[Archived] Venkys London Limited - Accounts

[RoverScot]

Hughesy, I don't know how many times I have corrected this mistaken recollection for you.

I have the June 2012 accounts so congrats to Venky's for getting them out in a timely fashion.

The £21m long term debt on 30 June 2012 is not a cause for congratulations though- that debt number is far far worse than anything I was speculating. That will push this year end's debt figure to at least at £45m if there are no significant player or other asset sales.

Short term debt is down reflecting the repayment of the Barclays loan.

There is a small overall profit but achieved through a net £22m profit on sale of players. The operating loss is I believe the worst in the club's history.

I am going to analyse the numbers in detail and will post on here when time permits.

I would have thought that it would be the other way round - we would have more short term debt through acquiring more creditors after such negligent management but less in long term debt due to repaying the Barclays loan.

Therefore, isn't the Barclays loan the long standing loan that was taken on at the purchase of the club to which was was now paid off but we are instead re-accumulating a large debt with the bank of India.

If there still is a long term loan debt of £21 million then someone has been telling fibs to the action group in saying we are debt free.

[philipl]

There is £16M short term debt as well as the £21m indian bank debt

[philipl]

I am posting Rovers account information on here because they need to be read with the VLL accounts to see the full picture.

[PAFELL]

I would have thought that it would be the other way round - we would have more short term debt through acquiring more creditors after such negligent management but less in long term debt due to repaying the Barclays loan.

Therefore, isn't the Barclays loan the long standing loan that was taken on at the purchase of the club to which was was now paid off but we are instead re-accumulating a large debt with the bank of India.

If there still is a long term loan debt of £21 million then someone has been telling fibs to the action group in saying we are debt free.

Which if they lied about that - even though the accounts are available publicly. What else are they lying about?

Can we really trust anything that comes from either shaw or singh?

[iamarover]

Which if they lied about that - even though the accounts are available publicly. What else are they lying about?

Can we really trust anything that comes from either shaw or singh?

Pafell they are lying about how much money they have. For example: The base rate in India is 8%. The Bank of England is 0.5%. Why is there a debt, and why is it in India? If they are really billionaires, it would be senseless to be paying interest to the BoI - and even more barking to be paying more than they would have done in England. So there are other reasons for their duplicity. Philip's analysis will probably show us the true horror. My guess is that they have borrowed the money to buy the club, and by various devices loaded it against revenues. They will take it all out over the next 3 parachute years, but with debt rising and income falling, Rovers could be insolvent by then. I think they are incompetent rather than corrupt, but it all adds up to the same disastrous result.

[philipl]

There is a difference between wealth and cash.

Quite a few message board posters probably have a difference between their house value and mortgage of at least £100k.

Doesn't mean they either can or would want to buy a league 2 footballer.

If somebody bought a league 2 footballer for you and said you could use it to promote your chicken coop and all you have to do is lease more chickens from him, you might consider it though.

[PAFELL]

Pafell they are lying about how much money they have. For example: The base rate in India is 8%. The Bank of England is 0.5%. Why is there a debt, and why is it in India? If they are really billionaires, it would be senseless to be paying interest to the BoI - and even more barking to be paying more than they would have done in England. So there are other reasons for their duplicity. Philip's analysis will probably show us the true horror. My guess is that they have borrowed the money to buy the club, and by various devices loaded it against revenues. They will take it all out over the next 3 parachute years, but with debt rising and income falling, Rovers could be insolvent by then. I think they are incompetent rather than corrupt, but it all adds up to the same disastrous result.

So basically lying about the debt.

Lying about their wealth.

[RoverScot]

Pafell they are lying about how much money they have. For example: The base rate in India is 8%. The Bank of England is 0.5%. Why is there a debt, and why is it in India?

They will have a better credit rating in India hence borrowing in India. It also makes sense to borrow from a bank to service current cash liabilities rather than managing this completely from the VH groups own cash reserves. I think this makes sense but I'm not defending their general stupidity and incompetence though.

Which if they lied about that - even though the accounts are available publicly. What else are they lying about?

Can we really trust anything that comes from either shaw or singh?

This was what was said by Derek Shaw to BRAG:

The group asked Derek to confirm if the club was debt free as claimed and Derek stated that the clubs debentures had been paid off at the end of last season and the club was managing its operating costs this season as promotion is targeted.

I believe the clubs debentures are the Barclays debt and this was the debt they agreed to service when they bought the club. However, Philipl says that there is now a new £21 million debt to the Bank of India.

[philipl]

21m debt to patent.

VLL accounts talk of Bank of India and ICIC.

Put the two accounts together with what we have known for ages about Balaji pledging land for this.

Promotion this season is even more do or die perhaps.

Iamarover is raising some good points which increase the worries about Rovers' situation.

P

[Mercer]

There is £16M short term debt as well as the £21m indian bank debt

So, seemingly, £37million of debt and speculated that we are losing some £2million per month.

Horrific situation - possibly £60m debt by end of this season ?

Really is sh1t or bust.

Berg HAS to get us up this season.

[PAFELL]

They will have a better credit rating in India hence borrowing in India. It also makes sense to borrow from a bank to service current cash liabilities rather than managing this completely from the VH groups own cash reserves. I think this makes sense but I'm not defending their general stupidity and incompetence though.

This was what was said by Derek Shaw to BRAG:

The group asked Derek to confirm if the club was debt free as claimed and Derek stated that the clubs debentures had been paid off at the end of last season and the club was managing its operating costs this season as promotion is targeted.

I believe the clubs debentures are the Barclays debt and this was the debt they agreed to service when they bought the club. However, Philipl says that there is now a new £21 million debt to the Bank of India.

Yes I am aware this is what brag were told - £21 million in debt.

Due to relegation, it would take longer to repay it.

So, seemingly, £37million of debt and speculated that we are losing some £2million per month.

Horrific situation - possibly £60m debt by end of this season ?

Really is sh1t or bust.

Berg HAS to get us up this season.

Extremely bad. This does take into consideration any jan transfer dealings.

[philipl]

To the liabilities of £37m have to be added tthis summers transfers, current losses which one poster said are £2.3m per month- don't know if that's an accurate number and anything left for the January pot.

£21m is of course the amount paid so far to the Walker Trust. Coincidence? Why in this year's account and not last year if that is what it is.

I was surprised to see the debt had jumped so badly so quickly. Of course the incompetence could be so bad they really have blown £21m more cash than I expected but my track had Rovers being bank debt free in June.

This also raises more questions about those VLL qualified accounts. That investment they wouldn't say anything to the auditors about isn

[RoverScot]

It would be conceited to say we are debt free then if the current liabilities are being accumulated as quickly as they are.

I assumed it would be a case of the Barclays debt being paid off and then re-accumulating a new debt at around £1-1.5 million a month. Which is bad but would have been technically manageable for Venkys imo (taking their activities and business at face value). If the new numbers are true, its gets to a tipping point beyond what Venkys will have the stomach for.

Continuing with Philipl's analogy, its like paying off a mortgage on a house but then spending on a credit card the amount of the house and beyond.

[broadsword]

Well that would be because they don't have the cash flow to prop up Rovers, I think.

It seems clear from reading between the lines that this situation just cannot go on much longer, their initial business model of buy kids and sell them for a profit to offset operating losses is well and truly down the shitter. With the club not looking likely to be promoted and the the club allegedly losing 2 mill a month (I guess this is on the BoI account), then alarm bells should be ringing for any sensible bank manager.

[philipl]

Audit and tax work z£55k.

Add £110k on audit for VLL.

That says there has been a crisis during the audit work so far as I am concerned.

[PAFELL]

To the liabilities of £37m have to be added tthis summers transfers, current losses which one poster said are £2.3m per month- don't know if that's an accurate number and anything left for the January pot.

£21m is of course the amount paid so far to the Walker Trust. Coincidence? Why in this year's account and not last year if that is what it is.

I was surprised to see the debt had jumped so badly so quickly. Of course the incompetence could be so bad they really have blown £21m more cash than I expected but my track had Rovers being bank debt free in June.

This also raises more questions about those VLL qualified accounts. That investment they wouldn't say anything to the auditors about isn

It makes me wonder why they have not done more to secure more sponsorship of shirts etc. Unless they fear allowing other sponsors deflects from their own brand.

[bypass06]

Blackburn Rovers post profit

http://www.lancashiretelegraph.co.uk/sport/football/blackburn_rovers/news/10092027.Blackburn_Rovers_post_profit/

[Mercer]

Audit and tax work z£55k.

Add £110k on audit for VLL.

That says there has been a crisis during the audit work so far as I am concerned.

Would it be fair to say that changing accountants from the local firm PMM to the 'national' KMPG has cost about £100k pa extra for, seemingly, no benefit ?

Unbelievable to me how we seem to squander money and lose local goodwill !

Keep up the good work Derek - £2,500 saving on chairs ! Makes you want to weep !

[RoverScot]

From that article:

BLACKBURN Rovers have posted an annual pre-tax profit of £4.3m – thanks to a host of player sales.Rovers recorded an operating loss of £9.6m before player trading in the year ending June 30, 2012 – around £5m more than they did a year earlier.But the club’s latest accounts reveal that activity in the transfer market raised £14.1m thanks to money received for the sale of players such as Phil Jones, Chris Samba, Nikola Kalinic and Yakubu. That allowed Rovers to make a profit for the year, while the club’s net debt was reduced from £26.3m to £24.5m.

In contrast, a year earlier Rovers had posted an annual pre-tax loss of £18.6m after spending a net £13.8m on player trading. The club sold Jones to Manchester United midway through June 2011 but the £16.5m fee was to be paid in instalments, with some of the payments included in this year’s balance sheet.

Kalinic joined Ukrainian side Dnipro in August 2011 for a reported £6m, while Rovers sold Samba to Anzhi Makhachkala in February for a fee believed to be between £7m and £9m. Yakubu moved to China in June to sign for Guangzhou R&F for £1m, having been bought from Everton for a similar fee 10 months earlier.

The purchases of Scott Dann and David Goodwillie last summer, for fees said to total around £10m, were also included in this year’s balance sheet.It was confirmed that, since the balance sheet date, Rovers entered into transfer agreements that will cost the club a net £6.8m. That will include money spent this summer on players such as Jordan Rhodes, Leon Best and Dickson Etuhu – as well as fees to be received for the likes of Junior Hoilett and Steven Nzonzi.

Turnover fell this year from £57.6m to £54.2m, with an increase in broadcasting revenue offset by a reduction in prize money as Rovers finished 19th in the Premier League and slipped out of the top flight.

Commercial revenue fell by £1.8m, partly due to the end of the club’s shirt sponsorship deal with Crown Paints.

Contingency plans have been put in place should Rovers be unsuccessful in their promotion bid this season, while the club are also preparing for the introduction of Financial Fair Play rules to English football.

[Mercer]

Blackburn Rovers post profit

http://www.lancashir...rs_post_profit/

“The company will require significant funding in addition to the current facilities available to the company,” a statement read.

Frightening.

Let's just hope that the Raos consider Rovers to be one of their 'philanthropic' projects. Otherwise, it's more than likely that it will be game well and truly 'Rover'.

[47er]

Well that would be because they don't have the cash flow to prop up Rovers, I think.

It seems clear from reading between the lines that this situation just cannot go on much longer, their initial business model of buy kids and sell them for a profit to offset operating losses is well and truly down the shitter. With the club not looking likely to be promoted and the the club allegedly losing 2 mill a month (I guess this is on the BoI account), then alarm bells should be ringing for any sensible bank manager.

How much wealth do they have? Three times that of Jack or not a pot to kean in? Or neither of these? I'd guess they are multi-millionaires but not billionaires and certainly not close to Jack's wealth.

If they are richer than I think, their conduct over the last 2 years makes that irrelevant anyway because they sure as hell won't be spending anymore than they have to on Rovers.

So, its promotion or bust. I think they'd sell if we didn't get promoted or at least try to. But I'd also guess that they'll want to get most of their money back which is impossible because they've severely damaged the enterprise.

So, period of uncertainty and chaos (ie further chaos) then eventually they'll sell at a mark-down price because there is no other way out.

Chance maybe for some local ownership? Anybody see it differently?

looking ahead that's how I see it.

[Kamy100]

Just been reading the accounts.

On page 23 section 15 it says:

Amount owed to parent undertaking: £21,000,000

(The amounts owed to the parent undertaking above are interest free, with no fixed date for repayment).

So from my limited understanding of these kind of documents I take it that this is the £21 million that Venky’s have borrowed from India State Bank have invested into the club? They have given it to the club as an interest fee loan?

[rovers11]

How much wealth do they have? Three times that of Jack or not a pot to kean in? Or neither of these? I'd guess they are multi-millionaires but not billionaires and certainly not close to Jack's wealth.

If they are richer than I think, their conduct over the last 2 years makes that irrelevant anyway because they sure as hell won't be spending anymore than they have to on Rovers.

So, its promotion or bust. I think they'd sell if we didn't get promoted or at least try to. But I'd also guess that they'll want to get most of their money back which is impossible because they've severely damaged the enterprise.

So, period of uncertainty and chaos (ie further chaos) then eventually they'll sell at a mark-down price because there is no other way out.

Chance maybe for some local ownership? Anybody see it differently?

looking ahead that's how I see it.

Venky's wont sell until we are back in the prem. With the new tv deal they could demand a lot for the club, certainly more than they paid.

Despite the scare mongering by some, I believe they will continue to fund the club to get out of this league. They have said that quite clearly in the latest accounts. They also said it in last years accounts and we all doubted them then but they exceeded our expectations with the amount of money they invested in the summer.

I don't think anyone is quite sure what they are worth but I suspect their wealth is in the billions (Nick Harris said this some time ago). However, as Philip said, there is a difference between wealth and cash. Alan Sugar said when he sold spurs that he was one of the few chairman in the league who was cash rich and could draw £100m out of his bank account without any problem.

[Paul]

Just been reading the accounts.

On page 23 section 15 it says:

Amount owed to parent undertaking: £21,000,000

(The amounts owed to the parent undertaking above are interest free, with no fixed date for repayment).

So from my limited understanding of these kind of documents I take it that this is the £21 million that Venky’s have borrowed from India State Bank have invested into the club? They have given it to the club as an interest fee loan?

Exactly where the money is from I would not like to speculate but, yes, you're right BRFC owe the parent company £21m. It also appears there is a further £16m of debt which makes the situation even worse. Quite where the debt free statement came from remains to be seen.

The figures in the LT show the club was losing £800k / month in last financial year. It's only the player sales which have allowed the club to post a profit.

[pksrover]

Didn't the owners tell us this summer that they had paid all the debt off? Or was that Mr Steve Kean who told us that..?