levy.
  7. Whether you rate him or not, the bloke is a model professional and any lower Premier League club or Championship club are lucky to have him. He's been with us through some of the best and worst times as a club, and contributed massively - especially in getting us back in the prem. Good luck to him - i just hope he isn't such a success for Derby that they get promoted!
  8. This just looks like a Development Loan which is standard for most big projects like this. In today's climate (and with our clubs chequered reputation) you'll be hard pressed to find a Main Contractor who will start work on a £100m scheme without some robust proof that the cash is there. The fact that it's secured against the season prize money from the Prem is most likely because the club itself doesn't own many assets as KP Holdings owns the ground etc. a Bank isn't going to cut us a cheque for a £100m unless they've got something to call in if they decide not to pay up when the payments become due.
×
×
  • Create New...