[Archived] Rovers Might Have Been Sold?

[dave birch]

I am quietly excited about this one.

Philip, I've gone from being excited by the prospect to being somewhat cynical. I'm not so sure about it at all.

[Iceman]

Nice try Iceman, but McCabe are an Irish company with hundreds of building projects worldwide.

you stole my avatar?

yes i know that, just threw in that, because it mentioned some English places

[koi]

Reading the Telegraph article it does state that Shah is proposing to use his own money for this, a crucial factor if true.

[imy9]

To me it's cashflow, the TV money has to be very attractive to a debt financing company. If the gearing ratio of his own company is 91% then I dread to think what he'd do to a football club.

I may have misread this but in the article it states:

The company's 2009 annual report shows debt of $1.089bn in the form of an unsecured loan bearing no interest made by Mr Ali to the company, and total capital of $102.67m, resulting in a gearing ratio of 91.38 per cent.

So the guy himself has given the company a loan of over a BILLION- how much money does he have!?

[Iceman]

Sod the avatar, Please, Please get him a statue LucaToni for his front garden.

, hey, dont mess with the Luca Toni idea

[Earlydoors]

To me it's cashflow, the TV money has to be very attractive to a debt financing company. If the gearing ratio of his own company is 91% then I dread to think what he'd do to a football club.

I like your thinking... on the reason behind the move. That's why Warren Buffet moved into insurance in 70s because of the cashflow. It would allow him to massively expand his assets under control. One word.

AVOID.

Besides we couldn't spend all day arguing about Andrews............

[Iceman]

I am not being critical. I am trying to find more out about the guy. Is there something wrong with that?

The big question here surely is WHY?

And, by the way, when did I 'support' Williams, Ronnie, the Altrincham mate of Brad's, Shah or the Thais...not to mention the Middle East people?

Growth Opportunity, well thats according to the article. Not sure how he plans to do that, but we shall see.

BTW Alan, you did previously mention that there were more than one interested party, so why are you surprised that this has come up? Did you not know about Syed's interest?

[Majiball]

Any of these ?

Ranking Club Debt

1. Manchester United £716m

2. Chelsea (Limited) £701m

3. Valencia C.F £501m

4. Liverpool £351m

5. Real Madrid £296m

6. FC Barcelona £273m

7. AS Roma £271m

8. Schalke 04 £234m

9. Arsenal £203m

10. Fulham £198m

Read more: http://soccerlens.com/the-football-debt-league-top-10-most-indebted-clubs/50035/#ixzz0vdDSwW7y

It's a nice idea, I just don't think there is any evidence that football clubs can make money.

Even those with famed Academies like Ajax are 25m Euros in debt

http://www.imscouting.com/global-news-article/Ajax-25m-in-debt-but-dont-have-to-sell-players/6621/

The way I see it - If you want to invest money to make money - you shouldn't put it in a football club.

People 'invest' in football clubs to have their egos massaged and gain exposure.

None of those clubs really fit into the statement I made do they?

Ajax I would look towards they may have 25million debt (don't we have 20million?), but selling suarez would plug that hole and another would step into the breach.

I'm talking about clubs like Porto, wiser management could see the 300Million they have made in player sales, profitable long term. It would require not only a first rate academy, but a scouting network of that class as well. You just don't want to end up like Porto with 60+ players on your books.

But its not just about debt its that against the value of the club as a whole.

[nicko]

BTW Alan, you did previously mention that there were more than one interested party, so why are you surprised that this has come up? Did you not know about Syed's interest?

There was an American group hanging around who were - supposedly - still in the frame while Shah was trying to get his act together.

I had never heard of Syed until this morning.

Just puzzled about some things around this. Like, why. And how did it come out...in exactly the form it was used in the Daily Telegraph and elsewhere?

I wonder what Shah and his pals make of this. If HE has money behind him they won;t want to be beaten to the purchase.

Genuinely interesting times.

[Martin]

http://www.arabianbusiness.com/594148-bahrain-investment-firm-eyes-blackburn-rovers-buyout

A little more.

[Balwer]

http://www.westerngulfadvisory.com/Annual_Report_2009/

Key points

Syed has 90% shareholding in the company, the other 10% is to a company which I imagine represents the rest of the management team.

The gearing level is high (91%) however all the loans are in the form of related party, so this is effectively equity, therefore in reality there is no gearing.

The 1bn in related party loans are given under the name of Ahsan Ali Syed, so it has either come from him and his family or been provided to him outside the business.

The majority of the revenue was generated from advisory fees. This is standard practice for asset management firms and normally represents 1-2% of the total funds managed on an annual basis. There is also however a 10m franchise fee, I am unsure of the details of this however.

There is not £8bn available, there is $850m available to invest, $500m of which has apparently been allocated in two separate, interest-bearing loans, the $350m is 'dry powder'. There are no details of where these loans are invested.

To summarise, a very-rich or very well-financed man has started his own asset management firm, focusing on debt-financing. He has invested $850m into the company. All his revenue appears to have been generated as fees from his own capital, while $500m appears to have been loaned out to two separate businesses. There does not seem to be a clearly stated focus or vision for the business, and nobody at my office here in London has heard of them.

[nicko]

I don't want to copy Balwer's info to clutter the board...but that is very revealing. Brilliant work.

[beerwins]

There was an American group hanging around who were - supposedly - still in the frame while Shah was trying to get his act together.

I had never heard of Syed until this morning.

Just puzzled about some things around this. Like, why. And how did it come out...in exactly the form it was used in the Daily Telegraph and elsewhere?

I wonder what Shah and his pals make of this. If HE has money behind him they won;t want to be beaten to the purchase.

Genuinely interesting times.

I have to agree that the main question that is on my mind to is why does he want to buy?

I suppose the same question could have been asked to the Arabs that bought Man city too, I bet that still remains an unanswered question.

[Earlydoors]

I'm talking about clubs like Porto, wiser management could see the 300Million they have made in player sales, profitable long term.

It's a good call. I hadn't appreciated they had been so successful - but the inference is that even they are struggling against debt. If it was easily achievable then more clubs would be doing it.

The way I see it, if I had £300m and I wanted it to make more money, I wouldn't put it in to football.

I'm going with the earlier call - this guy has access to credit - the cashflow from a Premier league team will allow him to get credit to much more.

[RevidgeBlue]

I like your thinking... on the reason behind the move. That's why Warren Buffet moved into insurance in 70s because of the cashflow. It would allow him to massively expand his assets under control. One word.

AVOID.

There's always the risk that anyone taking the Club over might have their beady eye on our 50m p.a. income, but the reality is 90% of that is already accounted for and goes straight out in player wages so I doubt these days any lending institution would allow any prospective new owners to run up huge borrowings on that basis. Don't know if it would be technically possible to get a huge loan secured against Brockhall.

As for asset stripping the playing side, bad news for you fellas. The Trustees beat you to it.!

[philipl]

Depends on what sort of debt it is though:

Ranking Club Debt

1. Manchester United £716m - £220m of it very dangerous and extremely expensive PIK stuff; the rest is a long term debenture which I can only see being repaid by them taking out another debenture. Interest is costing them the chance of being able to kick sand in Spanish eyes in the transfer market.

2. Chelsea (Limited) £701m - owner debt now transferred off the Chelsea books; not dangerous and not there any more.

3. Valencia C.F £501m - local banks and regional government debt becoming increasingly dangerous as the Spanish economy tanks.

4. Liverpool £351m - apparently will be paid off by new owner Huang two weeks from now

5. Real Madrid £296m - probably nearer £500m now; see Valencia

6. FC Barcelona £273m - probably nearer £500m now; see Valencia

7. AS Roma £271m - in imminent danger of going bust

8. Schalke 04 £234m - manageable tied to development

9. Arsenal £203m - not dangerous now Highbury Village is selling well; cost of Emirates Stadium which is a money machine (they have had two 60,000 gates for friendlies last week!)

10. Fulham £198m - owner debt; not dangerous as Al Fayed has got interested again and has just received £1.5bn for Harrods.

How the take over is financed and the safeguards required is something the Trust and Rothschilds will be currently working on.

Balwer, the sequence of a normal bid is:

1) Bidder does homework on public material

2) Bidder approaches target outlining ideas- if interested, NDAs get signed

3) Bidder evaluates material received in confidence

4) Bidder submits conditional offer

5) Target evaluates and negotiations happen

6) If conditional offer (perhaps revised after negotiation) is accepted, period of exclusivity to undertake due diligence is granted.

7) If due diligence does not produce any problems, the agreed conditional deal goes unconditional.

8) Takeover.

Stages 1 to 4 have happened with Mr Ali and stage 5 is under way.

Stages 1 to 3 have happened with Mr Shah and the Trust/Rothschilds have told him what the minimum in stage 4 has to be for him to proceed to later stages.

I believe the terms on which the club has developed the Brockhall training facilities preclude:

- any residential development on any of the land the club owns (which is more than the training area)

- any change of use of the built-up area the club owns away from leisure facilities

[Balwer]

I don't want to copy Balwer's info to clutter the board...but that is very revealing. Brilliant work.

Thanks Nicko, it's not that hard when you do it for a job though, just have to know what to look for. Like I said the guy appears to have serious asset backing but it's where that capital is deployed that I am concerned about, as the details are vague, and there is no indication that these guys have a proven record in asset management. As you mention, the timing is very suspicious. Hopefully we will learn more in due course.

[American]

Thanks Nicko, it's not that hard when you do it for a job though, just have to know what to look for. Like I said the guy appears to have serious asset backing but it's where that capital is deployed that I am concerned about, as the details are vague, and there is no indication that these guys have a proven record in asset management. As you mention, the timing is very suspicious. Hopefully we will learn more in due course.

Are you describing the new guys, or Plainfield/Williams?!?

[dave birch]

Are you describing the new guys, or Plainfield/Williams?!?

I think it smells a bit of that, with a dash of curry powder.

[nicko]

Thanks Nicko, it's not that hard when you do it for a job though, just have to know what to look for. Like I said the guy appears to have serious asset backing but it's where that capital is deployed that I am concerned about, as the details are vague, and there is no indication that these guys have a proven record in asset management. As you mention, the timing is very suspicious. Hopefully we will learn more in due course.

The guy could be genuine. He seems a player in the world of business...with the Irish and Aussie things happening right now too.

However I don't see any football background in him or his team or allies [yet] and wonder what his motivation is.

Many Premier League clubs have been bought for strange reasons recently. This fella may be legit. But who knows?

[Iceman]

so where to from here? It all sounded so good this morning, but now it doesnt. Typical i suppose, there has to always be something wrong.

The lady Kamy spoke to, mentioned that they want to a deal in place very soon, so surely due dilligence has been reached already, right?

[Balwer]

Are you describing the new guys, or Plainfield/Williams?!?

Long time no speak! Difference between the two, from what I can tell, is:

Syed appears to be a lot wealthier than Williams, although it's hard to ascertain specifics

Plainfield has a longer track-record as an asset management company than WGA (with varying success levels)

[American]

Long time no speak! Difference between the two, from what I can tell, is:

Syed appears to be a lot wealthier than Williams, although it's hard to ascertain specifics

Plainfield has a longer track-record as an asset management company than WGA (with varying success levels)

Fancy a train ride to Birmingham in a couple of weeks?

Think it will come down to how the money is invested - as a loan or an outright investment.

[rog of the rovers]

As said many times before,

In John Williams we trust.

If the fears some board members have are true, then its up to the chairman/trust to ask the important questions.

If we get taken over, I will be chuffed, but will have expected the club to have got assurances before accepting the deal.

The problems at Portsmouth started with Mandaric selling to Gaydamak. The rest was just a domino effect.

(Post - 1300 WHEY!!!!)

[Balwer]

Fancy a train ride to Birmingham in a couple of weeks?

Think it will come down to how the money is invested - as a loan or an outright investment.

Sadly going to be in Morocco that weekend or I would be up for it.