G STAR RAM Posted January 9, 2016 Share Posted January 9, 2016 2 hours ago, Rampage said: Mel may not own the whole stadium. DCFC own the stadium. Link to comment Share on other sites More sharing options...
uttoxram75 Posted January 9, 2016 Share Posted January 9, 2016 The remaining loan on the stadium was refinanced on favourable terms when Mel took over. We're in good shape, well financed, well run and very ambitious but with a long term plan of sustainability. Link to comment Share on other sites More sharing options...
admira Posted January 10, 2016 Share Posted January 10, 2016 6 hours ago, G STAR RAM said: I think Martin Lewis' advice is aimed at individuals rather than companies. Are you suggesting that MM should have cleared the mortgage rather than buying Bradley? Not exactly. Just that £6.5 is probably chicken feed to generous Mel so I wonder why he retains a debt that is costing the club interest. Link to comment Share on other sites More sharing options...
WorksopRam Posted January 10, 2016 Share Posted January 10, 2016 Can you even pay it all at once? Or have you got to do it to the terms agreed, so they get the interest from us and stuff? Link to comment Share on other sites More sharing options...
Rampage Posted January 10, 2016 Share Posted January 10, 2016 10 hours ago, G STAR RAM said: DCFC own the stadium. Wasn't it a separate concern at some point? Link to comment Share on other sites More sharing options...
R@M Posted January 10, 2016 Share Posted January 10, 2016 8 hours ago, admira said: Not exactly. Just that £6.5 is probably chicken feed to generous Mel so I wonder why he retains a debt that is costing the club interest. Read my post on the last page. Also remembered that the coop were investigated over the loan, probably why they wrote off so much and another likely reason for a very favourable interest rate. 8 hours ago, WorksopRam said: Can you even pay it all at once? Or have you got to do it to the terms agreed, so they get the interest from us and stuff? You can pay any loan off in one go. It depends on the the terms of the the loan as to how much of the interest needs to be paid. i can only think that the interest on the loan is less than than the interest the repayable balance is accumulating in the bank, or that repaying it now would affect FFP. Mazing Mel is too clever to pay interest for no reason! Link to comment Share on other sites More sharing options...
G STAR RAM Posted January 10, 2016 Share Posted January 10, 2016 6 hours ago, Rampage said: Wasn't it a separate concern at some point? Yes believe it was in a separate company but isn't now Link to comment Share on other sites More sharing options...
Herdwick Ram Posted January 10, 2016 Share Posted January 10, 2016 Regarding the interest on the loan - what I was trying to say is there is probably no point in paying it off, as the loan is/was at a very low interest rate. Also, it probably represents a low loan to value percentage. Say you've got £6.5m cash, you might invest it and want a return of 5% = £325k. If you're paying interest on a £6.5m loan at say 2% ( suspect it was actually less than that ) = £130k - that means you're £195k better off ..... result ! Link to comment Share on other sites More sharing options...
R@M Posted January 10, 2016 Share Posted January 10, 2016 32 minutes ago, Herdwick Ram said: Regarding the interest on the loan - what I was trying to say is there is probably no point in paying it off, as the loan is/was at a very low interest rate. Also, it probably represents a low loan to value percentage. Say you've got £6.5m cash, you might invest it and want a return of 5% = £325k. If you're paying interest on a £6.5m loan at say 2% ( suspect it was actually less than that ) = £130k - that means you're £195k better off ..... result ! Haven't I already said this? ? Link to comment Share on other sites More sharing options...
Tamworthram Posted January 10, 2016 Share Posted January 10, 2016 56 minutes ago, Herdwick Ram said: Regarding the interest on the loan - what I was trying to say is there is probably no point in paying it off, as the loan is/was at a very low interest rate. Also, it probably represents a low loan to value percentage. Say you've got £6.5m cash, you might invest it and want a return of 5% = £325k. If you're paying interest on a £6.5m loan at say 2% ( suspect it was actually less than that ) = £130k - that means you're £195k better off ..... result ! Having worked in financial services for over 30 years I've never known a circumstance whereby you can borrow money at a lower rate of interest than you can invest it (unless you're prepared to accept a high risk). That's not how the financial markets work. Having said that, the interest probably is quite low but I doubt if it's less than 2%. Link to comment Share on other sites More sharing options...
Chris Mills Posted January 10, 2016 Share Posted January 10, 2016 6 minutes ago, Tamworthram said: Having worked in financial services for over 30 years I've never known a circumstance whereby you can borrow money at a lower rate of interest than you can invest it (unless you're prepared to accept a high risk). That's not how the financial markets work. Having said that, the interest probably is quite low but I doubt if it's less than 2%. In our case investment include new players, training facilities, new contracts etc. Not necessarily just having money sat accumulating interest Paying off the Stadium would probably cost us 6.5m towards FFP. It's a waste of 6.5m that could be used towards getting us up. Link to comment Share on other sites More sharing options...
Rev Posted January 10, 2016 Share Posted January 10, 2016 It's probably tax efficient, when these things make little sense to the layman that's normally the reason. Link to comment Share on other sites More sharing options...
Diag Ram Posted January 10, 2016 Share Posted January 10, 2016 42 minutes ago, Chris Mills said: In our case investment include new players, training facilities, new contracts etc. Not necessarily just having money sat accumulating interest Paying off the Stadium would probably cost us 6.5m towards FFP. It's a waste of 6.5m that could be used towards getting us up. Paying back the mortgage early would actually benefit the FFP position. The repayment of the loan doesn't affect the club's profit, only the interest on it. Early repayments= less interest. Link to comment Share on other sites More sharing options...
Gaspode Posted January 11, 2016 Share Posted January 11, 2016 13 hours ago, Tamworthram said: Having worked in financial services for over 30 years I've never known a circumstance whereby you can borrow money at a lower rate of interest than you can invest it (unless you're prepared to accept a high risk). That's not how the financial markets work. Having said that, the interest probably is quite low but I doubt if it's less than 2%. It is possible - my father worked for the Midland Bank and bought his house in the late 1950s - he got such a low interest rate (as a member of staff) that it was never in his interests to pay off the mortgage - he kept it going almost until the day he retired.... The one thing we can be sure of is that Mel won't be leaving the mortgage running on the stadium without good cause - and don't forget that he has a pretty healthy sum of money to invest (significantly more that the £6.5M on the stadium) so he may well be in a position to get better rates of return on his wad than the amount the club are paying out.... Link to comment Share on other sites More sharing options...
Herdwick Ram Posted January 11, 2016 Share Posted January 11, 2016 Tamworthram ; This goes back several years - possibly to the LoG - when the stadium was in the books for c£15m. There was a comment back then that the only debt was on the stadium which had been re-mortgaged and that the interest rate was very favourable. I don't have the accounts to hand, but if you care to check I think you might find that it was ridiculously low ? BTW, I'm paying 0% interest on my credit card balance and getting 3% on my deposits - earns me a few £ in the short term ..... so it is possible Link to comment Share on other sites More sharing options...
Shang Posted January 11, 2016 Share Posted January 11, 2016 Reading this makes me think how lucky we are. http://m.bbc.co.uk/sport/football/35281349 Link to comment Share on other sites More sharing options...
R@M Posted January 11, 2016 Share Posted January 11, 2016 20 hours ago, Tamworthram said: Having worked in financial services for over 30 years I've never known a circumstance whereby you can borrow money at a lower rate of interest than you can invest it (unless you're prepared to accept a high risk). That's not how the financial markets work. Having said that, the interest probably is quite low but I doubt if it's less than 2%. Further to the standard 0% cc interest rates, I worked in debt management and complaints for various banking institutions, and can confirm that there are rates available to be exploited. Following a complaint ( potentially after the dodgy initial dealings) a favourable rate could be offered, or indeed a zero % if independent adjudicators deemed we had paid enough interest already. Also, the club was close to administration, the bank could have decided to cut its losses and just accept the outstanding loan amount without any further interest, interest that could have put the club over the edge and meant nothing would be re-paid . These scenarios are just speculation, but happen in banking business all the time. Link to comment Share on other sites More sharing options...
Brammie Steve Posted January 12, 2016 Share Posted January 12, 2016 We? What you mean we, paleface? Link to comment Share on other sites More sharing options...
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