nick
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Post by nick on Oct 12, 2016 14:47:26 GMT
I'm looking forward to reading the VR on this. It seems to me ( having no interest in football whatsoever) that the value of the stadium and grounds would be very much tied to the fortunes of the club who play there? and that unless the land has a very good chance of development for another purpose, the underlying security might be a bit dodgy. Hoping to be proved wrong by a clear objective VR and information on the resident football club. LW I totally agree re that value of the stadium and grounds being offered as security are very dependent on the fortunes of the club as also highlighted by the VR. Financially, the club is showing net assets of £843k as at 31 May 2015 (helped by a £4.7M revaluation during that year) and net current liabilities of £4.7M. Given the financials aren't inspiring, I hope to get some comfort over recent form on the pitch. They are currently 3rd in the league, but have lost their last 3 matches and only came 16 out of 24 last year.........any football fans that give comment/context? Overall I'm struggling to get comfortable with the interdependence of the valuation of the security and the fortunes of the club.
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baldpate
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Post by baldpate on Oct 12, 2016 14:56:24 GMT
Overall I'm struggling to get comfortable with the interdependence of the valuation of the security and the fortunes of the club. You've put your finger on the main weakness of this proposition, nick. It is the main reason why it will be one of the (very few) MT loans in which I shall not be participating.
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Post by Deleted on Oct 12, 2016 15:10:30 GMT
Yeah, I won't be in this one for the exact same reasons.
A bit too much correlation with the fortunes of ****** FC on the pitch... both for security valuation and borrower financial health.
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registerme
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Post by registerme on Oct 12, 2016 15:32:01 GMT
I feel the same. I'll be sitting this one out.
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Post by Deleted on Oct 12, 2016 15:39:42 GMT
Heh, maybe the answer is a hedge on betfair... relegation odds market  |
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stevio
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Post by stevio on Oct 12, 2016 16:15:28 GMT
This does seem like the equivalent of betting on a football match
If the club win, they get more money, all's good, we bet the right way
If the club don't win, they don't get money and they default, all's not well, we bet the wrong way
This would take unbelievably long time to find a buyer and sell, the valuation is based entirely on lease back to FC, but if they have defaulted, can't see they would have money to lease back?
The loan is simply to prop up the failing club (take out existing finance, look for another ground, redevelop existing site). If they were profitable, why wouldn't they would have done this themselves?
12% and 50%LTV is definitely not worth the unpredictability of this loan, not even with cashback offered - if it was backed by further assets from the owner, maybe
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Post by Deleted on Oct 12, 2016 16:35:28 GMT
Anyone got a copy of 'Football Manager 2016' with recent club finances, player salaries etc? |
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hazellend
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Post by hazellend on Oct 12, 2016 17:42:06 GMT
I think this loan will fill okay. I like the low LTV. It will be hard to sell at full price but at 50% LTV should shift ok. I'm going in big with double my minimum usual.
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Post by amber on Oct 12, 2016 18:06:28 GMT
I think this loan will fill okay. I like the low LTV. It will be hard to sell at full price but at 50% LTV should shift ok. I'm going in big with double my minimum usual. I'm sure the loan will fill, I just think there are other property loan being offered elsewhere at the higher interest rates without the complications of a very specialised property whose value is going to plummet if the lender goes under.
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Post by Deleted on Oct 12, 2016 18:41:07 GMT
Indeed, if ****** FC fold, who is going to line up to buy lower-league standard stadium outside a major city, if the main income stream used for valuation (sale and leaseback to the team) is impaired?
Sure, there is some 'hope value' there for future planning permission, but thats a big leap of faith.
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fp
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Post by fp on Oct 12, 2016 18:54:29 GMT
The club don't own the property, the property is owned by a property developer... club fails, most likely a problem solved from his point of view.  |
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SteveT
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Post by SteveT on Oct 12, 2016 18:59:12 GMT
The club don't own the property, the property is owned by a property developer Not according to the loan details provided by MT. Do you have reason to doubt them?
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Post by karloshi on Oct 12, 2016 18:59:15 GMT
As a supporter of a team in the same league (with a similar if not slightly better ground and facilities) who have in recent history been through administration I am not convinced it is even worth half of what it is valued at. Ours was valued around the 1.5 million mark. Some of their own supporters on their fans forum think they will go bust before the season is over.
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fp
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Post by fp on Oct 12, 2016 19:01:45 GMT
The club don't own the property, the property is owned by a property developer Not according to the loan details provided by MT. Do you have reason to doubt them? I've maybe misunderstood it Steve, will pop back and have a better look....  *EDIT* Seems you are correct, however it is a first charge against the ground, question is now, would it recoup a minimum of 320k per acre after costs, that leaves us relying on hope value for PP
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jonah
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Post by jonah on Oct 12, 2016 20:04:33 GMT
I must admit, this is a very rare 'pass' for me on MT, too much of a binary bet. Good luck to those taking part.
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