[Archived] Barclays Mortgage or Charge

[Herbie6590]

The original post in this thread says :-

"Charged Property" means all the assets, rights and revenues whatsoever (present and future) of the Assignor as are assigned (or agreed so to be) under the Assignment

...so doesn't that actually mean "all the assets that are listed in a schedule somewhere attached to this document" as opposed to "all the assets of BRFC" ?

e.g. to secure a charge over property that would also need to be registered at the Land Registry......it strikes me that this is potentially a relatively quick & simple way of getting a "cash advance" i.e. the Glass Half Full option - it could be argued that this is little different from invoice discounting ?

http://en.wikipedia.org/wiki/Invoice_discounting

[Majiball]

Didn't someone once mention on here that there were restrictions in place on how much money you can shift out of India in one lump sum?

I wonder if this is something to do with getting round that?

If they can only shift X amount every X number of months and want to spend more than that, perhaps this is how they are doing it?

[Kelbo]

The original post in this thread says :-

"Charged Property" means all the assets, rights and revenues whatsoever (present and future) of the Assignor as are assigned (or agreed so to be) under the Assignment

...so doesn't that actually mean "all the assets that are listed in a schedule somewhere attached to this document" as opposed to "all the assets of BRFC" ?

e.g. to secure a charge over property that would also need to be registered at the Land Registry......it strikes me that this is potentially a relatively quick & simple way of getting a "cash advance" i.e. the Glass Half Full option - it could be argued that this is little different from invoice discounting ?

http://en.wikipedia.org/wiki/Invoice_discounting

I think one of the key points here is it is summised the owners were unaware of the PL payments not being made until May or whenever, if this is the case, then surely one or some of their advisors were a little incompetant?

[philipl]

Phillip what are Villa's company house records like? I ask as Lerner seems be worth in the region of our owners, whereas City are on a whole other level!

I haven't checked Villa's filings but there is a huge difference between Lerner and Venky's.

Lerner has cashed out his $2bn. The only way you can remotely get Venky's to $2bn is by extrapolating a hugely volatile share price on Venky's India Limited (12 month low 200, 12 month high 850, current price 600) across a range of private holdings.

With the best will in the world, that is not cash and the fact the Venkys are not cash rich is now reflected in so many aspects of their dealings with Rovers.

I will say one thing in their favour.

Sheikh Mansoor's expenditure on City does not even amount to the interest on the interest he earns on his wealth.

I strongly suspect that the Rao family are ploughing their own capital into Rovers which is a huge commitment for them to be making. But it does mean the situation would be parlous both for them and for us if things go wrong which is why taking huge risk decisions removing both the administrative and football management of a club everybody recognised was working well looks from my perspective to be reckless.

[Exiled in Toronto]

Didn't someone once mention on here that there were restrictions in place on how much money you can shift out of India in one lump sum?

I wonder if this is something to do with getting round that?

If they can only shift X amount every X number of months and want to spend more than that, perhaps this is how they are doing it?

I wondered that. Also they would have to consider exchange rates would they not which would certainly put me off shuttling money in and out of the UK just because of cash flow

[Balwer]

Thanks for posting this Paul.

[cravenblue]

As somebody said earlier, laymans terms please

[philipl]

It means it looks like Rovers are taking on more debt which if it is not repaid, Barclays Bank can take the club's Sky money this season and sell off the ground and Brockhall.

[cravenblue]

Bugger!

[92er]

I attended the AGM before Christmas partly because I expected it to be the last i could attend.

When a shareholder raised a question about minority shareholders not accepting the offer, 1 of the Directors stated that the new owners, if they thought fit, could allow those shareholders to have an equivalent shareholding in the new company and therefore they would be able to attend future meetings.

A fellow, professional, shareholder was very sceptical this would happen.

If it were to happen it would be a means of obtaining information about the company.

[67splitscreen]

Perhaps this is the new way of doings things JW spoke about?

Does anyone know if we are to remain a PLC?

Good reason to be moved to one side if he was fighting it.

[Paul]

It means it looks like Rovers are taking on more debt which if it is not repaid, Barclays Bank can take the club's Sky money this season and sell off the ground and Brockhall.

Like many people I have difficulty in interpreting exactly what this document means, I know what it means to me but I'm very wary of putting that in to words. Philip because of his profession, will understand it far better than me. I suspect Balwer may also be able to do this though I would not wish to put words in his mouth. My personal understanding is this means Rovers have the facility available to borrow at least to the value of the PL earnings in the 2010/11 season, I'm less sure about the physical assets of the club.

To try and put this in plain English for those who are asking. If you have an overdraft limit of £1000 than you have "the facility to borrow up to £1000." Some months you may chose to use the "facility" (overdraft) other months you may not need to. Note this document is not an overdraft it is a charge or mortgage which is a different thing. I suppose the best analogy for us every day folk is your house. When you buy a house with a mortgage you actually "assign" the house to the building society/bank, if you default on repayment the building society/bank can take the house to sell and repay the loan. The "assignor" is the company or person borrowing and "assigning" the rights of the property or income over to the lender should there be a default on the repayment.

[Guest linganzi]

So then do we have problems?

[Kelbo]

It means it looks like Rovers are taking on more debt which if it is not repaid, Barclays Bank can take the club's Sky money this season and sell off the ground and Brockhall.

What idiots have taken over our club?

I cannot believe Rothschilds vetted these people first, they should be sued, if they can by the trust, just enough money to buy the club back ande give it to the fans, under strict control from JW.

[Guest linganzi]

Should sue the league. Some test. Nothing sits right, gone is our club it seems

[Paul]

So then do we have problems?

Not necessarily in my view. The club have the "facility" (i.e if wanted it can borrow) for a large amount of money. It's a business practice, there's nothing unusual in that, and quite a number of PL clubs appear to be running with a significant level of debt in one form or another. I wasn't previously aware Rovers ran debt in this particular form. I thought the club usually ran an overdraft.

[imy9]

Could someone in laymans terms explain the difference between Venkys debt management and the trusts?

[broadsword]

I wondered that. Also they would have to consider exchange rates would they not which would certainly put me off shuttling money in and out of the UK just because of cash flow

Maybe that is why they're borrowing against UK assets (ie, the club) rather than setting up a facility in India and transferring the cash.

It does worry me that there is a possibility that there isn't a reservoir of cash for Venky's to call on to fund their vision for Rovers, and instead they will attempt to do it on HP.

It's all pie-in-the-sky at the moment, but it is slightly disquieting.

[Tom]

Cheers for explaining it Philip it sounds ominous I'm still hoping (maybe ostrich like) that it doesn't come to the worst after all me worrying about it isn't going to make it better.

[philipl]

Before we start topping ourselves, it has to be stressed the new mortgage gives Barclays rights over the 2010/11 Sky money. This is not like Leeds selling the next 25 years of Premier League income which is what they did back in 2003.

That 2010/11 stipulation suggests this is a short term arrangement, or just that banks got wise to relegation risk.

However, if you take the book value of Rovers'assets plus the minimum payment we might receive from Sky, Barclays now have total security of in excess of £70m.

I am just hoping that in these financially screwed up times, Barclays have simply protected themselves several times over so they have the chance to grab whatever is easiest to hand if it comes to Rovers defaulting. So they would take the Sky cash first but if Rovers have done a Pompey or Leeds and already spent it before it arrived then they would grab Brockhall... So £70m of collateral might be backing £15m of debt if there is zero cash coming in before Sky cough up at the end of May.

However, the statements about not using debt look as reliable as the statement about retaining the existing management or the statement about the involvement of Kentaro.

[Exiled in Toronto]

Before we start topping ourselves, it has to be stressed the new mortgage gives Barclays rights over the 2010/11 Sky money. This is not like Leeds selling the next 25 years of Premier League income which is what they did back in 2003.

That 2010/11 stipulation suggests this is a short term arrangement, or just that banks got wise to relegation risk.

However, if you take the book value of Rovers'assets plus the minimum payment we might receive from Sky, Barclays now have total security of in excess of £70m.

I am just hoping that in these financially screwed up times, Barclays have simply protected themselves several times over so they have the chance to grab whatever is easiest to hand if it comes to Rovers defaulting. So they would take the Sky cash first but if Rovers have done a Pompey or Leeds and already spent it before it arrived then they would grab Brockhall... So £70m of collateral might be backing £15m of debt if there is zero cash coming in before Sky cough up at the end of May.

However, the statements about not using debt look as reliable as the statement about retaining the existing management or the statement about the involvement of Kentaro.

I'm confused. Where in that document did it mention Ewood (not that anyone would want to buy that) and Brockhall? I could only see a reference to the Sky money

[philipl]

I have seen a copy of the mortgage which obviously includes more than clauses 1 and 1.1 which are quoted here. It refers to "charged property" which on re-reading is referring back to the media income for 2010/11 rather than to physical property.

[imy9]

So to clarify Phillip they cannot take Brockhall or Ewood Park only sky money?

[philipl]

This is where it starts getting complicated.

On 22 September 2010, the Rovers filed DECLARATION OF SATISFACTION IN FULL OR IN PART OF A MORTGAGE OR CHARGE /FULL /CHARGE NO 7 and on 29 December 2010 they filed PARTICULARS OF A MORTGAGE OR CHARGE / CHARGE NO: 11 which is quoted here in this thread.

Under the mortgages taken out in 2001 and 2003, Rovers' bankers took security over the physical fixed assets and that was not fully satisfied by the September 2010 filing as far as I can tell.

There are no filings as yet by the Rovers that reflect the settlement of the Rovers debt which transferred to Venky's London Limited although there is a mortgage filed against Venky's London Limited on 30 November 2010 so they did indeed take on debt shortly after the purchase. With it being a mortgage, that loan to Venky's London has to be secured against something and its only asset as far as I am aware are the shares in Rovers it owns.

So following this paper trail it appears that bank security against the club's assets including Ewood and Brockhall probably remain in place. The club's accounts for 2009/10 are dated 12 October 2010 (ie after the filing of full or partial satisfaction of 22 September 2010) and state explicitly that the bank borrowings are secured by a debenture against all the assets of the club.

There are post balance sheet events detailing transfers entered into after 30 June 2010 (the financial year end) and a contract for energy saving equipment but no reference to any reduction in bank security which clearly would warrant disclosure.

[67splitscreen]

So we are now seeing that under the trust Ewood and Brockhall were in fact used as security, so much for the untouchable.