mikes1531
Member of DD Central
Posts: 6,453
Likes: 2,320
|
Post by mikes1531 on Jul 25, 2014 19:17:43 GMT
One thing that struck me as odd was the sales director had a salary of 55k yet the advertising budget for the first 15 months was.......... ermmmmmmmmm.......... zero. Every start-up I've ever started-up needed some advertising. Every start-up I've been involved in also had to pay bank charges (zero) and training (also zero). Good points. Maybe the sales director is going to spend all his/her time making personal visits to potential agents and clients?
|
|
kermie
Member of DD Central
Posts: 691 
Likes: 462
|
Post by kermie on Jul 25, 2014 19:30:52 GMT
I note that the LTV at 70% is quite high compared to SS cap on boatie LTVs at 50%.
Edit: I don't know this industry at all, but I find it remarkable that just 7 weeks hire is sufficient to cover costs for the given boat. I am in the wrong game, clearly!
|
|
mikes1531
Member of DD Central
Posts: 6,453
Likes: 2,320
|
Post by mikes1531 on Jul 25, 2014 19:37:35 GMT
That's what I was thinking, earn some shadow interest, and hope it takes for ever to drawdown. The question is, will accrued interest be paid if loan fails to draw down full stop? Someone has asked that question in the Q&A. Someone else asked for confirmation that the pre-drawdown interest would be at the 10.25% rate. AC do say "full interest" in the Note on the Overview page, so I would hope so, but it would be good for AC to confirm that. With respect to shadow bids... Does anyone have experience with making shadow bids on loans where pre-drawdown interest was payable due to delays? I'm curious whether the 'bonus' was paid to the shadow bidders inasmuch as they didn't actually have any funds tied up in their bids. (I do recognise, however, that shadow bidders are obligated to providing the funds when asked, and that commitment deserves some reward.) Perhaps this is another thing that AC should be asked to confirm.
|
|
mikes1531
Member of DD Central
Posts: 6,453
Likes: 2,320
|
Post by mikes1531 on Jul 25, 2014 19:44:12 GMT
I note that the LTV at 70% is quite high compared to SS cap on boatie LTVs at 50%. Edit: I don't know this industry at all, but I find it remarkable that just 7 weeks hire is sufficient to cover costs for the given boat. I am in the wrong game, clearly! ... not to mention that SS have their boats kept in storage for the duration of the loans. Seven weeks rental does seem to me to be a rather low breakeven level. As does the suggestion that the boats would be available for hire only 24 weeks a year.
|
|
kermie
Member of DD Central
Posts: 691
Likes: 462
|
Post by kermie on Jul 25, 2014 19:59:03 GMT
Yeah, and I don't see any mooring fees for a marina for the other 28 weeks of the year. From what I've heard, those are non-trivial. Crew costs also seem low - skipper and host only? I was lucky enough many years ago to get to spend a couple of weeks on a budget yacht (a freebie I might add!) in some far flung place, and there were a whole bunch of crew - more of them than there were of us guests!
|
|
merlin
Minor shareholder in Assetz and many other companies.
Posts: 902
Likes: 302
|
Post by merlin on Jul 25, 2014 20:16:50 GMT
IMHO it would only need one bad summer in the Med to cause this venture some very serious cash flow problems. Could it survive such an event? I haven't got a clue but I can tell you that many similar ventures have folded over the last 50 years when the Med has taken it's turn at being cold, wet and windy. One such venture that I remember folding had a fleet of around 40+ motor cruisers of perhaps an average size of 45ft and six berths mostly if my memory serves me well Princesses. When this business was wrapped-up the boats fetched an average of about 20% of their original cost and a lot of people lost an awful lot of money.
Incidentally I was in the Med off S. France in early Summer last year in a Force 9 storm - seriously unfunny even in a much larger boat!
|
|
mikes1531
Member of DD Central
Posts: 6,453
Likes: 2,320
|
Post by mikes1531 on Jul 25, 2014 21:39:49 GMT
Yeah, and I don't see any mooring fees for a marina for the other 28 weeks of the year. From what I've heard, those are non-trivial. Crew costs also seem low - skipper and host only? I was lucky enough many years ago to get to spend a couple of weeks on a budget yacht (a freebie I might add!) in some far flung place, and there were a whole bunch of crew - more of them than there were of us guests! ISTM that it would take a fair sized crew to handle a 65-foot sailboat. Is the host also the chief cook and washer-upper? And how much catering can be provided on a luxury yacht for £300/week?
|
|
mikes1531
Member of DD Central
Posts: 6,453
Likes: 2,320
|
Post by mikes1531 on Jul 25, 2014 21:42:01 GMT
IMHO it would only need one bad summer in the Med to cause this venture some very serious cash flow problems.
Maybe that's why they're planning to take payment well in advance!
|
|
mikes1531
Member of DD Central
Posts: 6,453
Likes: 2,320
|
Post by mikes1531 on Jul 26, 2014 1:47:09 GMT
The question is, will accrued interest be paid if loan fails to draw down full stop? Someone else asked for confirmation that the pre-drawdown interest would be at the 10.25% rate. AC do say "full interest" in the Note on the Overview page, so I would hope so, but it would be good for AC to confirm that. I've thought of another question we need AC to answer, because they seem to have left themselves a huge loophole... In the 17/Jul Drawdown Update they said that "full interest will be accruing from 4 weeks after drawdown" !! Firstly, I presume they meant to say the same thing they said in the summary description, namely that interest would start accruing 4 weeks after auction closure. Secondly, we need a commitment from them that once they've set an auction end date -- which we'll learn about once the auction starts -- they won't extend it. In the past, they've extended auctions 'to allow lenders to bid out the underwriters'. In general, that's probably a good idea, but if doing that were to put off the date the interest starts accruing it would give them a huge incentive to keep putting off the auction closure until drawdown was imminent. An alternative would be for AC to specify the date interest will start accruing. In that case I don't think anybody would mind if they extended the auction.
|
|
|
|
Post by Ton ⓉⓞⓃ on Jul 26, 2014 7:03:39 GMT
As the boats have a short season this will help to concentrate the minds of everyone to stick to the drawdown schedule, I imagine. It's not just loss of interest to be concerned about if things are delayed.
|
|
merlin
Minor shareholder in Assetz and many other companies.
Posts: 902
Likes: 302
|
Post by merlin on Jul 26, 2014 9:15:20 GMT
As the boats have a short season this will help to concentrate the minds of everyone to stick to the drawdown schedule, I imagine. It's not just loss of interest to be concerned about if things are delayed. Occupancy levels in any form of charter business is always the critical factor which ultimately decides success or failure. In turn occupancy levels are dictated by a whole load of other factors including things like pricing and the competition. I don't see a clear USP for this venture that would help in deciding it's success or failure. I have holidayed in Turkey and the Caribbean and had some great luxury sailing holidays in both but don't somehow see this venture sailing happily into the sunset!
|
|
mikes1531
Member of DD Central
Posts: 6,453
Likes: 2,320
|
Post by mikes1531 on Jul 29, 2014 2:54:11 GMT
On 25th Jul 2014 at 18:19 z asked:
"Will accrued interest still be honoured after 4 weeks if loan fails to draw down at all?" ◦
On 28th Jul 2014 at 08:36 Assetz Capital answered:
"Whilst we will make every effort to ensure this progresses to drawdown we cannot confirm that interest will be paid should loan fail to drawdown."
I we can't count on the pre-drawdown interest then it doesn't provide much of an incentive to invest, does it? And if they can't get investors then it's not going to draw down. This opportunity has been available for over two days, and the total bids made so far come to 0.25% of the amount requested! Barring a miracle, this deal is going to require massive underwriting. If I was interested -- and I don't think I am -- I'd wait until after drawdown when the underwriters' units go up for sale and consider the opportunity at that time.
|
|
bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on Aug 8, 2014 14:08:15 GMT
Looks like this loan is going to fail.....
|
|
merlin
Minor shareholder in Assetz and many other companies.
Posts: 902
Likes: 302
|
Post by merlin on Aug 8, 2014 14:43:37 GMT
Looks like this loan is going to fail..... I am not the least bit surprised. As I had invited other punters to do, Google "Charter Sailing Cruises, and a location like the ones mentioned in the proposal and you will be amazed at the size of the competition that this project will face. There is no doubt there is money to be made in this market but you need a USP and a competitive price to succeed. I don't see either in the proposal.
Must admit I cannot quite understand how Assetz got itself involved with this one!
|
|
niceguy37
Member of DD Central
Posts: 504
Likes: 254
|
Post by niceguy37 on Aug 8, 2014 15:26:19 GMT
I can't comment on the quality of this particular loan, but as far as I am concerned it is not such a bad thing if occasionally a loan doesn't get off the ground - it shows crowd due diligence at work.
|
|
