[Archived] Venkys London Limited - Accounts

[RoverScot]

Details of the new banking arrangements in relation to the new bank loan/overdraft which has a current value of £3,715,826:

The bank loan and overdraft are not secured on any of the company's assets, however the bank reserves the right to ask for a debenture charge over the assets of the company during the life of the facility. interest is paid upon the facility at 2.4% over GBP Libor and the facility is due for renewal/repayment in March 2013.

The borrowing facilities from the Bank of India is at 3%? Seems a lower interest rate than the last borrowing facilities from Barclays - presuming I have read this correctly.

We have net current liabilities of £7,605,385 but are people quoting 'we have a £16 million debt' as being the creditors due within a year figure?

The net transfer income seems to have funded the operating loss of 10 million and, along with another 17 million from Venkys, to have paid the Barclays overdraft and loan. However, the £17 million has been added to the previous £4 million owed to the parent and thus there is a new net debt of £24 million - 21 million to Venkys and 3 million to the bank of India.

The new debt of £21 million owed to the parent undertaking(Venkys), however, has been moved to be paid back at an undisclosed date. Could be indefinite for all we know but I assume Balaji will want this back sometime.

[iamarover]

Details of the new banking arrangements in relation to the new bank loan/overdraft which has a current value of £3,715,826:

The bank loan and overdraft are not secured on any of the company's assets, however the bank reserves the right to ask for a debenture charge over the assets of the company during the life of the facility. interest is paid upon the facility at 2.4% over GBP Libor and the facility is due for renewal/repayment in March 2013.

The borrowing facilities from the Bank of India is at 3%? Seems a lower interest rate than the last borrowing facilities from Barclays - presuming I have read this correctly.

We have net current liabilities of £7,605,385 but are people quoting 'we have a £16 million debt' as being the creditors due within a year figure?

The net transfer income seems to have funded the operating loss of 10 million and, along with another 17 million from Venkys, to have paid the Barclays overdraft and loan. However, the £17 million has been added to the previous £4 million owed to the parent and thus there is a new net debt of £24 million - 21 million to Venkys and 3 million to the bank of India.

The new debt of £21 million owed to the parent undertaking(Venkys), however, has been moved to be paid back at an undisclosed date. Could be indefinite for all we know but I assume Balaji will want this back sometime.

Thank you. That is very clear. And yes he will...and some.

[Paul]

Paul

Thanks for the update.I think this is the bit we all have a problem understanding in that from what we have seen in the accounts today and read on here in terms of what they mean, who would pay anything for a share in the Club?? The club isn't worth anything now and if we do go up then its probably unaffordable becaus eof the big TV revenues.

When anyone thinks about this there are two really important questions for each and everyone of us;

What does the club mean to me as an individual?

What does the club mean to the town?

I'm not going to blather on about this because the basic answer comes down to two simple points; it is OUR club, always has been, always will be and for the town it puts Blackburn on the map, creates employment and gives something we can all be very proud of.

If you agree with the above, and I think most would, the answer to why would anyone buy a share is simple. The supporters and the town are losing, possibly even have lost, their football club. Do we want it back? If the answer is "yes" that is why we should buy shares in the club, to give the community control of the club.

As a fan this is an emotional investment, it's not saving for your retirement. Rovers Trust has plans to reward shareholders with discounts in the club shop, on season tickets etc. so there will be a financial return but that should not be the motivation for buying a share. Taking ownership and control of the club we support is the motivation.

You don't have to buy a share. You simply join the Trust. That investment will cost £10 per year to have one, equal vote in the club's future. That is a real investment in people, putting your faith in Rovers Trust - we need every member possible and we need as many shareholders as possible. It boils down to one thing - £10 will be a very valuable investment for the Trust and the club, that's all you have to do to help. You can do more but a tenner is a a great starting point. Hardly risky is it?

As regards the club's value? We have financial people, Dan Grabko and others, who could give you chapter and verse on this but for the man in the street, you and me, on the face of it you're right. We have between £20-40m of debt, losing money hand over fist, etc. The value of the club today if it was for sale? I don't know, not much in my personal view. Ultimately something is worth only what someone is prepared to pay for it.

The value would increase in the Premier League because of TV exposure etc. but all of the TV revenue would be needed to run the club. Last season we made a £10m loss despite those TV revenues. The financial value is never going to be huge - Venkys got it for +/- £20m.

You then go on to say that the club would need to live within its means and the Trust wouldn't get involved with that aspect.

Again very important. The Trust hopes to own part or all of the club. Owners ultimately control the club. Under both circumstances the Trust would want experienced football people running the club. The management team would agree with the owners the targets and budgets for the year and would be responsible for meeting those targets. So Monday to Friday the management is responsible for the club and achieving the targets set by the owners (the Trust). Got it? Clearly owners don't stand back, they take an interest, offer advice but ultimately a good owner has faith in the manager. We believe Rovers Trust would be a good owner.

A simpler example. I'm responsible for sales in my job. My directors agree the annual and monthly targets with me. Every month I have to report the sales figures. The directors don't want to know the detail of every sale, just have we hit target and do we have any problems? The football club would be basically the same.

I don't wish to be difficult but are you saying you would be prepared to pay for a share in something that isnt worth anything but thereafter would expect the Club to be self sufficient?? It hasn't been able to do that for many years which is why the Trust wanted out.Now, under Venkys the whole thing has got out of control and doesnt look capable of ever living within its means.

Yes, I'm prepared to buy a share for £1000. Like I said it's an emotional thing. My ultimate reason? My son. I want him to have another 40-50 years at Ewood.

Do I expect the club to be self-sufficient? That would be wonderful, it was always Jack's plan. I am not the person to discuss the detail of how Rovers Trust would plan this, I don't have the knowledge to explain this clearly. My personal hope, expectation, is we could get close to breakeven most years. I think we have to be realistic and realise this would be a great achievement for the club. I remember the day we sold Warnock, one of my favourite players. I was very disappointed but I understood if John Williams said the £5m was needed to balance the books he was telling the truth. I took John at his word. Today that would be good enough for me as a fan - a chairman who would be honest with us.

What I can't stomach is watching every decent player we had being sold to ensure a profit and cover the owners and club management's complete incompetence.

I am probably being thick but this is where a number of us can't quite get to grips with what your plan is financially.

Sorry Paul, i really am not trying to be difficult-and i hasten to add its a problem the Club will have with anyone coming in , not just the Trust. It looks like its for those with very deep pockets to me/us.

I have to keep asking many questions of the people in the Trust, it's difficult for lots of people. It is a problem for any potential owner. That is a huge worry. If the club is sold by Venkys or goes into administration we could end up with literally anyone as the owner - that could mean anyone who saw an opportunity to make a buck. Do you think Venkys would care who bought the club? The Walker Trust should have cared and sold us down the river.

Rovers Trust is the opportunity for ALL of us to own Blackburn Rovers.

If this doesn't help, ask again.

[TBTF]

When anyone thinks about this there are two really important questions for each and everyone of us;

What does the club mean to me as an individual?

What does the club mean to the town?

I'm not going to blather on about this because the basic answer comes down to two simple points; it is OUR club, always has been, always will be and for the town it puts Blackburn on the map, creates employment and gives something we can all be very proud of.

If you agree with the above, and I think most would, the answer to why would anyone buy a share is simple. The supporters and the town are losing, possibly even have lost, their football club. Do we want it back? If the answer is "yes" that is why we should buy shares in the club, to give the community control of the club.

As a fan this is an emotional investment, it's not saving for your retirement. Rovers Trust has plans to reward shareholders with discounts in the club shop, on season tickets etc. so there will be a financial return but that should not be the motivation for buying a share. Taking ownership and control of the club we support is the motivation.

You don't have to buy a share. You simply join the Trust. That investment will cost £10 per year to have one, equal vote in the club's future. That is a real investment in people, putting your faith in Rovers Trust - we need every member possible and we need as many shareholders as possible. It boils down to one thing - £10 will be a very valuable investment for the Trust and the club, that's all you have to do to help. You can do more but a tenner is a a great starting point. Hardly risky is it?

As regards the club's value? We have financial people, Dan Grabko and others, who could give you chapter and verse on this but for the man in the street, you and me, on the face of it you're right. We have between £20-40m of debt, losing money hand over fist, etc. The value of the club today if it was for sale? I don't know, not much in my personal view. Ultimately something is worth only what someone is prepared to pay for it.

The value would increase in the Premier League because of TV exposure etc. but all of the TV revenue would be needed to run the club. Last season we made a £10m loss despite those TV revenues. The financial value is never going to be huge - Venkys got it for +/- £20m.

Again very important. The Trust hopes to own part or all of the club. Owners ultimately control the club. Under both circumstances the Trust would want experienced football people running the club. The management team would agree with the owners the targets and budgets for the year and would be responsible for meeting those targets. So Monday to Friday the management is responsible for the club and achieving the targets set by the owners (the Trust). Got it? Clearly owners don't stand back, they take an interest, offer advice but ultimately a good owner has faith in the manager. We believe Rovers Trust would be a good owner.

A simpler example. I'm responsible for sales in my job. My directors agree the annual and monthly targets with me. Every month I have to report the sales figures. The directors don't want to know the detail of every sale, just have we hit target and do we have any problems? The football club would be basically the same.

Yes, I'm prepared to buy a share for £1000. Like I said it's an emotional thing. My ultimate reason? My son. I want him to have another 40-50 years at Ewood.

Do I expect the club to be self-sufficient? That would be wonderful, it was always Jack's plan. I am not the person to discuss the detail of how Rovers Trust would plan this, I don't have the knowledge to explain this clearly. My personal hope, expectation, is we could get close to breakeven most years. I think we have to be realistic and realise this would be a great achievement for the club. I remember the day we sold Warnock, one of my favourite players. I was very disappointed but I understood if John Williams said the £5m was needed to balance the books he was telling the truth. I took John at his word. Today that would be good enough for me as a fan - a chairman who would be honest with us.

What I can't stomach is watching every decent player we had being sold to ensure a profit and cover the owners and club management's complete incompetence.

I have to keep asking many questions of the people in the Trust, it's difficult for lots of people. It is a problem for any potential owner. That is a huge worry. If the club is sold by Venkys or goes into administration we could end up with literally anyone as the owner - that could mean anyone who saw an opportunity to make a buck. Do you think Venkys would care who bought the club? The Walker Trust should have cared and sold us down the river.

Rovers Trust is the opportunity for ALL of us to own Blackburn Rovers.

If this doesn't help, ask again.

Paul

Really appreciate your honesty and frankness and i don' think any of us have any problem with your assessment of the position and how we all want the Club safe and secure in the hands of people that really do care.It is a legacy we all want to pass on to our younger families.

Thinking about it the question i have given may be slightly unfair because this is Venkys we are dealing with and literally second guessing them is just a mugs game.

I think what its boiling down to is that to have any kind of say in the day to day running (control would be far better but probably an unrealistic hope) you will need to by a share at some level.And this is in an entity thats worthless.

To get any kind of control over the day to day happenings would you not need the majority stake? that would be very expensive and absorb most of the kitty even if indeed you could get that much.Then the self sufficient requirement is the next obstacle and that looks impossible unless you are Man Utd/Arsenal

Thats the conundrum that i think anyone has which probably boils down to exactly what level of cash the Trust has to play with in the end.and £10 million looks nothing in this context og running a club

It just looks an equation which is impossible to solve for most interested parties unless its the petro dollars!! The FFP thing looming large is going to kill many if not all clubs like ours.

Again Paul just my real fears about preserving any legacy not a pop at the ambitions of the Trust

[Amo]

[Pete1981]

http://www.insidermedia.com/insider/north-west/81729-/index.html

[bypass06]

Rovers require 'significant funding' as auditors raise concerns

http://www.insidermedia.com/insider/north-west/81729-/index.html

[Hughesy]

Rovers require 'significant funding' as auditors raise concerns

http://www.insiderme...729-/index.html

"In view of this, the directors have received confirmation from the ultimate parent company (Venkateshwara Hatcheries Pvt Ltd) that it has sufficient funds and is willing to provide such additional financing as may be required.

"The directors have also considered the potential impact on the group's cash flows were Blackburn Rover FC not to regain its FA Premier League status and have identified mitigating actions....in any event (directors) have received confirmation of support from its ultimate parent company

[RoverScot]

Indeed, its the going concern qualification that they are talking about - whether Blackburn Rovers has the cash to be trading through the financial year.

If football clubs were run like normal businesses with the intention to make a profit, Blackburn Rovers would normally be seen to have not enough cash to meet the liabilities of its staff wages and costs. However, we are reliant on additional cash from the VH group to meet our obligations, especially since exiting the Premier League. Hence, if Blackburn Rovers had to meet all the liabilities it has undertaken this season with its own resources, it wouldn't be able to do so.

The argument is that this qualification is a result of haggling between the auditors and Venkys over how to present the accounts and shows concerns about Venky's future commitment to Rovers. I personally believe the qualification is due to the TV money drop and still trying to support such a high wage bill rather than necessarily Venkys support beyond this season. It may still reflect a lack of confidence and trust in the VH group from the auditors.

We now owe £21 million to Venkys and, though I disagree with Philipl who thinks there will be £60 million debt next summer, a number of around £40-£45 million owed to the parent company represents a growing barrier to a potential future sale, especially if we don't go up again the following season.

[SIMON GARNERS 194]

The 'owner' of Blackburn Rovers has warned..... ehh?

What about sponsorship, advertising and matchday revenue you all seem to have blatantly ignored these last two years?.What about your own sheer stupidity and pig ignorance that saw the club relegated...self awareness of culpability?

Dont come a crying now Roa's,after all, we're your baby!

This club is a mess because of you people.

[philipl]

Long term debt 21

Net current liabilities 7

Post balance sheet events 8

Losses at £2m per month 24

Total 60

RoverScot, the first three numbers totalling £36m are in the accounts so are locked in. Are you saying we are only losing between £300k and £900k per month?

You are also assuming zero net spend on transfers in the January window or net transfers out to bring wages and debts down.

That might happen but where will our promotion bid be then?

[Exiled in Toronto]

Long term debt 21

Net current liabilities 7

Post balance sheet events 8

Losses at £2m per month 24

Total 60

RoverScot, the first three numbers totalling £36m are in the accounts so are locked in. Are you saying we are only losing between £300k and £900k per month?

You are also assuming zero net spend on transfers in the January window or net transfers out to bring wages and debts down.

That might happen but where will our promotion bid be then?

It is not clear, at least to me, if the losing 2 million a month number includes or excludes the parachute payments. I suspect excludes as they come in lump sums rather than monthly.

[glen9mullan]

Long term debt 21

Net current liabilities 7

Post balance sheet events 8

Losses at £2m per month 24

Total 60

RoverScot, the first three numbers totalling £36m are in the accounts so are locked in. Are you saying we are only losing between £300k and £900k per month?

You are also assuming zero net spend on transfers in the January window or net transfers out to bring wages and debts down.

That might happen but where will our promotion bid be then?

This is all guess work and not what the accounts say

Lets take the clock back 2 years

£23 Million of debt secured on Rover assets owed to the bank,

Liabilities much larger

£3 Million per season additional loss.

Put that into todays figures

Debt with bank paid

Nothing secured on rovers assets

interest free cash injection of £21 Million direct from Venkys and the key word here is from Venkys NOT the bank which in the projections over the next three years shows no indication of it having to be paid back or a loan

Yes losses each month, but that would be the same under any ownership

We now bank out of india, no big issue there, their rates are far more favourable whilst all business's need a banking facility.

You can point to Samba sale , Jones sale, However equally did the Santa Cruz, Duff, Bentley sales not happen?

The only thing thats really wrong at present is rovers have won just 1 of the last 8 matches under the new Manager and promotion is looking further away.

The accounts make it quite clear funds will be made available by the owners, and the summer transfer spending already shows this to be the case

There is very little point putting guess work in or trying to find something that is not there. I myself am guilty because 8 months ago I was certain the club was heading for administration, the player sales, the rumours the counter rumours. However I'm big enough to say I was wrong and when those accounts came out , I was relieved to be wrong

I must add both the FA and Football league are very satisfied with these accoints, and state there is no reason for concern

[SamDingle]

I think you should all keep listening to Shebby and Glen.

Everything's going to be fine.

[cmb211087]

Wow some people have really changed their tune.

[glen9mullan]

Wow some people have really changed their tune.

Its not a case of changing tune, its using facts over fiction.

So much has gone wrong at Ewood over the last 2 years, and so much needs to be addressed. However there is a big difference between wanting the club to be ok and working towards that, than hoping and praying Venkys fail.

Venkys failing is in no-ones best interest and certainly not the supporters. Howevever I do get the impression some would rather they fail than admit they are wrong. I would like to think everyone just wants a well run club to go and support on a saturday, but I get the impression that some would rather settle for admistration than see this whole mess turned around.

[mark1875]

Wow some people have really changed their tune.

However I'm big enough to say I was wrong and when those accounts came out , I was relieved to be wrong

[Athlete]

I think you'll find that the majority of fans want Venkys out of the club and shabby with em

[mark1875]

I think you'll find that the majority of fans want Venkys out of the club and shabby with em

Don't disagree, however if they pull the plug and grant the majoritys wish tomorrow then what?

[rovers11]

Financially, I'd rather have Venky's in charge than the Walker's trust. If we had been relegated under the Walker's trust then there would have been a mass firesale and possible administration. Venky's have enough cash to see us as a promotion chasing team. As I've said before, I believe they will continue to fund Rovers until we reach the prem. Once that happens (which I believe will within the next 1-3 years) then that's when they will try and recoup their money imo.

Operationally, I'd have John Williams etc back in a shot. A combination of the financial resources of Venky's and the adminstration of Williams et al would have been ideal for Rovers and was what JW thought was going to be the case.

Some might rightly say we would still be in the prem if Venky's hadn't taken over. I completely agree that short term we would have remained in the prem but JW knew Rovers were struggling to compete and were eventually going to end up being relegated without a takeover and funding into the team.

[Glenn]

Don't disagree, however if they pull the plug and grant the majoritys wish tomorrow then what?

I made EXACTLY that point on my blog back in February (entitled "Why the protests have to stop now") and I got well and truly rounded by a LOT of people, including some people who are now it's biggest advocates.

It's still a massive concern for me. "Venky's Out Now" is still no more of solution than a 100% fan buy out. Stage 1 is get the club back to being a well run viable prospect for sale and if Venky's can actually achieve then few would object to them carry on that way.

Sadly I don't know enough about the accounts to know if we're heading it the right direction. So far I've read three appraisals by professionals (apologies to the AG, I haven't read their if they've done one, one read snippets on here and by email) all rather negative (with varying degrees of negativity I hasten to add).

[Wendal]

This is all guess work and not what the accounts say

Lets take the clock back 2 years

£23 Million of debt secured on Rover assets owed to the bank,

Liabilities much larger

£3 Million per season additional loss.

Put that into todays figures

Debt with bank paid

Nothing secured on rovers assets

interest free cash injection of £21 Million direct from Venkys and the key word here is from Venkys NOT the bank which in the projections over the next three years shows no indication of it having to be paid back or a loan

Yes losses each month, but that would be the same under any ownership

We now bank out of india, no big issue there, their rates are far more favourable whilst all business's need a banking facility.

You can point to Samba sale , Jones sale, However equally did the Santa Cruz, Duff, Bentley sales not happen?

The only thing thats really wrong at present is rovers have won just 1 of the last 8 matches under the new Manager and promotion is looking further away.

The accounts make it quite clear funds will be made available by the owners, and the summer transfer spending already shows this to be the case

There is very little point putting guess work in or trying to find something that is not there. I myself am guilty because 8 months ago I was certain the club was heading for administration, the player sales, the rumours the counter rumours. However I'm big enough to say I was wrong and when those accounts came out , I was relieved to be wrong

I must add both the FA and Football league are very satisfied with these accoints, and state there is no reason for concern

'a "sellout" is a person or group claiming to adhere to a one ideology, only to follow these claims up with actions contradicting them, such as a revolutionary group claiming to fight for a particular cause, but failing to continue this upon obtaining some influence.'

'Selling out is the compromising of integrity, morality, or principles in exchange for personal gain, such as money or influence'

[Parsonblue]

Its not a case of changing tune, its using facts over fiction.

So much has gone wrong at Ewood over the last 2 years, and so much needs to be addressed. However there is a big difference between wanting the club to be ok and working towards that, than hoping and praying Venkys fail.

Venkys failing is in no-ones best interest and certainly not the supporters. Howevever I do get the impression some would rather they fail than admit they are wrong. I would like to think everyone just wants a well run club to go and support on a saturday, but I get the impression that some would rather settle for admistration than see this whole mess turned around.

So are you now saying the files you assembled in the summer were merely works of fiction? If the FA and Football League are happy clearly there was nothing in your files to cause them concern.

[AndyNeil]

There are many different figures that can be pulled out the Accounts to suit the particular angle to want to give, however if you look at the KPI's (and they are KPI's for a very good reason) you'll see that since 2007/2008 we have gone from an operating profit (before player trading) of £6.6m to an operating loss (again before play trading) of £9.6m. The net debt of the club has risen from £16.9m to £24.5m, the wages to turnover ratio has risen from 70.4% to 92.2%. The largest proportion of income (TV rights) is going to drop through the floor, gates are half of last season, can't comment on Commercial as I don't know but it won't be pretty...now take a look at the expenditure side, yes some high earners left over the summer, but some have come in as well and there hasn't been a cull on non-playing staff at Ewood so that expenditure figure will remain pretty much the same. In summary without the player trading (which in effect cost us relegation) we would have lost c.£10m, income will be down c.£30m this season with the biggest expenditure down slightly, but not enough to cover the short-fall of c.£40m - so where does the c.£40m come from? Venkys? External funding? Additional credit lines? Mortgage assets? After listening to the PhilipL in the podcast on Sunday, its difficult not to think he isn't (in some perverse way) enjoying the demise of Venkys financially, however its difficult to disagree with his analysis of where the club is heading. PROMOTION OR THE SH!T HITS THE FAN - I THINK SO.

[CapeTownRover]

this is no ordinary business though. We dont buy and sell throughout the year, nor do we work with profit margins and expect to see a return on that investment all the time, as a club, we are reliant on various forms of income streams, 2 of those advertising and shirt sponsorship have already fallen to pieces. The other is season and match to match buying of tickets. This too has dropped significantly, and we now suddenly struggle. We have to be careful here, as we can play the risky financial game, or we can start cutting down on unecessary expenses. if we play the risky financial game, then it means we have to pay over the odds, to bring in players who may or may not get us promoted. This means, that we will then have to start cutting down on expenses, which is a problem, as its players who are surplus to requirements that are causing issues. Whichever way we look at it right now, financially we need to close the gap between income and expenditure, but still spend enough, to make a profit. I know that sounds odd, but its just the way things are right now. If you want to move your business forward, then you have to rely on risks, but also to manipulate the market, in order to gain. Are our owners smart enough? We all know the answer to that, but its either sell up, or risk it.