I was 298 post behind. All i gleaned from skipping through was that someone on here paid 77 mill to have a threesome with Cheryl cole and Halle Berry. Money well spent I’d say!
2) RD agreed to take on their debt (effectively clearing it from them and transferring to himself) and paid a notional fee for the club.
Both are effectively the same just approaching from a different angle. They leave the same end product. The purchase price is part of the 55million not additional to it.
Okay, let's say your point 2, above, is correct.
Since the last reports stated the debt upon purchase in Jan, 2014 was £21.6M, and that amount is apparently still on the books, we can assume the total enterprise value of the club was at least that amount, even if he paid only one pound for the club, itself. Do you agree? Yes or no.
Second, since the current debt is now at minimum, £55.6M, if he sells for more than the £21.6M, even if he takes a haircut, then the club's enterprise value went UP despite relegation. Do you agree? Yes or no.
Finally, if he gets £55.6M or more for the club, then it means he has profited. Do you agree? Yes or no?
If I am wrong on any of these 3 points, please explain.
As ever, Charlton would make a great case study for anyone studying Corporate Law, accountancy, or criminal psychology.
I’m not qualified in any way but surely the flaw in @NapaAddick analysis is assuming that the equity value is £14m. It’s irrelevant what the £14m represents, but in RD’s world £14m by definition is surely the Enterprise Value if that's what he paid.
So if debt was £21.6m the value of the equity must have been minus £7.6m. That would be consistent with the valuation of the core business generating revenue less than operating costs.
Introducing more debt and worsening the negative cash flow simply lowers the value of the equity in order to arrive at an Enterprise Value anyone would pay to inherit the existing debt given the need to invest new cash to support the core business until its fortunes were turned round.
If you argue you cannot have zero equity value, then the Enterprise Value is entirely the debt of £55.6m which is where I suggest he is getting his sale price.
Logically a buyer would argue that the only debt that has value is the debt which increases the share price by increasing the asset value. In this case it's how far it has succeeded in improving a negative equity valuation since RD bought the club. The rest of the debt funded operating losses and maintenance costs and has no impact apart from minor impact on asset price write down.
I reckon @cabbles £20m is about right. £14m to buy the same debt RD bought and £6m for the added asset value from RD's further cash advances. He either takes a haircut or an annual shave that includes his scalp. It wouldn't take long for him to burn another £30m/£40m/£50m, so he might as well burn £30m now in one go and walk away.
I was 298 post behind. All i gleaned from skipping through was that someone on here paid 77 mill to have a threesome with Ashley Cheryl cole and LesHalle Berry. Money well spent I’d say!
I apologise for adding to the financial drivel but just to provide Igor with a little more light reading I can but add to my comments of Dec 15.
Let's be thankful we are finally seeing changes to the clubs administration but be mindful there maybe no quick fix here.
People are right to be cautious about how the club & grounds futures will be secured going forward and the ambitions, acumen & resources of any prospective new investors.
I appreciate the Davidsmith & NLA contributions. CharltonParkLane read no more.
The apparent influence of the former directors should be noted. Unless someone is prepared to repay them they may offer the so badly needed checks & balances.
Their charges over Batons fixed assets is due diligence 101. If the issue has not received due attention, there are 2 areas of interest.
The first is the nature of the charges. They will specify whether, in the event of a change of ownership and/or use of assets their formal consent is required. It is a grey area. It would be exceptional for any legal professional to overlook such charges. It is a matter of basic disclosure.
Their importance in terms of any EXIT plan may however have received insufficient attention. The absence of a defined exit plan is not uncommon (see Brexit). M Duchatelet has "previous" with his Ujpest investment. The distraction of having to deal with BVI corporate law and the convoluted ownership of Slater/ Jiminez/ Cash (& related family trusts) may have presented a bit of a challenge.
Now comes the nature of the current deal being negotiated. If it includes the retention of any part of the debt to Staprix, then will the future repayment of such debt be positioned before or after repayment of former director loans?
I can imagine former directors possibly willing to further extend their loans demurring at the prospect of Staprix debts being settled before theirs particularly if any deal involves RD retaining any influence over the clubs future trading ability.
Having long seen the obsessive self importance of this regime I can see them having simply assumed the former directors and their loans would "roll over".
Napa thank you for your valuation. There is no evidence of any payment made by Staprix with regard to the Batons assets beyond the assumption of debt.
The Enterprise valuation you create positions debt as an asset. With respect such interpretation was one of the contributing factors seen in the 2008 financial collapse. It was essentially based on the premise any given business must be worth the value of the debt because someone was prepared to lend the amount to the company in the first place.
There were however 3 conditions which come with it a) the lender was satisfied with the collateral held b) the use of the debt c) the corporate revenues generated were sufficient to carry and ultimately repay such debt.
None of those conditions apply.
It is why the Glaziers were in so much trouble with Man U as they leveraged everything they could get their hands on and then spent years restructuring the debt to rid themselves of the usury rates they had locked into. Needless to say Man U revenues are somewhat different to CAFC.
If CPL & Henry will forgive me on what basis/ trading profile/ revenue generation/ investment return/ yield would you recommend investing £75-£80mn in acquiring the assets of Baton noting the scale of further investment required to maximise industry trading revenues. What would be your exit plan for such investment?
I can but contend it is unlikely any investor and or corporate investment risk manager will pay M Duchatelet even the reported £50mn up front for the assets of the club no matter the industry projections.
The challenge is, as evidenced above and compounded through his inept administration, how can he keep any " skin in the game" to maximise his returns when the skin is already spread beyond thin. The only control he can exert, beyond my 15/12 comments, is by keeping The Valley and Sparrows Lane under the ownership of Staprix.
The terms of any such arrangement will be key though in reality Staprix through its "ownership" has ultimately been no more than the clubs bankers. So in fact we are virtually already there. The club today has a 150/ 200% plus "mortgage" on its assets. The club just pays interest rather than rent.
Staprix in retaining the ownership of the Baton assets will still face the same problems in that they are still a) diminished by the prior charges b) exceptionally difficult to realise c) unlikely to secure sufficient funds to clear their debt.
No matter the endless double speak in the world of football finance this is where "the rubber hits the road". In essence the debt (as is) is beyond redemption. So just where does Duchatelet and more importantly the club go from here.
No matter the relative stability seen this season his game plan has failed in terms of diminished playing status, financial performance, market penetration and liquid asset values.
None but the man himself can know how he will want to draw a line under his sojourn through European football.
We have to face the possibility an extended extraction from the situation.
If Staprix retains the fixed assets of Baton as security for its outstanding debt then, depending on the terms of the deal, a new administration can still secure a platform to use those assets to take the club forward.
Indeed M. Duchatelet now needs someone else to do the heavy lifting providing new working capital, a fresh approach and a more appropriate level of industry expertise.
The investment return today set at 3% by way of interest charges is not sustainable. It never was. The challenge remains in restructuring the arrangement to convert any investment return to a facilities/ ground rental which is acceptable to the new administration. It will require security of tenure.
Such a solution is problematic. The creation of a lease would require the consent of the former directors holding the charges over the freehold assets. It diminishes the value of the freehold and thus their charges.
The completion of the training ground upgrade also remains problematic.
We can but hope/ expect the business acumen of any prospective owners allows them the resources and the protection to take the club forward to a future more commensurate with its history.
The change in executive control has to be seen as a significant step in the right direction but the "influence" of the currently remote and potentially future dormant investor needs to be removed.
The departure of Ms Meire was a prerequisite for moving forward. There have been comments enough on here and elsewhere concerning her future. It was long overdue for her and is time for us to move on.
I understand and respect for some, due to their direct personal experiences, it will not be easy but in truth if few of us would wish to be defined by 4yrs of our working life why would you want to waste anymore time on her.
It is time to consign this administration, no matter the possibility of carrying a dormant investor along for the ride, to history.
No matter our respective judgements of the past 4 yrs it is time to draw a line under those experiences. There is nothing to be gained in any further division. We must now look forward. If we do not not I fear we may as well all just pack up our emotional and social baggage and stay home with our memories and dreams of what may have been.
It does not mean we are not entitled to our opinions and our own value sets but the division that has been riven through our ranks has gone on too long.
A new administration, a fresh approach and a clean slate gives us all the chance to come together to help the club move forward.
It will be a massive challenge for a massive club!
Angeldust confirming what we know on the other site. 3 bids. Aussies pissed off with bidding war. One bid from someone Roland trusts and the other from mega rich but refusing to budge on what they consider is the correct price for the club. Someway to go me thinks.
Angeldust confirming what we know on the other site. 3 bids. Aussies pissed off with bidding war. One bid from someone Roland trusts and the other from mega rich but refusing to budge on what they consider is the correct price for the club. Someway to go me thinks.
Angeldust confirming what we know on the other site. 3 bids. Aussies pissed off with bidding war. One bid from someone Roland trusts and the other from mega rich but refusing to budge on what they consider is the correct price for the club. Someway to go me thinks.
Angeldust confirming what we know on the other site. 3 bids. Aussies pissed off with bidding war. One bid from someone Roland trusts and the other from mega rich but refusing to budge on what they consider is the correct price for the club. Someway to go me thinks.
That rules out probably the 3 days option
3 weeks or 3 months.
Though the someone Roland trusts bit fills me with dread!
Angeldust confirming what we know on the other site. 3 bids. Aussies pissed off with bidding war. One bid from someone Roland trusts and the other from mega rich but refusing to budge on what they consider is the correct price for the club. Someway to go me thinks.
Angeldust confirming what we know on the other site. 3 bids. Aussies pissed off with bidding war. One bid from someone Roland trusts and the other from mega rich but refusing to budge on what they consider is the correct price for the club. Someway to go me thinks.
Has to be Murray
Murray couldn't afford to own the club before, why would he try to buy it back?
Angeldust confirming what we know on the other site. 3 bids. Aussies pissed off with bidding war. One bid from someone Roland trusts and the other from mega rich but refusing to budge on what they consider is the correct price for the club. Someway to go me thinks.
Has to be Murray
Murray couldn't afford to own the club before, why would he try to buy it back?
Could be heading up a consortium. Although I doubt it.
Angeldust confirming what we know on the other site. 3 bids. Aussies pissed off with bidding war. One bid from someone Roland trusts and the other from mega rich but refusing to budge on what they consider is the correct price for the club. Someway to go me thinks.
Only one person that old scroat trusts enough...............Ms KM.
Angeldust confirming what we know on the other site. 3 bids. Aussies pissed off with bidding war. One bid from someone Roland trusts and the other from mega rich but refusing to budge on what they consider is the correct price for the club. Someway to go me thinks.
Angeldust confirming what we know on the other site. 3 bids. Aussies pissed off with bidding war. One bid from someone Roland trusts and the other from mega rich but refusing to budge on what they consider is the correct price for the club. Someway to go me thinks.
Has to be Murray
Murray couldn't afford to own the club before, why would he try to buy it back?
Obviously a consortium if he were to be involved, he doesn't have the cash himself.
Am I right in thinking there may be ex directors out there, due money, who are prepared to use their position to urge people to do what is best for Charlton Athletic Football Club?
This all reminds me of Raheem Sterling’s house near Liverpool which he spent one and a quarter million pounds to buy, then spent further hundreds of thousands to decorate it to his taste. When he transferred to Man City he moved, putting his old house on the market, expecting it to now be worth the original house value plus the cost of all the tat that he had added to it.
A year later it remained unsold (might still be on the market for all I know), despite being priced at £50k less than it was when he bought it.
Surprisingly, people do not want a Michael Jackson themed bar, a built-in barber’s or a kitchen that looks like a 1990s Benidorm nightclub. It is only going to be worth what someone is willing to pay.
This all reminds me of Raheem Sterling’s house near Liverpool which he spent one and a quarter million pounds to buy, then spent further hundreds of thousands to decorate it to his taste. When he transferred to Man City he moved, putting his old house on the market, expecting it to now be worth the original house value plus the cost of all the tat that he had added to it.
A year later it remained unsold (might still be on the market for all I know), despite being priced at £50k less than it was when he bought it.
Surprisingly, people do not want a Michael Jackson themed bar, a built-in barber’s or a kitchen that looks like a 1990s Benidorm nightclub. It is only going to be worth what someone is willing to pay.
So what you are saying is that no one would pay £50,000,000 for some hexagonal netting, a trench in Eltham, some unconnected pipes under a pitch, a host of injured footballers and a Third Division fixture list.
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This morning I had £10 in my wallet, then I bought a sandwich for £4, but I dropped it. Then I lost my wallet, with all my change in it.
Now @NapaAddick owes me $25.
Is that right?
So if debt was £21.6m the value of the equity must have been minus £7.6m. That would be consistent with the valuation of the core business generating revenue less than operating costs.
Introducing more debt and worsening the negative cash flow simply lowers the value of the equity in order to arrive at an Enterprise Value anyone would pay to inherit the existing debt given the need to invest new cash to support the core business until its fortunes were turned round.
If you argue you cannot have zero equity value, then the Enterprise Value is entirely the debt of £55.6m which is where I suggest he is getting his sale price.
Logically a buyer would argue that the only debt that has value is the debt which increases the share price by increasing the asset value. In this case it's how far it has succeeded in improving a negative equity valuation since RD bought the club. The rest of the debt funded operating losses and maintenance costs and has no impact apart from minor impact on asset price write down.
I reckon @cabbles £20m is about right. £14m to buy the same debt RD bought and £6m for the added asset value from RD's further cash advances. He either takes a haircut or an annual shave that includes his scalp. It wouldn't take long for him to burn another £30m/£40m/£50m, so he might as well burn £30m now in one go and walk away.
Let's be thankful we are finally seeing changes to the clubs administration but be mindful there maybe no quick fix here.
People are right to be cautious about how the club & grounds futures will be secured going forward and the ambitions, acumen & resources of any prospective new investors.
I appreciate the Davidsmith & NLA contributions. CharltonParkLane read no more.
The apparent influence of the former directors should be noted. Unless someone is prepared to repay them they may offer the so badly needed checks & balances.
Their charges over Batons fixed assets is due diligence 101. If the issue has not received due attention, there are 2 areas of interest.
The first is the nature of the charges. They will specify whether, in the event of a change of ownership and/or use of assets their formal consent is required. It is a grey area. It would be exceptional for any legal professional to overlook such charges. It is a matter of basic disclosure.
Their importance in terms of any EXIT plan may however have received insufficient attention. The absence of a defined exit plan is not uncommon (see Brexit). M Duchatelet has "previous" with his Ujpest investment. The distraction of having to deal with BVI corporate law and the convoluted ownership of Slater/ Jiminez/ Cash (& related family trusts) may have presented a bit of a challenge.
Now comes the nature of the current deal being negotiated. If it includes the retention of any part of the debt to Staprix, then will the future repayment of such debt be positioned before or after repayment of former director loans?
I can imagine former directors possibly willing to further extend their loans demurring at the prospect of Staprix debts being settled before theirs particularly if any deal involves RD retaining any influence over the clubs future trading ability.
Having long seen the obsessive self importance of this regime I can see them having simply assumed the former directors and their loans would "roll over".
Napa thank you for your valuation. There is no evidence of any payment made by Staprix with regard to the Batons assets beyond the assumption of debt.
The Enterprise valuation you create positions debt as an asset. With respect such interpretation was one of the contributing factors seen in the 2008 financial collapse. It was essentially based on the premise any given business must be worth the value of the debt because someone was prepared to lend the amount to the company in the first place.
There were however 3 conditions which come with it a) the lender was satisfied with the collateral held b) the use of the debt c) the corporate revenues generated were sufficient to carry and ultimately repay such debt.
None of those conditions apply.
It is why the Glaziers were in so much trouble with Man U as they leveraged everything they could get their hands on and then spent years restructuring the debt to rid themselves of the usury rates they had locked into. Needless to say Man U revenues are somewhat different to CAFC.
If CPL & Henry will forgive me on what basis/ trading profile/ revenue generation/ investment return/ yield would you recommend investing £75-£80mn in acquiring the assets of Baton noting the scale of further investment required to maximise industry trading revenues. What would be your exit plan for such investment?
I can but contend it is unlikely any investor and or corporate investment risk manager will pay M Duchatelet even the reported £50mn up front for the assets of the club no matter the industry projections.
The challenge is, as evidenced above and compounded through his inept administration, how can he keep any " skin in the game" to maximise his returns when the skin is already spread beyond thin. The only control he can exert, beyond my 15/12 comments, is by keeping The Valley and Sparrows Lane under the ownership of Staprix.
The terms of any such arrangement will be key though in reality Staprix through its "ownership" has ultimately been no more than the clubs bankers. So in fact we are virtually already there. The club today has a 150/ 200% plus "mortgage" on its assets. The club just pays interest rather than rent.
Staprix in retaining the ownership of the Baton assets will still face the same problems in that they are still a) diminished by the prior charges b) exceptionally difficult to realise c) unlikely to secure sufficient funds to clear their debt.
No matter the endless double speak in the world of football finance this is where "the rubber hits the road". In essence the debt (as is) is beyond redemption. So just where does Duchatelet and more importantly the club go from here.
No matter the relative stability seen this season his game plan has failed in terms of diminished playing status, financial performance, market penetration and liquid asset values.
None but the man himself can know how he will want to draw a line under his sojourn through European football.
We have to face the possibility an extended extraction from the situation.
If Staprix retains the fixed assets of Baton as security for its outstanding debt then, depending on the terms of the deal, a new administration can still secure a platform to use those assets to take the club forward.
Indeed M. Duchatelet now needs someone else to do the heavy lifting providing new working capital, a fresh approach and a more appropriate level of industry expertise.
The investment return today set at 3% by way of interest charges is not sustainable. It never was. The challenge remains in restructuring the arrangement to convert any investment return to a facilities/ ground rental which is acceptable to the new administration. It will require security of tenure.
Such a solution is problematic. The creation of a lease would require the consent of the former directors holding the charges over the freehold assets. It diminishes the value of the freehold and thus their charges.
The completion of the training ground upgrade also remains problematic.
We can but hope/ expect the business acumen of any prospective owners allows them the resources and the protection to take the club forward to a future more commensurate with its history.
The change in executive control has to be seen as a significant step in the right direction but the "influence" of the currently remote and potentially future dormant investor needs to be removed.
The departure of Ms Meire was a prerequisite for moving forward. There have been comments enough on here and elsewhere concerning her future. It was long overdue for her and is time for us to move on.
I understand and respect for some, due to their direct personal experiences, it will not be easy but in truth if few of us would wish to be defined by 4yrs of our working life why would you want to waste anymore time on her.
It is time to consign this administration, no matter the possibility of carrying a dormant investor along for the ride, to history.
No matter our respective judgements of the past 4 yrs it is time to draw a line under those experiences. There is nothing to be gained in any further division. We must now look forward. If we do not not I fear we may as well all just pack up our emotional and social baggage and stay home with our memories and dreams of what may have been.
It does not mean we are not entitled to our opinions and our own value sets but the division that has been riven through our ranks has gone on too long.
A new administration, a fresh approach and a clean slate gives us all the chance to come together to help the club move forward.
It will be a massive challenge for a massive club!
Now where have I heard that before?
All figures are purely financial modelling.
Any queries, please refer to @Henry Irving who has several powerpoint presentations that may or may not be a suitable reference point.
Mega rich ? That'll do !
3 weeks or 3 months.
Though the someone Roland trusts bit fills me with dread!
This all reminds me of Raheem Sterling’s house near Liverpool which he spent one and a quarter million pounds to buy, then spent further hundreds of thousands to decorate it to his taste. When he transferred to Man City he moved, putting his old house on the market, expecting it to now be worth the original house value plus the cost of all the tat that he had added to it.
A year later it remained unsold (might still be on the market for all I know), despite being priced at £50k less than it was when he bought it.
Surprisingly, people do not want a Michael Jackson themed bar, a built-in barber’s or a kitchen that looks like a 1990s Benidorm nightclub. It is only going to be worth what someone is willing to pay.