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Post by wavydavy on Feb 1, 2018 10:19:15 GMT
I wrote a largely waffly post, now deleted, which I realised boils down to this. The asset value of this loan for us investors is solely derived by what a sponsor is willing to pay. This project has been going for years and years, and does not have a sponsor currently secured. If a sponsor wanted to commit themselves with a formal undertaking subject to the boat being built with FS funding, then it'd be a different matter. But they haven't. So, as far as we know, we're funding the completion of a boat with no real financial value despite what they say it's currently and will be worth. I wish the team well, and there's more to life than money. But they should be being funded by their to-be benefactors, or bridged by us to their to-be benefactors, not by us with the hope of finding benefactors. This makes it sound more like an equity investment that a debt investment... which in reality is what this loan is. Well put
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blender
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Post by blender on Feb 1, 2018 11:42:13 GMT
This position seems very similar to the recent boat project on Ablrate. The borrower was trying to take boat orders on the basis of a prototype, had run out of equity cash, and wished to finance ongoing promotions by borrowing, secured on the supposed value of a prototype. It may be a good project but clearly needed venture capital/ equity. it did not find sufficient lender funds, and Ablrate did not seek to find a way of proceeding, gaining much respect from the lender community.
Too many of these so-called secured loans try to give lenders an equity risk for a loan reward - though I have not seen the detail of this one personally.
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Post by dan1 on Feb 1, 2018 12:02:04 GMT
This position seems very similar to the recent boat project on Ablrate. The borrower was trying to take boat orders on the basis of a prototype, had run out of equity cash, and wished to finance ongoing promotions by borrowing, secured on the supposed value of a prototype. It may be a good project but clearly needed venture capital/ equity. it did not find sufficient lender funds, and Ablrate did not seek to find a way of proceeding, gaining much respect from the lender community.
Too many of these so-called secured loans try to give lenders an equity risk for a loan reward - though I have not seen the detail of this one personally. Reminds me of an excellent tale told by The Investor of Monevator on the upside/downside of equity/bond investing... monevator.com/bonds-are-for-pessimists-shares-are-for-optimists/
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blender
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Post by blender on Feb 1, 2018 13:24:48 GMT
That ought to be required reading, dan1, excellent. And especially the fact that with 'start ups' the borrower will hold the loan only until he/she is able to refinance at better rates (overall). The lender can look forward either to early repayment or perhaps a longer term default. Best to look for a minimum guaranteed interest period. And if it is not amortising, use the SM (if possible) to amortise it yourself at a rate you think appropriate.
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Post by dan1 on Feb 1, 2018 13:34:51 GMT
That ought to be required reading, dan1, excellent. And especially the fact that with 'start ups' the borrower will hold the loan only until he/she is able to refinance at better rates (overall). The lender can look forward either to early repayment or perhaps a longer term default. Best to look for a minimum guaranteed interest period. And if it is not amortising, use the SM (if possible) to amortise it yourself at a rate you think appropriate. My first thought on reading it was of the HP loans on MT that refinanced last year. A very different proposition to mini-bonds but you get my point (at least the MT loans renewed and went to term). I look upon my P2P portfolio very much as junk bonds and it's the reason I won't up my stake even though the income is very welcome. It's pleasing to hear my equity heavy portfolio puts me in the optimists camp.
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adrian77
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Post by adrian77 on Feb 1, 2018 17:41:06 GMT
I am following this saga on Twitter -latest tweet tells me they have nearly blue skys at pussycat
HQ - well hearing that makes my life so much more meaningful!
However their Instagram link shows photos of this boat which seems to have been repainted in the latest colours and clearly is not in storage.
Personally I am not investing any major sum with FS until we get a full explanation as to what is going on with this damn boat. I realise many investors would like this boat to sink with nobody hurt and an insurance payout but what happens if this boats breaks down before or during the next race so no sponsorhip money is forthcoming - lots of rude words from angry punters?
As mentioned before this is a project for the likes of Branson who can afford it and not for secured lending against a realisable asset which this sure isn't. I don't know but my research indicates a fire sale of this boat will be lucky to realise £200K...
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Liz
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Post by Liz on Feb 2, 2018 1:29:20 GMT
"We therefore estimate the current value to be around £1.35m"
Estimating value is scary stuff!
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adrian77
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Post by adrian77 on Feb 5, 2018 16:51:13 GMT
so instead of paying down the original FS loan they are borrowing an additional 250K!
so that is a delay of 18 months and that is assuming there are no more delays
Hello Mr Sponsor "I am vastly over budget on a speeboat which was subject to a major
horlicks as we failed to supervise one of our sub-contractors. I am also at least 18 months behind shedule (longer if we take the original race schedule) We did have a sponsor but he pulled out (as to who it as and why they pulled out, I can guess but won't say here). Our boat is not even built yet so trials have not even commenced - nevertheless can you bung us a few mill as we hope to beat the world circumnavigation record which as you aprreciate simply involves belting around the world non-stop for over 22,000 miles and avoiding all debris within the oceans and not having any mechanical breakdowns - just like Richard Branson's first Atlantic attempt didn't"
Mr Sponsor - "that is not what boathooks were designed for!"
This loan plus interest is well over £1m - maybe I am being thick but I just don't see where the £180K+ interest payment is going to come from.and this is within the next 6 months. Looks to me if this loan application is going to crawl over the finishing line. For fellow investors I hope this boat does but I am not holding my breath.
no need to worry as I read
To be honest I am surprised the above has not been deleted as several North Sea experts have said this is a complete non-starter on safety grounds alone....
I think I will pass on this one.
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blender
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Post by blender on Feb 5, 2018 17:35:49 GMT
Maybe it can take two each of a large number of animals species. That could be priceless.
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greenslime
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Post by greenslime on Feb 5, 2018 18:17:28 GMT
I don't know that much about matters nautical but this
seems odd.
Presumably there is an optimum time of year to begin a circumnavigation if starting from UK, so planning to set out about 7 months later in the year is (very) sub-optimal? Or is this thing such a marvel of design and possesses so much power that it is impervious to considerations of wind and water?
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rogerthat
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Post by rogerthat on Feb 5, 2018 18:32:40 GMT
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mariner
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Post by mariner on Feb 5, 2018 18:56:58 GMT
 For what it's worth FS...it's hopefully setting out from GIBRALTAR...and not Gibralter as per your email  TBH, the amount of errors that FS send out in their communications are absolutely disgraceful, errors that a 12 year old would be ashamed of!! Should we really have confidence in a company who are so lacking in the use of the English language, managing millions of pounds of investor’s money? the way things are going with so many loans, would make it appear that their Arithmetic is as bad, if not worse
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rogerthat
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Post by rogerthat on Feb 5, 2018 19:10:34 GMT
For what it's worth FS...it's hopefully setting out from GIBRALTAR...and not Gibralter as per your email TBH, the amount of errors that FS send out in their communications are absolutely disgraceful, errors that a 12 year old would be ashamed of!! Should we really have confidence in a company who are so lacking in the use of the English language, managing millions of pounds of investor’s money? the way things are going with so many loans, would make it appear that their Arithmetic is as bad, if not worse Well even in my limited time on FS, I have noticed some truly infantile spelling though the trouble is if every error was picked up it might tend to get rather tedious and repetitive..btw that wasn't the only spelling error that I noticed on that mail..but as Gibraltar is a British Overseas Territory..still, I thought it deserved a mention.
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r00lish67
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Post by r00lish67 on Feb 5, 2018 19:18:15 GMT
I don't know that much about matters nautical but this seems odd. Presumably there is an optimum time of year to begin a circumnavigation if starting from UK, so planning to set out about 7 months later in the year is (very) sub-optimal? Or is this thing such a marvel of design and possesses so much power that it is impervious to considerations of wind and water? What's all this about March 12, 2017 anyway? Search for mby.com team B****** round the world". The team was due to start from Gibraltar on 1st November 2015. That article, with great authority, advises that the Nov 2015 date is now "set in stone" 
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blender
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Post by blender on Feb 5, 2018 19:49:04 GMT
I don't know that much about matters nautical but this seems odd. Presumably there is an optimum time of year to begin a circumnavigation if starting from UK, so planning to set out about 7 months later in the year is (very) sub-optimal? Or is this thing such a marvel of design and possesses so much power that it is impervious to considerations of wind and water? What's all this about March 12, 2017 anyway? Search for mby.com team B****** round the world". The team was due to start from Gibraltar on 1st November 2015. That article, with great authority, advises that the Nov 2015 date is now "set in stone" You wanted endurance tested - you got it.
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