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Abu Derby County


tinman

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1 hour ago, swanny said:

I dont think 9.14% is exceptionally high for corporate finance of this kind. just been sent an email by a mate who works in equity finance and standard commercial rates are routinely up to 10%. this is higher than banks, because banks wont make those loans due to the exposure and the risk. 

100% agree. I was making the point that if it’s second ranking behind Gabay, the rate on the Dell loan could be significantly higher than 9%. So the Sheikh might have said ‘well that needs to be repaid’. But in order to repay Dell they may be obliged first to repay the Gabay loan - which means they need another £80m which they may not have planned for. That may explain the comments on Twitter that the hold up was with the Gabay liquidator 

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43 minutes ago, kevinhectoring said:

100% agree. I was making the point that if it’s second ranking behind Gabay, the rate on the Dell loan could be significantly higher than 9%. So the Sheikh might have said ‘well that needs to be repaid’. But in order to repay Dell they may be obliged first to repay the Gabay loan - which means they need another £80m which they may not have planned for. That may explain the comments on Twitter that the hold up was with the Gabay liquidator 

I understood from the Athletic that the Gabay loan had been repaid months ago 

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54 minutes ago, kevinhectoring said:

100% agree. I was making the point that if it’s second ranking behind Gabay, the rate on the Dell loan could be significantly higher than 9%. So the Sheikh might have said ‘well that needs to be repaid’. But in order to repay Dell they may be obliged first to repay the Gabay loan - which means they need another £80m which they may not have planned for. That may explain the comments on Twitter that the hold up was with the Gabay liquidator 

Only looked at the football club and parent company but the only charges I can see are in favour of MSD.

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54 minutes ago, kevinhectoring said:

100% agree. I was making the point that if it’s second ranking behind Gabay, the rate on the Dell loan could be significantly higher than 9%. So the Sheikh might have said ‘well that needs to be repaid’. But in order to repay Dell they may be obliged first to repay the Gabay loan - which means they need another £80m which they may not have planned for. That may explain the comments on Twitter that the hold up was with the Gabay liquidator 

That’s not true, you can pay whoever you want off first, it’s only if the clubs hits administrative then the administrators would have to pay it in that order. 
As it’s higher interest you’re likely to pay it off first. 

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16 minutes ago, DCFC27 said:

That’s not true, you can pay whoever you want off first, it’s only if the clubs hits administrative then the administrators would have to pay it in that order. 
As it’s higher interest you’re likely to pay it off first. 

It’s almost definitely true (if the two loans are indeed outstanding). Where two different banks have security over the same assets (the stadium) they will usually have entered into an agreement regulating how the loans are repaid. I think you’re thinking of unsecured lending 

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4 minutes ago, kevinhectoring said:

It’s almost definitely true (if the two loans are indeed outstanding). Where two different banks have security over the same assets (the stadium) they will usually have entered into an agreement regulating how the loans are repaid. I think you’re thinking of unsecured lending 

No fella secured lending is my profession. It only matters when it comes to repossession etc.
When you’re solvent it doesn’t matter, as long as they are receiving the servicing payments the lenders are happy.
If you go insolvent then there is an order of who is paid first that is the 1st charge then the second charge and so on. 
 

To use a real like example if you own a house worth 100k 

You have 1st charge mortgage for 60k at 2% interest and a 20k second charge at 4% interest. 

Your pretty wealthy it was just to aid some cash flow. 
Cashflow is sorted you can pay of the second charge and carry on with your mortgage. 

If you stopped making payments eventually it would be repossessed, in this case the 1st charge is paid first and the second charge after. 
 


 

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20 minutes ago, DCFC27 said:

No fella secured lending is my profession. It only matters when it comes to repossession etc.
When you’re solvent it doesn’t matter, as long as they are receiving the servicing payments the lenders are happy.
If you go insolvent then there is an order of who is paid first that is the 1st charge then the second charge and so on. 
 

To use a real like example if you own a house worth 100k 

You have 1st charge mortgage for 60k at 2% interest and a 20k second charge at 4% interest. 

Your pretty wealthy it was just to aid some cash flow. 
Cashflow is sorted you can pay of the second charge and carry on with your mortgage. 

If you stopped making payments eventually it would be repossessed, in this case the 1st charge is paid first and the second charge after. 
 


 

I agree with your comments about residential mortgage lending but that’s not the lending business we’re talking about 

if you lend 80 million to a football club secured only on the stadium you’ll have a negative pledge. If the borrower asks if he can give another charge, you might agree but you will first require the second chargee to sign pages and pages of subordination documents. As with your example, those documents will most likely allow both loans to be serviced whilst things are going well. But the documents will probably require the first loan to be repaid in full before any principal can be repaid on the second ranking loan. 

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9 minutes ago, kevinhectoring said:

That’s a very easy mistake to make 

Interesting to see that Gellaw Newco 202 have a creditor of £74m which must be related to the ground.

Will be interesting to see how this fits in with other group companies. 

I've said a few times that I don't believe the club has received the £80m for the ground. 

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37 minutes ago, G STAR RAM said:

Interesting to see that Gellaw Newco 202 have a creditor of £74m which must be related to the ground.

Will be interesting to see how this fits in with other group companies. 

I've said a few times that I don't believe the club has received the £80m for the ground. 


trying to piece it together: 202 bought the ground, owed the club 80m, and probably had some capital from MM which it used to fund the club, reducing the 80m. Then in 2019 it drew down the Gabay loan and I would guess used the funds to drip feed cash to the club as required to cover losses, paying down the creditor position further.  They would also have used the cash to cover their own interest. The creditor position would also be reduced to reflect the modest rent paid by the club for the stadium. 
I think the Gabay loan was guaranteed by Mel but would need to check. 
If the Gabay loan is not already repaid by funding from MM, it’s clear how this and the later Dell loan complicate the takeover. 
Not to mention the funds just raised to cover Dec/Jan wages - presumably borrowed by MM and lent to the club or to 202 

It’s all got far too complicated and that must make it all difficult to sell 

 

Edited by kevinhectoring
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8 minutes ago, kevinhectoring said:


trying to piece it together: 202 bought the ground, owed the club 80m, and probably had some capital from MM which it used to fund the club, reducing the 80m. Then in 2019 it drew down the Gabay loan and I would guess used the funds to drip feed cash to the club as required to cover losses, paying down the creditor position further.  They would also have used the cash to cover their own interest. The creditor position would also be reduced to reflect the modest rent paid by the club for the stadium. 
I think the Gabay loan was guaranteed by Mel but would need to check. 
If the Gabay loan is not already repaid by funding from MM, it’s clear how this and the later Dell loan complicate the takeover. 
Not to mention the funds just raised to cover Dec/Jan wages - presumably borrowed by MM and lent to the club or to 202 

It’s all got far too complicated and that must make it all difficult to sell 

 

I did read somewhere that the ground was being paid for over 8 or 10 years (cant remember which it was) but Im yet to find anything to corroborate this.

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11 hours ago, gccrowdpleaser said:

Careful what we wish for in terms of takeover. Many use the Burnley takeover as a stick to beat Derby with. The article from the Guardian makes grim reading. Including some shade thrown at MSD and their astounding interest rates.

https://www.theguardian.com/football/2021/feb/02/burnley-us-takeover-has-left-club-90m-worse-off-and-loaded-with-debt

Grim reading indeed.

Probably best in the long run if the Sheikh falls through. The problem we face is that the club isn't an attractive financial proposition, so it's not easy to find someone with genuine intentions to take it on. 

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2 hours ago, G STAR RAM said:

Interesting to see that Gellaw Newco 202 have a creditor of £74m which must be related to the ground.

Will be interesting to see how this fits in with other group companies. 

I've said a few times that I don't believe the club has received the £80m for the ground. 

Derby County Football Club had a debtor due in more than one year of £74.5m in the accounts to 30/06/18. 
 

Could be the other side to the Gellaw creditor?

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4 minutes ago, Half Fan Half Biscuit said:

Derby County Football Club had a debtor due in more than one year of £74.5m in the accounts to 30/06/18. 
 

Could be the other side to the Gellaw creditor?

Hard to know without all of the group company accounts for the same period.

The other Gellaw Newco may have paid for the ground.

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2 hours ago, kevinhectoring said:


trying to piece it together: 202 bought the ground, owed the club 80m, and probably had some capital from MM which it used to fund the club, reducing the 80m. Then in 2019 it drew down the Gabay loan and I would guess used the funds to drip feed cash to the club as required to cover losses, paying down the creditor position further.  They would also have used the cash to cover their own interest. The creditor position would also be reduced to reflect the modest rent paid by the club for the stadium. 
I think the Gabay loan was guaranteed by Mel but would need to check. 
If the Gabay loan is not already repaid by funding from MM, it’s clear how this and the later Dell loan complicate the takeover. 
Not to mention the funds just raised to cover Dec/Jan wages - presumably borrowed by MM and lent to the club or to 202 

It’s all got far too complicated and that must make it all difficult to sell 

 

Needs someone to look beyond the mess and see the potential, good fan base, modern medium sized stadium that could be expanded, modern training ground. Buyer would need the drive to knock heads together but could end up with a modestly priced club given the assets available, best to negotiate the freeholds. The price could lead to a cash buyer rather than someone looking to borrow their way in. Let's hope so.

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