30-09-2021, 03:52 PM
(30-09-2021, 03:25 PM)Wightblue Wrote: teeftwo
On a general note, debt/loans are not of necessity a bad thing, many on this Board will have a considerable debt called a mortgage, they knowingly took on the debt to buy an asset ie a house to live in and avoiding wasting money on rent. They probably had an eye to appreciation in value of their asset and accepted the interest charge that went with mortgage.
If The Trust had taken on debt to improve/ maintain the ground, the debt would have been accompanied by an increase of the value of the Asset being improved (and hence the NAV ) thus having a minimal effect on The Balance Sheet.
Provided PFC could pay off the interest as it was due from its revenue stream, I don’t see a problem and, interest rates secured against an asset like the ground, would have been at a low rate.
The same with ROKO, provided PFC paid no more than the going rate for the facility, the debt interest should have been sustainable and the price paid transferred to Tangible Assets in The Balance Sheet.
I very much doubt that Eisner will put in cash or PFC will in fact take on debt with regard to the ground improvements.
As I understand it, the work will take 4 to 5 years and will only increase capacity by c.5,000. That surely indicates that the work will be financed from the Club’s revenue stream not Eisner or debt, something the Trust could have done equally as well.
As you are happy with your sale to Eisner that is great, I applaud you.
I only seek to show that the sale to Eisner might not have been the only game in town.
Interesting to note that, with the exception of Bury FC, no other L1 or L2 club has gone bust since the start of Covid, many exist on gates, much, much smaller than ours, perhaps football clubs, their owners and fans are more resilient than many give them credit for.
agree with much of that ... but let down by the 'i very much doubt Eisner will put in cash...'.
We know he has already put in £10m cash for ground works ...it's in the published accounts, and he has committed to the planned works. There is absolutely no reason to think he would try to fund that from the revenue, because he has also made it quite clear that the playing side is an 'eat what you kill' policy, which he has only broken to pay the wages during covid.