ACL Updates?

[ColonelWasp]

The following was posted on another link on Oct 17.

"So we're learning that the operating company that runs the CBS Arena, ACL, looks likely to avoid going into administration, as a new notice of intention to appoint administrators was filed today. This will give them 10 days of grace to get their house in order."

I presume that this will therefore expire on Thursday and they can they then apply for a further 10 days as Wasps Holdings did if they wish to before an Administrator would need to be appointed?

I spoke to someone yesterday who formerly held a senior position at Wasps and I understand that "talks" are ongoing regarding Wasps Rugby, but I presume that these are also "linked" with what may happen to the Arena in due course as well?

It looks like things will "rumble on" for a while yet, but if anyone has any positive news that would be very welcome.

[Shugs]

Indeed so. And I believe bondholders have been asked to stump up for marketing costs which indicates ACL/The stadium has not attracted the requisite interest. That request, I would imagine, will generate 0 and probably serve to wind bondholders up to breaking point - albeit the point they could take action seems to have passed.

[Westy68]

Doesn’t look good, bond holders unlikely to get their money back

[NellyWellyWaspy]

Given that Wasps indicated that the stadium needed work (was that not the purpose of the big grant they were looking for, but did not get?), chances are no one is willing to buy it for anywhere near the price needed to cover loans secured on it. If that is the case, then it must go in to some form of insolvency, where secured creditors would then receive (eventually) a partial payout. As soon as it is obvious no such sale is likely, it should go in to administration.

It would give any potential owner of Wasps the opportunity to buy the stadium at a 'knockdown' price, at the expense of those secured creditors. I am guessing that the first secured creditors are the bondholders, but that may not be the case. It depends how the bond was originally set up. Only if the bondholders (assuming they are the primary secured creditors) are paid in full, do the next secured creditors get any money. Generally, the secured creditors will not receive a fixed percentage of their debt. Instead it goes in a hierarchy.

If any potential buyer of Wasps wants to play at the CBS Arena, they will have either to buy it, or wait until someone buys it (to clear it of the secured debt) and come to a deal with them. Only then would such a buyer actually buy Wasps. But, that is likely only to happen after ACL goes in to administration. It might be that a potential buyer does not want a lease, but wants to acquire freehold, and that could happen only if the council take the lease back, which in turn cannot happen until ACL goes in to some form of insolvency. It will get very messy with those loans secured on it. My guess is that the Council would be obliged to hand over any proceeds (after costs) to an administrator, but who knows?

It could just as easily end up in Court, with the arena closed for months or even years.

[Westy68]

Would that then effect CCFC or will they still be able to play at the stadium

[Shugs]

NWW, surely no-one was ever going to buy the stadium until it went into administration? Why would you. That being fairly obvious why would anyone blow money on marketing it at this point. For clarity I’m not countering any points of yours I’m just confused as in terms of the process I thought in terms of ACL we were at point D (sale whilst in administration) but it looks like we’re still at A (try and sell as going concern).

[Neils]

Gilbert throws his view in -


https://www.bbc.co.uk/sport/rugby-union/63387627

[NellyWellyWaspy]

Gilbert throws his view in -

https://www.bbc.co.uk/sport/rugby-union/63387627

That is fairly clear, and reveals to me some things.

As to why you would want to buy it before it went in to administration, if it was worth more (net of debt) than you were paying, then that would be the reason. But is appears it is not (especially now lacking Wasps as a certain tenant).

But, that request to bond holders makes it clear that administration is not initially on the cards. I did wonder at that, so a quick chat with my wife and she agrees, it would have to go in to liquidation. Company Voluntary Liquidation (CVL) would normally be where assets less secured debt have a balance that would pay the liquidator. It appears that is unlikely.

The only other choice is to allow ACL to go in to Compulsory Liquidation (which is what happened to Wasps). But, a creditor has to take Court action for that to happen, and that costs money ... the secured creditors (the bondholders) will not as they can simply wait for liquidation and sale of the arena lease.

However, I am far from sure how secure they are. They cannot have security over the freehold, as the Council own that, so they have security over the lease only, and, when in liquidation, the Council can cancel the lease without compensation, and re-sell it, leaving the bondholders with nothing.

It would appear that nobody is willing to pull the trigger. I guess the directors of ACL should stop trading and make everyone redundant. But, doing so they would be obliged to put some money in to pay for a CVL to happen, to cover the fees of the Liquidator.

This is going to get very messy. But yes, as Westy said, the bond holders and other creditors could be left with nothing. Eventually, someone will pick up the stadium for cheap. Maybe even CCFC. If I were the new lease owner, would I let Wasps back? Maybe, if the price was right. What would happen with CCFC's contract if they didn't buy the stadium lease? Null and void. Which means they could be looking for somewhere to play also.

[Westy68]

That would be disappointing if the bond holders lose out.

To be honest I'm so sick of Coventry I will have no sympathy if things went belly up for CCFC

[NellyWellyWaspy]

That would be disappointing if the bond holders lose out.

To be honest I'm so sick of Coventry I will have no sympathy if things went belly up for CCFC

I am a local lad, so Coventry is 'in the blood'. Sky Blues fan since I was maybe 6 (a LONG time ago). I have not been to watch them play since they left Highfield Road, so the only matches I have watched at the Ricoh were rugby matches. The whole saga of how they lost Highfield Road was disgusting, and I lost faith in the owners.

But, I do not want to see Wasps in Coventry any longer. I could care not a fig if CCFC have anywhere to play or not. The modern 'fans' disgust me, as do their owners, SISU.

[westwaleswasp]

If it is a choice of Wasps in Cov or no Wasps, then I think we would all rather the former. Question is, will we even have options to go anywhere....

[wasps]

It would be an absolute travesty if after all this it's found that the guarantee of the bond (i.e. against the stadium) is essentially worthless.


The bond was supposedly a safe bet because even if Wasps couldn't pay it, the value of the stadium would see the bond holders repaid.

[Heathen]

The bottom line is that the Coventry venture was flawed from Day 1.

[NellyWellyWaspy]

It would be an absolute travesty if after all this it's found that the guarantee of the bond (i.e. against the stadium) is essentially worthless.


The bond was supposedly a safe bet because even if Wasps couldn't pay it, the value of the stadium would see the bond holders repaid.

I agree, if it turns out that the security was worthless if ACL went in to liquidation. If so, was the prospectus misleading? This may be the reason that HSBC and other potential backers pulled out. They saw that the security was that. Some might argue that all 'investment' is done at risk.

[NellyWellyWaspy]

The bottom line is that the Coventry venture was flawed from Day 1.

In hindsight, yes. Could it ever had worked OK? I am unsure. On balance I would have said no. But, I didn't look really hard at the time. Gift horse, mouth, etc.