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Bank debt gone; Apparently...
Topic Started: Feb 7 2014, 09:59 AM (5,459 Views)
vvhatsthatonyourback
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wild eyed
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yasser
Feb 7 2014, 01:32 PM
Notice that part of the deal is to dump BoS and deal with Santander...hmmm
From what I've heard, plus all the extremely polite formal language about how United have successfully worked with HBoS in the past, United & ST are desperate to get out from HBoS's clutches and have found the relationship rather strained and time consuming.

For those reasons, I would not be surprised if this deal doesn't save United money in terms of interest payments and fees, as the release from the hassle of dealing with HBoS makes it worth it.
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Naebody
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Twat
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Reading back, it would certainly appear that Bank of Scotland wrote some amazingly stupid loans to Scottish clubs. It'd be predictable for new management to show equal and opposite stupidity that'd result in the hounding of all clubs off HBOS's books. You'd assume, though, that a business of United's size wouldn't struggle too much to find a normal lender that could refinance a £3m debt. Therefore, whatever the unspecified terms are on the loan provided by the unidentified clique of wealthy individuals who have just become our ultimate overlords, they must've been superior to taking normal, transparent, highly regulated public bank debt. Possibly. I'm 51% sure that's a fair way to read this. But then, I'm naturally an optimist.
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Morvant's Finest
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Tommy McLean
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Mental.

You spend 15+ years discussing the bank debt Utd have hanging over their heads and in one vague news story you learn it's gone for good! With no inkling of this happening at all.

Mental.

Oh and this bit of (non) detail from Spencey's follow up story appears to suggest we may even have settled the amount due for a lesser cash sum??

Quote:
 
A debt of £4m has been wiped out by a group of fans who have partially paid the bank with their own funds.

United had a £3.4m term loan and a £1m overdraft, but chairman Stephen Thompson and the club's board have successfully negotiated a settlement.
ETA: Anyone else think this might be ST lining up an escape route for the Thompson family from the club?
Edited by Morvant's Finest, Feb 7 2014, 08:11 PM.
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TheDean
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Morvant's Finest
Feb 7 2014, 08:09 PM
Mental.

You spend 15+ years discussing the bank debt Utd have hanging over their heads and in one vague news story you learn it's gone for good! With no inkling of this happening at all.

Mental.

Oh and this bit of (non) detail from Spencey's follow up story appears to suggest we may even have settled the amount due for a lesser cash sum??

Quote:
 
A debt of £4m has been wiped out by a group of fans who have partially paid the bank with their own funds.

United had a £3.4m term loan and a £1m overdraft, but chairman Stephen Thompson and the club's board have successfully negotiated a settlement.
ETA: Anyone else think this might be ST lining up an escape route for the Thompson family from the club?
maybe- but there is absolutely nothing wrong with that. We've now got several sugar daddies.

We can now be more confident that the club is moving to a sustainable business model with no daft transfer fees to bring in players and a greater reliance on youth development now that Souttar/Gauld/Armstrong et al have shown what they can do. Our excellent chairman made it clear some time ago that he was capping his family's financial exposure and that has been well and truly nailed down today too.

I don't hold with the view that this enables an extended period of holding onto our developing talent though. I can imagine an agreement down the line in the form of an option to convert participator loans into a special equity class entitled to special dividends paid from transfer fees after top-slicing a bit of further youth development money.

What fantastic backing our chairman has secured though- genius. The contrast with Edmiston Drive and Tynecastle couldn't be starker. I love Armageddon.
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Tom_Boland
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Ivan Golac
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Not too happy that Mr T didnt inform me of this news personally this morning. In the middle of a paint job in Tannadice Street around 9:15 and spoke to him momentarily. Of course he may have took the huff when I didnt offer him a handshake. This was due to the fact that my hands were covered in red masonry paint.
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Naebody
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Twat
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TheDean
Feb 7 2014, 08:26 PM
We've now got several sugar daddies.

We can now be more confident that the club is moving to a sustainable business model with no daft transfer fees to bring in players and a greater reliance on youth development now that Souttar/Gauld/Armstrong et al have shown what they can do. Our excellent chairman made it clear some time ago that he was capping his family's financial exposure and that has been well and truly nailed down today too.

I don't hold with the view that this enables an extended period of holding onto our developing talent though. I can imagine an agreement down the line in the form of an option to convert participator loans into a special equity class entitled to special dividends paid from transfer fees after top-slicing a bit of further youth development money.

What fantastic backing our chairman has secured though- genius. The contrast with Edmiston Drive and Tynecastle couldn't be starker. I love Armageddon.
Where the f*ck has that lot come from?

Look, United remains pretty much as deep in debt as it was yesterday. HBOS might have taken a haircut to encourage the debt off its books but I'd guess you'd only be looking at ~5% of the total. Barely a Scott Allan.

What's new is that a consortium of private individuals now own the debt. On what terms? Dunno. But from what's reported it seems reasonable to assume that Thomson has put in a controlling amount of cash into the consortium. So we're in the bind of having the CEO as the main shareholder and the main debtholder. This is the opposite of an escape route for Eddie. He's running a business to pay off the debt he owes himself to avoid interest payments to himself so he can pay a dividend to himself. Brilliant.

You can argue that benevolent smalltime creditors are nicer to have than a big heartless bank. You can also argue that a big heartless bank is structurally better equipped than a smalltime creditor to support a business, particularly when the latter's benevolence is not guaranteed. And with Capt'n Pantsdown embedding himself in United's financial workings like a tapeworm, why should be assume the long-term benevolence of the other parties he's massively incentivised to dick over? Admittedly I'm drunk right now, but I'm suddenly feeling a lot less positive about this development. 49/51%.
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reekie
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lum raker
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According to Spence*, the haircut was sizeable. His understanding being that of the ~£5m owed, HBOS accepted ~£2.5m.



*well, according to my father, who heard Spence on tonight's Sportsound.
I'd turned off after an half-hour circle-jerk about the tantalising prospect of an Old Firm cup-tie if The Rangers beat Dunfermline.
Blithely ignoring the fact that Celtic still have to play Aberdeen.
Oh, and that there's no Old Firm anymore.
Cunts.
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Naebody
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Twat
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reekie
Feb 8 2014, 12:19 AM
According to Spence*, the haircut was sizeable. His understanding being that of the ~£5m owed, HBOS accepted ~£2.5m.

*well, according to my father, who heard Spence on tonight's Sportsound.
I think either he misheard or Spency misspoke. The debt (term and overdraft) was widely quoted post Goodwillie to be about £3.7m and falling. Perhaps that was a lie, I guess, or perhaps the club overspent by £1.3m in the past few months to improve its negotiating position. Those new dugouts must've been pretty pricey. We could ask the company that installed them, if only there was any information as to their identity ...

If HBOS really is accepting 50p in the pound from solvent businesses, you'll find me queueing at the door at 9am.
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reekie
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Naebody
Feb 8 2014, 07:56 AM
reekie
Feb 8 2014, 12:19 AM
According to Spence*, the haircut was sizeable. His understanding being that of the ~£5m owed, HBOS accepted ~£2.5m.

*well, according to my father, who heard Spence on tonight's Sportsound.
I think either he misheard or Spency misspoke. The debt (term and overdraft) was widely quoted post Goodwillie to be about £3.7m and falling. Perhaps that was a lie, I guess, or perhaps the club overspent by £1.3m in the past few months to improve its negotiating position. Those new dugouts must've been pretty pricey. We could ask the company that installed them, if only there was any information as to their identity ...

If HBOS really is accepting 50p in the pound from solvent businesses, you'll find me queueing at the door at 9am.
Isn't there an additional £1m overdraft?
That would make the sum nearer the £5m Spence quoted.
My father said he was pretty explicit about the figures and stated a 5% rate of interest for our new overlords.
He also said ST was on the programme talking things over regarding the long term nature of the investment and explaining it wasn't money for the club per se, more a group of people who want United to be part of a wider community scheme for the benefit of Dundee as a whole.
Edited by reekie, Feb 8 2014, 10:36 AM.
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vvhatsthatonyourback
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wild eyed
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Naebody
Feb 7 2014, 11:10 PM
Where the f*ck has that lot come from?

Look, United remains pretty much as deep in debt as it was yesterday. HBOS might have taken a haircut to encourage the debt off its books but I'd guess you'd only be looking at ~5% of the total. Barely a Scott Allan.

What's new is that a consortium of private individuals now own the debt. On what terms? Dunno. But from what's reported it seems reasonable to assume that Thomson has put in a controlling amount of cash into the consortium. So we're in the bind of having the CEO as the main shareholder and the main debtholder. This is the opposite of an escape route for Eddie. He's running a business to pay off the debt he owes himself to avoid interest payments to himself so he can pay a dividend to himself. Brilliant.

You can argue that benevolent smalltime creditors are nicer to have than a big heartless bank. You can also argue that a big heartless bank is structurally better equipped than a smalltime creditor to support a business, particularly when the latter's benevolence is not guaranteed. And with Capt'n Pantsdown embedding himself in United's financial workings like a tapeworm, why should be assume the long-term benevolence of the other parties he's massively incentivised to dick over? Admittedly I'm drunk right now, but I'm suddenly feeling a lot less positive about this development. 49/51%.
While I think you've made a fundamental mistake in reading TheDean's comment, let alone responding to it, your final paragraph is a good one.

The assumption most Utd fans are making is that being free from the rigours of bank debt is an unequivocably good thing. While it may be a pain in the arse to deal with HBoS, and while they may have no intention of doing anything other than protecting the money Utd owed them whilst trying to get the hell out of Scottish football, the discipline and limitations put on a club by having a bank all over you might have some positives. Hard to appreciate positives if you are at the sharp end of the experience, but at least as a high profile customer of the bank it is not in their interests from a PR point of view to shaft you like they have done a lot of other reasonably solvent companies with £6m turnover.

Being free of the bank could help create circumstances a whole lot more unstable for the club in the long term, and the possibilities of a big fall out could be quite nasty indeed.
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the.mule
Ian McCall
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Sometimes the Dean will say something that make the Dundee United board members sit up and take notice. Some of his other observations are less astute. It's this inconsistency which has prevented him being elected to the board.
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Naebody
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Twat
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Mule. Seriously. Never change.

reekie
Feb 8 2014, 10:35 AM
Isn't there an additional £1m overdraft?
That would make the sum nearer the £5m Spence quoted.
My father said he was pretty explicit about the figures and stated a 5% rate of interest for our new overlords.
He also said ST was on the programme talking things over regarding the long term nature of the investment and explaining it wasn't money for the club per se, more a group of people who want United to be part of a wider community scheme for the benefit of Dundee as a whole.
That's another thing. Businesses don't, or shouldn't, have overdrafts. They have working capital, which is lumpy and sometimes requires short-term borrowing. If the overdraft stood at ~£1m for any length of time, that's just debt. Stupidly expensive debt.

Media reports both current and historic are woefully vague so it's safe to assume nothing. But if we did assume the £5m figure is right, it'd suggest that in five years and after £3m+ of player sales, Stephen Thompson reduced the debt by less than £1m. Does that sound right?
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TheDean
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Naebody
Feb 7 2014, 11:10 PM
Admittedly I'm drunk right now, but I'm suddenly feeling a lot less positive about this development. 49/51%.
Clearly a frequent event
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TheDean
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Naebody
Feb 8 2014, 05:22 PM
Mule. Seriously. Never change.

reekie
Feb 8 2014, 10:35 AM
Isn't there an additional £1m overdraft?
That would make the sum nearer the £5m Spence quoted.
My father said he was pretty explicit about the figures and stated a 5% rate of interest for our new overlords.
He also said ST was on the programme talking things over regarding the long term nature of the investment and explaining it wasn't money for the club per se, more a group of people who want United to be part of a wider community scheme for the benefit of Dundee as a whole.
That's another thing. Businesses don't, or shouldn't, have overdrafts. They have working capital, which is lumpy and sometimes requires short-term borrowing. If the overdraft stood at ~£1m for any length of time, that's just debt. Stupidly expensive debt.

Media reports both current and historic are woefully vague so it's safe to assume nothing. But if we did assume the £5m figure is right, it'd suggest that in five years and after £3m+ of player sales, Stephen Thompson reduced the debt by less than £1m. Does that sound right?
No
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reekie
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lum raker
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I have no idea if that sounds right or not but Spence definitely said (having re-checked with my dad) that the debt was £3.4m and there was indeed an overdraft of £1m.
I make that £4.4m of debt that's just been settled for £2.5m.
Remember, this is a club that had a debt of ~£5.5m when Eddie Thompson took over and, according to ST, within a year this stood at £8.5m.
So, I think he's done okay, myself.
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