[Archived] The Rao's : We need a statement of intent for next Season.

[ABBEY]

and whilst were at it.. what the bollux is this myhical pub The Boars Yed?

[McClarky]

I'll have a pint of what you're on MC.

[the original david brent]

Did you speak about the manager ? If so what vibes did you get back ? There seems to be a swerve on this subject.

:

1864 - are you able to shed any light on this? I've read through the entirety of this thread and you do seem to have ignored this point; other posters have also asked.

I know you were optimistic following the discussion with Shaw. However the only thing I could be optimistic about is the prospect of a good manager replacing bowyer, taking us to the next level above the current 'stability' and giving us a realistic shout of challenging for promotion.

I appreciate there are things you cannot relay in an open forum, however was bowyer discussed and do you get the impression he will still be in charge next season?

[Mercer]

For clarity, accounts for year ended June 2014 show:

• Total creditors £98million
• Amount owed to parent undertaking £58million
• External creditors therefore equal £40million

There is a lot of naïve understanding regarding Rovers' financial position.

BOI has finance facilities direct with Rovers. Potentially, this is calamitous.

Additionally, it would not surprise me if BOI has made personal loans to Raos in order that they can increase share capital in VLL (Rovers' holding co). Think issued share capital is now north of £100million and has financed the huge £30million+ losses recorded in recent times.

Make no mistake, Rovers' financial position is critical.

[K-Hod]

This is nothing new though Mercer. Anyone with a simple grasp of Mathematics can gather that if you've more going out than coming in it's not going to end well.....

[Stuart]

This is nothing new though Mercer. Anyone with a simple grasp of Mathematics can gather that if you've more going out than coming in it's not going to end well.....

True enough. Even if the debt was written off that would still be the case. Without the possibility of another Jack Walker we could well become 'that club that won the league and vanished'.

[Mercer]

This is nothing new though Mercer. Anyone with a simple grasp of Mathematics can gather that if you've more going out than coming in it's not going to end well.....

Agree, however, I've seen ridiculous posts stating our external debt is 'only' £10m and we have nothing to worry about as all Rovers' debt is secured on assets in India.

It's all bollux. We are the next basket case.

[K-Hod]

Agree, however, I've seen ridiculous posts stating our external debt is 'only' £10m and we have nothing to worry about as all Rovers' debt is secured on assets in India.

It's all bollux. We are the next basket case.

Anyone who says there's nothing to worry about either knows something that none of us do, or has a short memory!

[SIMON GARNERS 194]

Have our Indian Lords found time to address us Surfs yet?........

[Athlete]

Anyone who says there's nothing to worry about either knows something that none of us do, or has a short memory!

Quite a few posters on the FFP thread seem to think differently.. Heads buried in the sand if you ask me or can't do simple mathematics

[ABBEY]

they are away with the fairies

[Gav]

Agree, however, I've seen ridiculous posts stating our external debt is 'only' £10m and we have nothing to worry about as all Rovers' debt is secured on assets in India.

It's all bollux. We are the next basket case.

The debt isn't secured on the club either mercer, so at the moment we're not 100m in debt at all.

[J*B]

The debt isn't secured on the club either mercer, so at the moment we're not 100m in debt at all.

Thought the debt was secured against Venkys London Limited... which is secured against Rovers?

[Gav]

Thought the debt was secured against Venkys London Limited... which is secured against Rovers?

Ian Battersby was clear on radio Lancashire that the debt is not secured on the club.

I don't know the ins and outs of it JB but he was clear on that point.

[J*B]

Ian Battersby was clear on radio Lancashire that the debt is not secured on the club.

I don't know the ins and outs of it JB but he was clear on that point.

Which makes FFP even more mental, if true.

If the loons from Pune are responsible for ALL of the 'debt' - then surely we, Blackburn Rovers FC, are debt free?

[JHRover]

If anyone seriously believes that the Bank of India would continue to put in millions of pounds with only BRFC and its assets as security they are seriously mistaken.

No commercial bank would continue to lend such amounts of money to a loss making Championship football club without other security and guarantees. Venkys must have covered those guarantees in some form or other.

BRFC with all its land and property wouldn't be worth close to the amount that has been leant to keep it operating. Something or someone else has secured the loans.

[1arC]

they are away with the fairies

I think that's a bit unkind on people. I am from a financial background and although I don't think for one minute, we don't have trouble, I struggle to understand the implications of all though.

It appears that the Bank of India have lent money to the owners, but the security is some land in India. The owners then put the money into the bank in the UK which I assume is in the name of Venky's London Limited they in turn finance the football club and own the football club. At some point VLL want the football club to pay back what is owed. So what will VLL do if the football club do not pay this back? Bump the club knowing they won't get the money back anyway? How do the bank of India get their money back? By Bumping Venky's or forcing the sale of the land?

I think anyone who understands all this is quite sharp and anyone who doesn't isn't necessarily away with the Faries! If they are, then I readily admit, I am one of them, as I don't understand it.

Can anyone help?

[tomphil]

No one truly knows the Indian angle on it but there was something in the accounts that alluded to at least some of the debt being secured against some of BRFC's assets. It was highlighted by one or two on here who know what they are on about. It may well just be the day to day working overdraft that it covers.

I think the main point is that if push came to shove the Venkys would cash in on things over here first and foremost before they'd let the bank grab some of their Indian assets. Also the bank would likely look over here before they'd just grab things in India. I think it's fair to assume that.

Personally I think there is a huge loan somewhere in India that is secured over there and the Venkys are happy and easily able to service this debt in terms of interest etc. There is bound to be a ceiling to it and without promotion it will need paying down a bit at the very least sooner or later. Unless they own half the land in India to keep extending against !

[Exiled in Toronto]

I think that's a bit unkind on people. I am from a financial background and although I don't think for one minute, we don't have trouble, I struggle to understand the implications of all though.

It appears that the Bank of India have lent money to the owners, but the security is some land in India. The owners then put the money into the bank in the UK which I assume is in the name of Venky's London Limited they in turn finance the football club and own the football club. At some point VLL want the football club to pay back what is owed. So what will VLL do if the football club do not pay this back? Bump the club knowing they won't get the money back anyway? How do the bank of India get their money back? By Bumping Venky's or forcing the sale of the land?

I think anyone who understands all this is quite sharp and anyone who doesn't isn't necessarily away with the Faries! If they are, then I readily admit, I am one of them, as I don't understand it.

Can anyone help?

As I understand it, VLL is essentially a shell company for the sole purposes of channeling money into BRFC. I can't imagine it has any power of decision making separate to the family, so it won't be the one that pulls any plugs.

As far as I can see, the family has been financing this prolonged car crash through a mix of their own money by converting debt into equity, and through borrowed money, it seems from their family and company banker, the Bank of India, at 9% interest I think I read.

Kamy tells us this is a loan to the family and is secured against valuable family assets. The bank gets their 9% and has a mortgage on some tract of Indian land as security, so I can't see it goes any further for them, or that they would even care what the money has been used on - it's of no relevence to them, they have a sweet deal. If their 9% dries up they ask for their money back and get it either from elsewhere in the family's cash pile or get some nearby land to sell. I would think the last thing they would do is follow that money from the family 8,000 miles to VLL to BRFC, only to discover it is worth a fraction of the loan and comes with some huge liabilities (players contratcs) that get paid first. Cobblers to that when you have a land mortgage on your doorstep that covers everything and more.

One thing I have lost track of is actual cashflow - can any of our real accountants tell me what was the net cash put into the business in the last set of accounts?

No one truly knows the Indian angle on it but there was something in the accounts that alluded to at least some of the debt being secured against some of BRFC's assets. It was highlighted by one or two on here who know what they are on about. It may well just be the day to day working overdraft that it covers.

I think the main point is that if push came to shove the Venkys would cash in on things over here first and foremost before they'd let the bank grab some of their Indian assets. Also the bank would likely look over here before they'd just grab things in India. I think it's fair to assume that.

Personally I think there is a huge loan somewhere in India that is secured over there and the Venkys are happy and easily able to service this debt in terms of interest etc. There is bound to be a ceiling to it and without promotion it will need paying down a bit at the very least sooner or later. Unless they own half the land in India to keep extending against !

I agree with everything bar that paragraph. I think the opposite.

[tomphil]

By that I was thinking if things really hit the fan and they ran into a cash crisis and were really struggling to keep things going. If they did just bail or decide to sell I'd like to think they'd right it off and settle with the bank somehow themselves. If they had a finance crisis we'd no doubt suffer and let's face it with this kind of ownership nothing is ever truly safe.

That share report and comments the other week made for a bit of scary reading. These lot are either financial whizz's playing a blinder in the share market or they're chancers playing Russian roulette with everything built on huge debts whilst protecting their own cash pile. Also as we've seen the poultry business is always one bird flu outbrake from going into meltdown, although they may have that covered with their own vaccination plant !

[1arC]

As far as I can see, the family has been financing this prolonged car crash through a mix of their own money by converting debt into equity, and through borrowed money, it seems from their family and company banker, the Bank of India, at 9% interest I think I read.

I don't quote get what you mean EIT by the bit in bold. What does that mean?

[Exiled in Toronto]

As far as I can see, the family has been financing this prolonged car crash through a mix of their own money by converting debt into equity, and through borrowed money, it seems from their family and company banker, the Bank of India, at 9% interest I think I read.

I don't quote get what you mean EIT by the bit in bold. What does that mean?

I thought I read a while ago that 20 million of the loan owing to them had been converted into more equity, just like Jack did with all the dosh he put in, so they own a nominal 20 million quids worth more shares in BRFC while the debt owing to them went down 20 million. Maybe I misread.

[Mercer]

In a nutshell, and to try and clarify some earlier posts, accounts for year ended 30 June 2014 show:

• Rovers have creditors of £98million
  • £40million is 'external' debt including BOI
  • £58million is owed to parent company VLL - if the Raos get totally hacked off, Rovers could be history
• BOI reserve the right to take a debenture over Rovers' assets - if this happens, fasten your seatbelts

It's largely irrelevant if debt is secured or unsecured. Inability to pay debt as it becomes due leads to insolvency

.

The land security in India that BOI hold could be for either one or both of the following:

• To secure guarantees (for Rovers debt to BOI) provided from the Raos as individuals or from VHPL (Indian company regarded as controlling company of VLL) or indeed from both the Raos and VHPL
• To secure monies that the Raos have borrowed in order to increase issued share capital in VLL (keeps the football club afloat) which I understand has now increased from the £85million shown in accounts of VLL for year ended 31 March 2014 - this would be staggering if correct

I think a lot of fans are under a misapprehension that Venky's are taking all the hits and Rovers are mortgage free and risk free. Nothing could be further than reality.

As an accountant, it pains me to say that I think we are gazing over the precipice.

[Exiled in Toronto]

In a nutshell, and to try and clarify some earlier posts, accounts for year ended 30 June 2014 show:

• Rovers have creditors of £98million
  • £40million is 'external' debt including BOI
  • £58million is owed to parent company VLL - if the Raos get totally hacked off, Rovers could be history
• BOI reserve the right to take a debenture over Rovers' assets - if this happens, fasten your seatbelts

It's largely irrelevant if debt is secured or unsecured. Inability to pay debt as it becomes due leads to insolvency

.

The land security in India that BOI hold could be for either one or both of the following:

• To secure guarantees (for Rovers debt to BOI) provided from the Raos as individuals or from VHPL (Indian company regarded as controlling company of VLL) or indeed from both the Raos and VHPL
• To secure monies that the Raos have borrowed in order to increase issued share capital in VLL (keeps the football club afloat) which I understand has now increased from the £85million shown in accounts of VLL for year ended 31 March 2014 - this would be staggering if correct

I think a lot of fans are under a misapprehension that Venky's are taking all the hits and Rovers are mortgage free and risk free. Nothing could be further than reality.

As an accountant, it pains me to say that I think we are gazing over the precipice.

Other than the amount owed going up, what has actually changed in the last three years? All the things in bold equally applied three years ago, despite multiple warnings in that time, not least from yourself, that the precipice was imminent.

The number owed might be eye-watering to us, but it so far hasn't had the slightest impact on the owners. Wages are being paid, suppliers are being paid, pitches are being relaid. The wage bill is being cut but quite right too. Nothing goes on forever of course, but I see no tangible signs that a precipice has been reached by the owners or the Bank of India.

[chaddyrovers]

Are the owners covering the debt and still paying the overdraft or some of it?

Wages still be paid by the club?

Didn't the owners not turn some of the debt into shares in the club?