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Leicester Lass

Owner wipes out debt.

By Leicester Lass, in Leicester City Forum

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Lobsterboyuk

Lobsterboyuk

Posted
Posted

What chat did we have for Martin George, I really don't remember that. Other than sack the board.

When he walked past the kop at filbo we used to chant 'Martin George' , then post kitson turned to 'where's the money gone' (didn't ' go that way anymore though!

surrifox

surrifox

Posted
Posted

Why are so many people focusing this around FFP!?

I don't know the ins and outs of FFP but I imagine its a cap on loans and loss making.

If this move is how it's presented the owners are swapping debt for equity which means the club no longer has an obligation to repay the loan and the owners will receive dividends (with no entitlement unless profits are made)rather than interest on their loans.

Even if the owners waived their rights to receive loan interest the obligation remains on the balance sheet so on the face of it this looks very good for the club.

If the results hit a dodgy patch it might be worth cutting the owners and manager a bit of slack given their commitment to the club .(yes- that will happen!)

Pen 3

Pen 3

Posted
Posted

This is not that surprising, why pay interest on loans when you can buy debt cheaply, take ownership of all the debt security for a discount, and have complete control of the business? It's like us winning the lottery and paying off the mortgage, the car loan, credit card, and doing the same for all our friends and relatives - but with a catch for them: they have to sign over everything they own to us, just in case we ever want the money back! There's nothing to celebrate here, we just have one creditor now rather than half a dozen. Call me cynical but if we all got the banks to lend us the money and we could offer the club's assets as security couldn't we have bought the club with a bit of help from Gary and one or two other people who care?

Guest shearfox

Guest shearfox

Posted
Posted

This pretty much shows their commitment to the club, fantastic news

Benji

Benji

Posted
Posted

This is not that surprising, why pay interest on loans when you can buy debt cheaply, take ownership of all the debt security for a discount, and have complete control of the business? It's like us winning the lottery and paying off the mortgage, the car loan, credit card, and doing the same for all our friends and relatives - but with a catch for them: they have to sign over everything they own to us, just in case we ever want the money back! There's nothing to celebrate here, we just have one creditor now rather than half a dozen. Call me cynical but if we all got the banks to lend us the money and we could offer the club's assets as security couldn't we have bought the club with a bit of help from Gary and one or two other people who care?

 

Is it not the people that already own the club that are issuing themselves new shares?  If it's a pure debt/equity swap, all they have a right to is the shares, to which a dividends can only be declared if the club has distributable reserves, unlike a debt where the club has to pay interest and repayments regardless of how badly it's doing.  Sounds positive to me but I'd be interested to check the Companies House filings to see what they've actually done.

TJB-fox

TJB-fox

Posted
Posted

This is it then, looks like a bit of a big push coming in January with potentially 3/4 players coming in. I would have thought they'd get the contract situation sorted first though

Guest Bilo

Guest Bilo

Posted
Posted

Anyone on here seriously suggesting this means a big spend in Jan... Have a word.

 

One or two additions do appear to be required, especially up front and at the back, but we certainly don't need to go crazy a la Sven. 

 

I wonder what this would mean if we were promoted, would our spending be akin to Cardiff or Blackpool?

teblin

teblin

Posted
Posted

Anyone on here seriously suggesting this means a big spend in Jan... Have a word.

Agree won't be big spending. But from what Pearson said yesterday there will be some activity.

These owners always seemed a little different a they invested in infrastructure as well as playing staff.

Benji

Benji

Posted
Posted

Hate to be a party pooper but...

 

http://www.lcfcworld.co.uk/owners-wipe-debt/?

 

This is the only website which reports this news and it has a massive add for 'Carling' at the top.

 

I've personally never seen this website before.

 

Is it a rather sick joke?

 

There's a filing to increase the company's authorised share capital - so at the least, there's indication of a further share issue.  Might be a while until all filings are updated though given it's Xmas - usually a week or two backlog at Companies House.

Guest shearfox

Guest shearfox

Posted
Posted

They obviously don't want to fall foul of FFP, so I can't see much going on players in Jan.

Be great to get some of our players out of contract at the end of the season new deals. And maybe one or two additions in January.

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