blender
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Post by blender on Oct 22, 2019 16:03:05 GMT
Clearly not able, criston. These assets seem to be of the type which have value when the company is successful (which we hope will be the case) but which may crumble in value if needed as security. Look at 67,68 and 85. A cautious lender might consider this as an unsecured loan with no personal guarantee. Anyone who lent on the first tranche as a holder of 85, hoping for rescue, is not going to be happy.
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Post by ablrate on Oct 23, 2019 7:53:36 GMT
The businesses were taken over quickly and essentially 'as is' from the administrator. The analysis of the business was such that BN had spent circa £2 million per venue on the fit out and these assets needed to be reflected. Rather than itemise each asset they were classed a good will. There is a process of itemization ongoing for our purposes but that will not be available any time soon.
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Post by ladywhitenap on Oct 23, 2019 8:42:42 GMT
We have to accept that B********r have got their own priority ranking but they need to realise that presenting their business case to lenders maybe needs to be higher up the list if they are going to get loan parts filled to support the other priorities.
LW
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blender
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Post by blender on Oct 23, 2019 9:16:09 GMT
We have to accept that B********r have got their own priority ranking but they need to realise that presenting their business case to lenders maybe needs to be higher up the list if they are going to get loan parts filled to support the other priorities. LW Quite right. The £3.15m figure is still untested. To my simple mind it seems that this business has been funded by a debt to the owner/director of £2.6m and a loan is required from Ablrate lenders of up to £2.5m. The use of funds is a more complex matter but not controlled by Ablrate. One would hope that by the time the Ablrate lenders are carrying a substantial part of the risk, some tangible security will be provided, other than goodwill in recognition of the spending of cash by a previous failed owner of the venues. On the plus side it seeks to rescue four three Ablrate loans, which will incentivise holders of those loans.
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Post by westcountry on Oct 23, 2019 9:50:31 GMT
The businesses were taken over quickly and essentially 'as is' from the administrator. The analysis of the business was such that BN had spent circa £2 million per venue on the fit out and these assets needed to be reflected. Rather than itemise each asset they were classed a good will. There is a process of itemization ongoing for our purposes but that will not be available any time soon. Fair enough, I can understand the assets being lumped together under the heading of 'Goodwill', even if it doesn't make strict accounting sense. But the addendum refers to "the 'Goodwill' line in the projections", and I cannot find this 'Goodwill' line in any of the documents uploaded for loans 131 or 134. I've been through the borrowing proposal, the financial projections, and the Sept 2019 trading review (only uploaded to loan 134) and none of these documents have a balance sheet with a line showing 'Goodwill'. The Financial projections document has a balance sheet, but the assets are only divided into Fixed assets & Current assets - there is no line showing 'Goodwill'. Please can you show me where I can find "the 'Goodwill' line in the projections" that the loan addendum refers to, ablrate? Is there a document that should be uploaded to these loans but isn't?
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macq
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Post by macq on Oct 23, 2019 10:56:54 GMT
We have to accept that B********r have got their own priority ranking but they need to realise that presenting their business case to lenders maybe needs to be higher up the list if they are going to get loan parts filled to support the other priorities. LW Quite right. The £3.15m figure is still untested. To my simple mind it seems that this business has been funded by a debt to the owner/director of £2.6m and a loan is required from Ablrate lenders of up to £2.5m. The use of funds is a more complex matter but not controlled by Ablrate. One would hope that by the time the Ablrate lenders are carrying a substantial part of the risk, some tangible security will be provided, other than goodwill in recognition of the spending of cash by a previous failed owner of the venues. On the plus side it seeks to rescue four three Ablrate loans, which will incentivise holders of those loans.
i agree with most of that apart from the last line and had been thinking along the same lines a couple of weeks back with the first loan(but you said it better ) But i am not sure it is an incentive for people in the other loans as it could also be a case of not adding to the same conundrum as it was for me
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blender
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Post by blender on Oct 23, 2019 12:54:14 GMT
I was trying to be balanced. It is for the lenders on the TS loans to judge. My point was that for those not in those loans this business is carrying liabilities in a subsidiary. I am sure that the owner/director is an excellent financial manager, but the corollary is that he is also very good at maximising the credit obtainable against assets and in minimising personal exposure to downside risk. That is all as it should be.
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Post by westcountry on Oct 31, 2019 15:33:36 GMT
The businesses were taken over quickly and essentially 'as is' from the administrator. The analysis of the business was such that BN had spent circa £2 million per venue on the fit out and these assets needed to be reflected. Rather than itemise each asset they were classed a good will. There is a process of itemization ongoing for our purposes but that will not be available any time soon. Fair enough, I can understand the assets being lumped together under the heading of 'Goodwill', even if it doesn't make strict accounting sense. But the addendum refers to "the 'Goodwill' line in the projections", and I cannot find this 'Goodwill' line in any of the documents uploaded for loans 131 or 134. I've been through the borrowing proposal, the financial projections, and the Sept 2019 trading review (only uploaded to loan 134) and none of these documents have a balance sheet with a line showing 'Goodwill'. The Financial projections document has a balance sheet, but the assets are only divided into Fixed assets & Current assets - there is no line showing 'Goodwill'. Please can you show me where I can find "the 'Goodwill' line in the projections" that the loan addendum refers to, ablrate ? Is there a document that should be uploaded to these loans but isn't? ablrate, please could you answer my above question, as to where I can find the document with "the 'Goodwill' line in the projections" which the loan addendum refers to? Without knowing where to find this document, the addendum feels like a bit of a smokescreen I'm afraid Which is a surprise, as my experience of ABLRate on other matters has been that you are pretty reliable & honest!
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brush
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Post by brush on Nov 18, 2019 16:45:10 GMT
Probably need a correction on 134 update from 28th of December to 28th of November Ablrate.
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criston
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Post by criston on Sept 15, 2020 16:53:48 GMT
£3.15m assets. £680k loan. Currently 22% LTV which would increase with further tranches.
15% interest instead of 13%. Does 15% remain ?
Looks good, but am I missing something ?
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Post by df on Sept 15, 2020 17:35:38 GMT
£3.15m assets. £680k loan. Currently 22% LTV which would increase with further tranches. 15% interest instead of 13%. Does 15% remain ? Looks good, but am I missing something ? Trading at par on SM now... 15% remains and to me the risk/return ratio seems about right. One could probably exit this loan with a small discount imminently now - I'm not doing this, quite happy to risk with the amount I have with this borrower.
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criston
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Post by criston on Sept 15, 2020 18:28:00 GMT
Having read the earlier posts in this thread, I have read the proposal to try & determine the make up of the assets.
I am not sure if it includes bricks & mortar although it does state -
'The first ranking debenture will give lenders direct recourse to all the current and future assets of the Company which include ownership of the three venues'
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criston
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Post by criston on Sept 20, 2020 7:56:44 GMT
Having read the earlier posts in this thread, I have read the proposal to try & determine the make up of the assets. I am not sure if it includes bricks & mortar although it does state - 'The first ranking debenture will give lenders direct recourse to all the current and future assets of the Company which include ownership of the three venues'
I am adding the following, so that in future I remember answers to my own questions. Abstracts from documents appear to mean there are not any 'bricks & mortar' assets & the assets appear to be mostly equipment. 'RENT DEPOSITS: Another improvement available to the Company is reducing monthly rental payments. To achieve these however, another short term cashflow demand is required. Making larger rental deposits to landlords allows the Company to negotiate the best rental deal on a premise.'
'The management team were able to, however, while visiting all the sites, clearly identify that all the venues were fitted out to a very high specification during their fits outs carried out in 2017/18 and the sites remain in good condition today. From the limited historical information they have been able to obtain and following discussions with staff at the operation level of the business the average fit out cost per site was in an excess of £2m.'
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blender
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Post by blender on Sept 20, 2020 12:01:51 GMT
My understanding is that the three venues are owned by subsidiary companies of the borrower, and that Ablrate lenders have a debenture over the borrower company and its subsidiaries. Through that there is a claim on the bricks and mortar assets of the venues, to the extent that those are realisable by the owning subsidiary. However, I think you are wise to evaluate it as you have because Ablrate lenders have no direct charge on the venues themselves as property. Sometimes this means that someone else does have such a charge and that the net value to the debenture is rather limited. At the time of the loan the borrower had £2.6M of debt - you could investigate how that was secured, I can't remember and I have never lent on this. (Is your red historical?)
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ilmoro
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Post by ilmoro on Sept 20, 2020 12:31:05 GMT
My understanding is that the three venues are owned by subsidiary companies of the borrower, and that Ablrate lenders have a debenture over the borrower company and its subsidiaries. Through that there is a claim on the bricks and mortar assets of the venues, to the extent that those are realisable by the owning subsidiary. However, I think you are wise to evaluate it as you have because Ablrate lenders have no direct charge on the venues themselves as property. Sometimes this means that someone else does have such a charge and that the net value to the debenture is rather limited. At the time of the loan the borrower had £2.6M of debt - you could investigate how that was secured, I can't remember and I have never lent on this. (Is your red historical?) Ablrate has fixed & floating charges over the subsidiaries so AIUI will have direct charges over the venues as the floating charge will crystallise into a fixed charge at the point the security is enforced. It could only be superceded by a specific fixed charge being granted.
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