[Archived] Championship Clubs Debt

[PeteJD13]

Our debts are around 80 million and rising, Cardiff Citys debt is 174 million mainly to Vincent Tan and Bolton's isn't far off that mark either, what makes our position more precarious then those two clubs, Forrest are burning through cash as well and posted massive losses.

If promotion is off the radar I certainly think for Blackburn,Bolton,Cardiff it is for the foreseeable future I don't see a way for substantial debt reduction with Rovers selling Rhodes and Gestede wont make a lasting impact with gates spiralling downwards.

[onlyonejackwalker]

Exactly. Sell the whole squad and we would still be about 60 million in arrears. We are goosed and completely reliant on the maniacs who caused all the misery.

Those of us who cared enough about the longer term future of the club and wanted it to be enjoyable for the future generations at the highest levels didn't care if it was a little bit dull at times under Allardyce. Far better that than risking everything gambling on some unproven chancers hopefully being able to manage accordingly and scrape along.

The only thing I can see that gives us half a chance is promotion back to the Premier League. Recruit the most suitably qualified person from a world-wide audience and go for it immediately, as the alternatives for this club are way too grim to even consider.

[ABBEY]

In VENKYS we trust is the reoccurring brfcs mantra .

Stuff it get shut and start with whatever we are dealt . One team to blame for what has happened , happening and will happen . Team Venkys .

[SIMON GARNERS 194]

How can we get shut of them Abbey if they simply won't sell?

[ABBEY]

drive em out..but noone will.

[Andy]

That's because most fans don't want to 'drive them out'.

Anybody with half a brain can see that they represent even the faintest hope of us getting back to the Premier League and having a chance of getting on an even financial footing in time.

If that happens, and only then, do you stand a chance of getting your wish of being without the owners.

And even then, I'm not confident that we wouldn't end up with even worse owners...see Cardiff, B'ham, etc.

[ABBEY]

who you saying has half a brain?

You may happy with them but I aint . Do tell me how we get this promotion when it appears the remit is not win games but be the Arthur Daly of footy.

[47er]

Could somebody answer this one for me? When Venkys took over we were 54M in debt. Its now reported as 79M, the original 54 + debt incurred by Venkys----25.

I read that several times over the weekend.

So Venkys have not paid off a penny of the debt since they bought the club? Is that right?

Or did the press last weekend get it wrong?

[den]

I suspect that Venky's haven't put in anywhere near as much of their own cash as some fans - and bowyer make out. We.re making huge annual losses and those losses aren't being paid off, they're being loaded onto the debt. I don't think they ever intended to put money into the club and apart from Singh cajoling them into paying out £8m for Rhodes - which Singh said was a one-off, have they put anything in? With that in mind you really do have to fear for the club. Mercerman is right, the club is being dumbed down. What will the situation be when we come out of embargo? Could it be that we have lost all the better players and are left with a management who see no further than treading the same path that we have since 2010 ? It's a real possibility and a real fear.

[tomphil]

Could somebody answer this one for me? When Venkys took over we were 54M in debt. Its now reported as 79M, the original 54 + debt incurred by Venkys----25.

I read that several times over the weekend.

So Venkys have not paid off a penny of the debt since they bought the club? Is that right?

Or did the press last weekend get it wrong?

The bank debt was 16 million at the time of the takeover and the Trust were owed 3 mill in a loan. 19 in total, 79 at the last count. Absolutely astonishing. They were also supposed to pay off the original overdraft after takeover but just moved it of the club books and onto the holding company books. There was an agreement in place to pay back the 3 mill over 3 years I think.

It obvious now that their intention after takeover was to quickly claw back the purchase money and pay off the debt by stripping the squad.

[den]

Could somebody answer this one for me? When Venkys took over we were 54M in debt. Its now reported as 79M, the original 54 + debt incurred by Venkys----25.

I read that several times over the weekend.

So Venkys have not paid off a penny of the debt since they bought the club? Is that right?

Or did the press last weekend get it wrong?

I think the debt was nearer to £20m than £54m?

[onlyonejackwalker]

I think the debt was nearer to £20m than £54m?

I think circa 25 million if my memory is correct. 20 million losses ever since, hence the extra 60 mill or so between friends. Ouch. I start fretting if I owe £20 quid to someone.

[DE.]

I remember it being around £25m as well. We definitely weren't £54m in debt when Venky's took over.

[AggyBlue]

I remember it being around £25m as well.

That's funny, I remember it being 20M.

I do admit though my memory isn't what it used to be

[thenodrog]

I suspect that Venky's haven't put in anywhere near as much of their own cash as some fans - and bowyer make out. We.re making huge annual losses and those losses aren't being paid off, they're being loaded onto the debt. I don't think they ever intended to put money into the club and apart from Singh cajoling them into paying out £8m for Rhodes - which Singh said was a one-off, have they put anything in? With that in mind you really do have to fear for the club. Mercerman is right, the club is being dumbed down. What will the situation be when we come out of embargo? Could it be that we have lost all the better players and are left with a management who see no further than treading the same path that we have since 2010 ? It's a real possibility and a real fear.

Who knows? But nevertheless den debt does need servicing and the cost of servicing debt of that level must be significant, and at a level beyond the clubs current means.

[den]

Who knows? But nevertheless den debt does need servicing and the cost of servicing debt of that level must be significant, and at a level beyond the clubs current means.

Yes, but that's a result of them not putting money into the club. They had no other option to servicing the debt, other than closing us down. They haven't done that. Yet. Who would bet against it?

[47er]

I think the debt was nearer to £20m than £54m?

Well I thought so too. I'm simply quoting what I read last weekend in the press.

The most important point though is "have Venkys ever paid ANY of it off?

[Mercer]

Last accounts (2009/10) before V's bought Rovers showed club's net worth to be £11m with net current assets of -£23m and long term finance of £7m.

Last published accounts (2013/14) for football club show club's net worth to be -£63m with net current assets of -£25m and long term finance of £74m.

Last published holding company accounts (Venky's London Limited) at 31 March 2014, showed an issued share capital of £85m and a capital contribution of £3m. In essence this means that at that point, their input was almost £90m in terms of buying the club and since keeping it afloat. As we are broadly losing £100k day, it's very likely that the cost to them has escalated to about £120m.

In a nutshell, we are in one feckin mess.

[PeteJD13]

What I would like to know is, the debt that the club/venkys have is that worse than Bolton's Debt to Davies or Forrest's debt or Cardiff's the general opinion seems to be that our clubs is in danger longer term I would concur with that to a point. But generally looking round the championship Blackpool aside there does appear to be a number clubs who have substantial debt that is more than there asset value.

[Mercer]

What I would like to know is, the debt that the club/venkys have is that worse than Bolton's Debt to Davies or Forrest's debt or Cardiff's the general opinion seems to be that our clubs is in danger longer term I would concur with that to a point. But generally looking round the championship Blackpool aside there does appear to be a number clubs who have substantial debt that is more than there asset value.

In a nutshell, we are entirely reliant now upon the V's keeping us afloat as our losses have been / are running at broadly £100k per week.

This has be done by increasing the issued share capital which provides a cash injection into the club and negotiating finance facilities with the Bank of India.

Currently, BOI have their facilities secured on V's assets in India, however, the key point is that the loans / overdraft are to Blackburn Rovers Football and Athletic PLC which means they in the event of default, BOI will first come knocking on Rovers' door and that could kick-start an insolvency process. BOI also reserve the right to ask for a debenture (fixed and floating charge) over club assets. The security on Indian assets will be part of either a cross company guarantee (from VHP Limited - Indian company) or personal guarantees from the Raos - normal practice with 'third party' guarantees is that the lender only pursues as a last resort ie when all avenues of recovery with the borrower (in this case Rovers) have been exhausted. Fans should therefore not naively sit in the comfort zone - these are very worrying times.

[Parsonblue]

In a nutshell, we are entirely reliant now upon the V's keeping us afloat as our losses have been / are running at broadly £100k per week.

This has be done by increasing the issued share capital which provides a cash injection into the club and negotiating finance facilities with the Bank of India.

Currently, BOI have their facilities secured on V's assets in India, however, the key point is that the loans / overdraft are to Blackburn Rovers Football and Athletic PLC which means they in the event of default, BOI will first come knocking on Rovers' door and that could kick-start an insolvency process. BOI also reserve the right to ask for a debenture (fixed and floating charge) over club assets. The security on Indian assets will be part of either a cross company guarantee (from VHP Limited - Indian company) or personal guarantees from the Raos - normal practice with 'third party' guarantees is that the lender only pursues as a last resort ie when all avenues of recovery with the borrower (in this case Rovers) have been exhausted. Fans should therefore not naively sit in the comfort zone - these are very worrying times.

As you have no influence or impact on how Venky's finance the club why are you worrying? There are enough things in life to worry about over which you can have an impact and a result on the outcome without worrying about the things you can't, Mercerman. Life's far too short to worry about the things over which I have no influence.

[Mercer]

As you have no influence or impact on how Venky's finance the club why are you worrying? There are enough things in life to worry about over which you can have an impact and a result on the outcome without worrying about the things you can't, Mercerman. Life's far too short to worry about the things over which I have no influence.

Very philosophical Parsonblue !

A poster asked a question about the finances and I tried to give an insight.

I hear a lot of fans saying 'oh the bank stuff is secured on V's assets in India, we have nothing to worry about'. Quite the contrary as the bank has lent to Blackburn Rovers Football and Athletic Club Limited. Anyone with a modicum of knowledge about lending, default, guarantees and consequent recovery process would be very alarmed about what I have outlined in my earlier post. You are right, I can't influence or impact upon these matters but, as a lifelong fan, it does give me much concern.

[yoda]

Very philosophical Parsonblue !

A poster asked a question about the finances and I tried to give an insight.

I hear a lot of fans saying 'oh the bank stuff is secured on V's assets in India, we have nothing to worry about'. Quite the contrary as the bank has lent to Blackburn Rovers Football and Athletic Club Limited. Anyone with a modicum of knowledge about lending, default, guarantees and consequent recovery process would be very alarmed about what I have outlined in my earlier post. You are right, I can't influence or impact upon these matters but, as a lifelong fan, it does give me much concern.

I thought they had lent to Venkys London, was it not about £20 million ? with £80 million being converted to shares

[Baz]

As you have no influence or impact on how Venky's finance the club why are you worrying? There are enough things in life to worry about over which you can have an impact and a result on the outcome without worrying about the things you can't, Mercerman. Life's far too short to worry about the things over which I have no influence.

Why is he worried about the club debts? Is that an real question?

Can understand that he cant have any influence, but fully understand the concern whether we have a club to support in x months time.

[DE.]

As you have no influence or impact on how Venky's finance the club why are you worrying? There are enough things in life to worry about over which you can have an impact and a result on the outcome without worrying about the things you can't, Mercerman. Life's far too short to worry about the things over which I have no influence.

I don't see how any true fan of the club could not be gravely concerned about our financial plight, Parson. That's a really strange statement to make.