TitoPuente
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Post by TitoPuente on Sept 24, 2021 8:51:44 GMT
The Facebook page shows the business as "Permanently closed". Last post announces a "Closing down party" for 10 and 11 September. Previous post states "As of Sunday 13th September, J*** R***'s Irish bar will be under NEW operations and NEW management". Don't we deserve an update ablrate ?
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blender
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Post by blender on Sept 24, 2021 9:28:45 GMT
Ablrate Assets Ltd have a 10% shareholding in the borrower and a directorship - so they should know what is going on.
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squid
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Post by squid on Sept 24, 2021 9:29:07 GMT
One of the pubs in the other loans is also described as 'permanently closed' on a popular pubs listing website. A new update about those loans would be good too.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Sept 24, 2021 16:23:57 GMT
The Facebook page shows the business as "Permanently closed". Last post announces a "Closing down party" for 10 and 11 September. Previous post states "As of Sunday 13th September, J*** R***'s Irish bar will be under NEW operations and NEW management". Don't we deserve an update ablrate ? Appear to have heard you as update to that effect added. Nice to see lenders are keeping them informed
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criston
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Post by criston on Sept 25, 2021 7:52:06 GMT
When a loan interest is capitalised, is it set against capital gains for tax purposes ?
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nick
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Post by nick on Sept 25, 2021 8:16:22 GMT
When a loan interest is capitalised, is it set against capital gains for tax purposes ? No. It is still taxed as income when actually received. An extreme example are zero coupon bonds (debt issued at a discount to par with no payments until maturity when the debt is redeemed at par). Whilst non of the cash flows are labelled as "interest", the discount effectively is and is taxed as income on repayment. Whether it gets reported correctly by ABL in the tax report is a different matter. I've in the past have had to make adjustments to get to the correct figures.
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criston
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Post by criston on Sept 25, 2021 12:13:43 GMT
Am I right in thinking capitalised interest will be around 20% of holding ?
And a good chunk of that would have been applied for the 2020/2021 tax year.
It's a pity we do not have an up to date valuation, but in 2017 before all the refurbishment works, it was valued at £1m.
The loan was £470k, so with 20% capitalisation is now £564k giving LTV of 56% based on out of date undervalued information.
That's when & if we can get our hands on it & based on 129 only.
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blender
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Post by blender on Sept 25, 2021 16:25:39 GMT
Am I right in thinking capitalised interest will be around 20% of holding ? And a good chunk of that would have been applied for the 2020/2021 tax year. It's a pity we do not have an up to date valuation, but in 2017 before all the refurbishment works, it was valued at £1m. The loan was £470k, so with 20% capitalisation is now £564k giving LTV of 56% based on out of date undervalued information. That's when & if we can get our hands on it & based on 129 only. The only purpose of loan 129 was as a savior loan for 67 & 68, which were rendered almost worthless when the borrower part demolished the pub and went into admin. If we now look at repaying 129 only then that loan would be a big failure if there failed to be any recovery of 67 and 68. The scheme was unwise, imo, but was dealt a large blow by COVID. Before this capitalisation of interest the outstanding was £1176k, and if you add 20% £1410k. The original valuation of £1m was based on the market value of a trading business successfully grown in future by the borrower for a few years and generating earnings of £180k. If you hold 129 as the first charge loan for £470k then you might in a couple of years hope for the pub to be sold and the capital and interest repaid. If you hold 67 as the second charge loan for £515k you need to be a considerable optimist. If you hold 68 as the third charge loan for £191k, then you might look forward to some eventual tax relief, imo.
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criston
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Post by criston on Sept 26, 2021 7:36:25 GMT
Well put, in a nutshell & a sobering thought for 68.
The lesson has not been learned though, with a similarity on the horizon.
Because, 98 loans later; that loan actually starts heavily in the red & then initially goes even further into the red when conversion work starts, as it starts getting knocked about. It definitely needs to last the course.
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blender
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Post by blender on Sept 26, 2021 15:02:31 GMT
Well put, in a nutshell & a sobering thought for 68. The lesson has not been learned though, with a similarity on the horizon. Because, 98 loans later; that loan actually starts heavily in the red & then initially goes even further into the red when conversion work starts, as it starts getting knocked about. It definitely needs to last the course. I agree that a lesson has not been learned, though not quite the same as you have in mind. This type of development loan generally starts with a demolition and a reduction in site value (and in 67/8 a zeroing of the very business which was the basis of the valuation). You can take security on other assets, but then the loan would be less than 14% plus fees. I don't see anything wrong with loans like 67/8 or 166, provided that the platform ensures that the loan cash is applied to the purpose stated - the redevelopment. With 67/8 presumably most of the cash disappeared into the group and when the group failed the cash was not there to be recovered, or used on the development. I think that made Abl determined to set things right with 129, but Covid struck. Another example is the notorious Funding Suckers loan at Whitehaven, where the demolition was similarly done, but then further cash tranches were advanced based on false information about work done. Best not to say more about that platform or that 'borrower'. So I think 166 is fine as long as Abl ensure that the cash is used for the development, and not lost into a void, though I agree the valuation is imaginative - and has not been created by Abl. I hope the delay is ensuring that the cash is applied to the development. However, what troubles me is that the lesson of taking care with the conditions and supervision of drawdown of cash does not seem to have been learned with 165. The lack of any explanation rather confirms the fears. Silence speaks volumes.
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criston
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Post by criston on Sept 26, 2021 17:11:00 GMT
166 has all the hallmarks of many of the failed FS loans, as far as the figures are concerned.
Surely Ablrate's monthly fee is for supervision.
The first £350k appears to be handed over to cover the purchase cost, although that is still 100% LTV & not one I would invest in.
The remaining £100k should be handed over in stages as and when work is carried out.
There is absolutely no risk to the borrower here , who does not have a single penny in the project to lose.
Very few lenders would hand out a loan on this basis, certainly not at 9% interest; and probably only P2P companies who are passing the risk on.
The only positive is Ablrate's past ability to pull a rabbit out of the hat when things go wrong, even though that is looking suspect at present.
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criston
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Post by criston on Oct 2, 2021 11:29:53 GMT
It appears tables can be booked online.
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TitoPuente
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Post by TitoPuente on Oct 8, 2021 13:09:19 GMT
ablrate please could you add a one liner update confirming that the business is open, new name (if it's the case) and if you had the chance to visit the site as mentioned in your last update?
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Post by ablrate on Oct 14, 2021 14:56:36 GMT
Hi All
Yes the business is open under the name of 'The venue'. It appears to be trading well and we are arranging a time to visit, probably next week to speak with the new management and discuss the resumption of amortising payments for the loan.
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criston
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Post by criston on Nov 26, 2021 13:17:19 GMT
Borrower pocketing profits, while lenders languish & await a resolution. I theory Ablrate is 10% of the borrower. Do we take it 10% of profits are going to ablrate Please advise.
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