The Takeover Thread - Duchatelet Finally Sells (Jan 2020)

Pollocks

Nimer certain likes fishing for Instagram Likes!

Trawling for likes 

Best time for fishing= caught the haddocks 

Code cracked

Scratchingvalleycat said:

The last published  accounts show debts of £71m which were not due to be repaid within one year. This event could merely  be Roland capitalising some of the debt, ahead of sale into shares.  When the change of control happens  a form PSC02 will need to be filed to show who is the new controller of the shares (currently the confirmation statement identifies Roland D as the ultimate controller even though the shares are held by Baton 10 Limited which in turn is owned by ..... Staprix which is in turn s controlled by RD) The reasons for capitalising the debt may be many  such as the loss made int he current year against . However, East Street Inestments is still only showing one director and issued capital of £1. All of this will change when the  EFL  stop mucking around and pull their finger out.

This looks right to me.  Although the shares are issued for cash only, a controlling director can surely convert his own loan to equity at any point - he's not a third party creditor that would cause a change of share ownership.  I'm not an accountant, so apologies if I have this wrong.  

That wouldn't change the price of the club, just the structure of the balance sheet.  I don't think it changes stamp duty either, as that would be payable on the total price, including the value of the land?

This would potentially give the football company headroom on FFP rules under Rule 4.2.2, settlement of liabilities by a Related Party.  These would be treated under the allowable equity contribution rules and then have to be less than the rules allow and transferred 'at fair value'.

https://www.efl.com/-more/governance/efl-rules--regulations/appendix-5---financial-fair-play-regulations/ 

Appendix F, specifically says: 

2.2 Contributions from a Related Party include:

2.2.1 capital contributions being a contribution by a Related Party that is an unconditional gift made to the Championship Club by a Related Party which increases the Championship Club’s equity without any obligation for repayment or to do anything in consideration for receiving them. This is an increase in equity and typically, such amounts are recorded in a separate reserve, often known as the ‘capital reserve’. For example, a permanent and unconditional waiver of inter-company or Related Party debt must be treated as a capital contribution, as it results in an increase in equity; 

As far as I know, any historical losses have been funded only by loans from RD and are currently running under the FFP rules rate of investment?  The three year rule still seems to apply for any 'member club', i.e. on a rolling average over the last three years, regardless that we are a promoted club, in which case GBP 21m should be within those limits.

As stated by many on there, the only person that can put equity in right now is RD and he wouldn't put that money at risk  ('unconditional gift ... which increases equity') unless he was certain he was about to back it straight out to a new owner ....

There are people who are accountants on here (though I do work in the private equity industry) and understand the EFL rules in more detail, so apologies if I have the wrong end of the stick on this and happy to be corrected ....

I'm working on a couple of transactions right now and we would normally aim to complete on 31st December ....

i_b_b_o_r_g said:

iamdan said:

‘The best time for fishing’ 

ITS NOT HAPPENING!!

Reckon it's code mate. Rearrange the letters and you get -

"HIS TIMES BE FORTNIGHT, EF(L)" 

He obviously couldn't fit the "L" in

You do like an anagram don't you mate 😉. 

Numbers said:

RedChaser said:

i_b_b_o_r_g said:

iamdan said:

‘The best time for fishing’ 

ITS NOT HAPPENING!!

Reckon it's code mate. Rearrange the letters and you get -

"HIS TIMES BE FORTNIGHT, EF(L)" 

He obviously couldn't fit the "L" in

You do like an anagram don't you mate 😉. 

They don't call him Grobib for nothing

Or big rob

WishIdStayedinthePub said:

Scratchingvalleycat said:

The last published  accounts show debts of £71m which were not due to be repaid within one year. This event could merely  be Roland capitalising some of the debt, ahead of sale into shares.  When the change of control happens  a form PSC02 will need to be filed to show who is the new controller of the shares (currently the confirmation statement identifies Roland D as the ultimate controller even though the shares are held by Baton 10 Limited which in turn is owned by ..... Staprix which is in turn s controlled by RD) The reasons for capitalising the debt may be many  such as the loss made int he current year against . However, East Street Inestments is still only showing one director and issued capital of £1. All of this will change when the  EFL  stop mucking around and pull their finger out.

This looks right to me.  Although the shares are issued for cash only, a controlling director can surely convert his own loan to equity at any point - he's not a third party creditor that would cause a change of share ownership.  I'm not an accountant, so apologies if I have this wrong.  

That wouldn't change the price of the club, just the structure of the balance sheet.  I don't think it changes stamp duty either, as that would be payable on the total price, including the value of the land?

This would potentially give the football company headroom on FFP rules under Rule 4.2.2, settlement of liabilities by a Related Party.  These would be treated under the allowable equity contribution rules and then have to be less than the rules allow and transferred 'at fair value'.

https://www.efl.com/-more/governance/efl-rules--regulations/appendix-5---financial-fair-play-regulations/ 

Appendix F, specifically says: 

2.2 Contributions from a Related Party include:

2.2.1 capital contributions being a contribution by a Related Party that is an unconditional gift made to the Championship Club by a Related Party which increases the Championship Club’s equity without any obligation for repayment or to do anything in consideration for receiving them. This is an increase in equity and typically, such amounts are recorded in a separate reserve, often known as the ‘capital reserve’. For example, a permanent and unconditional waiver of inter-company or Related Party debt must be treated as a capital contribution, as it results in an increase in equity; 

As far as I know, any historical losses have been funded only by loans from RD and are currently running under the FFP rules rate of investment?  The three year rule still seems to apply for any 'member club', i.e. on a rolling average over the last three years, regardless that we are a promoted club, in which case GBP 21m should be within those limits.

As stated by many on there, the only person that can put equity in right now is RD and he wouldn't put that money at risk  ('unconditional gift ... which increases equity') unless he was certain he was about to back it straight out to a new owner ....

There are people who are accountants on here (though I do work in the private equity industry) and understand the EFL rules in more detail, so apologies if I have the wrong end of the stick on this and happy to be corrected ....

Grateful to the people with more knowledge than me of this stuff for their posts on this subject - this seems a feasible explanation although as it doesn’t involve RD doing anything in the real world and he still owns the club I am not sure there is any risk to him entailed. If he has an agreed sale price for Baton that reflects the Staprix loan and wipes the debt it presumably won’t really matter to him whether it is equity or debt at the point of sale.

If the sale then collapsed it isn’t as if he has committed any new funds and he is still in control of the price at which he offers Baton for sale.

I’m not sure, mind you, that there will any loss in the current year to date to convert. If there is, it will be low seven figures.

WishIdStayedinthePub said:

Airman Brown said:

WishIdStayedinthePub said:

Scratchingvalleycat said:

The last published  accounts show debts of £71m which were not due to be repaid within one year. This event could merely  be Roland capitalising some of the debt, ahead of sale into shares.  When the change of control happens  a form PSC02 will need to be filed to show who is the new controller of the shares (currently the confirmation statement identifies Roland D as the ultimate controller even though the shares are held by Baton 10 Limited which in turn is owned by ..... Staprix which is in turn s controlled by RD) The reasons for capitalising the debt may be many  such as the loss made int he current year against . However, East Street Inestments is still only showing one director and issued capital of £1. All of this will change when the  EFL  stop mucking around and pull their finger out.

This looks right to me.  Although the shares are issued for cash only, a controlling director can surely convert his own loan to equity at any point - he's not a third party creditor that would cause a change of share ownership.  I'm not an accountant, so apologies if I have this wrong.  

That wouldn't change the price of the club, just the structure of the balance sheet.  I don't think it changes stamp duty either, as that would be payable on the total price, including the value of the land?

This would potentially give the football company headroom on FFP rules under Rule 4.2.2, settlement of liabilities by a Related Party.  These would be treated under the allowable equity contribution rules and then have to be less than the rules allow and transferred 'at fair value'.

https://www.efl.com/-more/governance/efl-rules--regulations/appendix-5---financial-fair-play-regulations/ 

Appendix F, specifically says: 

2.2 Contributions from a Related Party include:

2.2.1 capital contributions being a contribution by a Related Party that is an unconditional gift made to the Championship Club by a Related Party which increases the Championship Club’s equity without any obligation for repayment or to do anything in consideration for receiving them. This is an increase in equity and typically, such amounts are recorded in a separate reserve, often known as the ‘capital reserve’. For example, a permanent and unconditional waiver of inter-company or Related Party debt must be treated as a capital contribution, as it results in an increase in equity; 

As far as I know, any historical losses have been funded only by loans from RD and are currently running under the FFP rules rate of investment?  The three year rule still seems to apply for any 'member club', i.e. on a rolling average over the last three years, regardless that we are a promoted club, in which case GBP 21m should be within those limits.

As stated by many on there, the only person that can put equity in right now is RD and he wouldn't put that money at risk  ('unconditional gift ... which increases equity') unless he was certain he was about to back it straight out to a new owner ....

There are people who are accountants on here (though I do work in the private equity industry) and understand the EFL rules in more detail, so apologies if I have the wrong end of the stick on this and happy to be corrected ....

Grateful to the people with more knowledge than me of this stuff for their posts on this subject - this seems a feasible explanation although as it doesn’t involve RD doing anything in the real world and he still owns the club I am not sure there is any risk to him entailed. If he has an agreed sale price for Baton that reflects the Staprix loan and wipes the debt it presumably won’t really matter to him whether it is equity or debt at the point of sale.

If the sale then collapsed it isn’t as if he has committed any new funds and he is still in control of the price at which he offers Baton for sale.

True - it doesn't stop him taking the money out again.  I'm still not totally sure what I outlined really helps in terms of FFP rules, but I can't help thinking it has something to do with completion.

I don’t think you can retrospectively improve your FFP position by converting loans from previous years, so perhaps it doesn’t work as an idea. Maybe it’s a mechanism to show proof of funds as has also been suggested. I think it’s clear the EFL have had doubts.

The Fishing picture has no bearing on the takeover.


It's just a Red Herring.

guinnessaddick said:

i_b_b_o_r_g said:

He's into his fishing, might offer to be his personal gillie down the Thames -

How long before someone photoshops the Thames barrier on it, instead of the bridge?

I bet Stig is working on it right now .....

Some of these puns are awful.

This hakeover can’t come quickly enough.

Takeover sounds imminent, I can fillet in me waters.

Well I am going to ignore this thread for a couple of days...  just for the Hallibut