Wasps fans claim they're 'left in dark' and ask club for answers

[Agosto blond snowpack]

Yes, the football club would have 15-20k coming in. But they will be taking the cash for that. The council would, in essence, just be collecting a rent and maybe a % of food etc. On the flip side they have to run the stadium with all the costs that brings. Add to that the fact that they don’t get on well with the football club and it’s not a palatable scenario for them. The football club certainly don’t want to own it and virtually said as much as recently as a couple of weeks ago. So CCFC’s best hope is that things carry on as they are.

Sorry this is just not correct

You seem confused with the Head Lease and ACL

ACL will not be owned by the Council. ACL will be in administration and run by administrators until a buyer is actually found.

The rent is paid to ACL

The council will have the lease returned to them and would obviously then seek to sell the Head Lease back to the new owner of ACL 2006 LTD.

You make too much of this. When wasps crash and burn the loan goes with it. It would then attract IEC type organisations or owners who want a potential Premier League Football Club

Wasps are a small company and cannot manage a stadium of this diveristy - it lacks expertise and finance - it would be better having someone with that experience now for all parties and the City of Cioventry

[Bloke in North Dorset]

Now now Sam don’t let your bitterness creep in - it was only a lighthearted comment. I should ask - what do you think the natural consequence is if Wasps did go pop. Your owners don’t want the stadium. The council don’t. You’d be back on the phone to Northampton/Birmingham/Burton.

If it is just because of the debt burden, as opposed to be able to fund the daily operations, there's a good chance the administrator sells the club for a price that means it can continue as a going concern and the secured creditors walk away with whatever they can. This has to be a better deal than liquidating the assets because, to be brutal, who is going to buy the players at "market value" and what is the Wasps brand worth as a standalone entity?

I’m not sure there would be a lot left after the bond holders have taken what was offers as security - basically everything including proceeds from sale of P shares.

Taken from the bonds prospectus -

intentionally deleted to save space

Apologies, I obviously didn't make my point clearly.

There seems to be an expectation in some quarters that if Wasps "go bust", that is go in to administration, they will be immediately shut down, the Rugby team disappears and CCFC get to be sole users of the stadium.

If they go in to administration, the point I made, the courts will protect the business while the administrator tries to find a solution that satisfies the creditors and keep the business running. At this point the bondholders are just another creditor, albeit a senior one who I agree will likely get most of the proceeds when the administrator either sells the business or liquidates it. There is a ranking of debt seniority, with Wasps Holdings shareholders being at the very bottom, as it should be.

Of course there are circumstances where they would be immediately shut down, the players and staff sent home and all operations stopped*: if the cash flows are obviously not enough to cover day to day operations and don't look like they ever will and the financial situation will only get worse, but nobody has said that is the case and if that is the case the Directors are currently trading fraudulently, unless they have made personal pledges, AIUI.

*I've been in that situation, receiving the (expected) call from the administrator as I sat in Heathrow airport on the way to see a client, its quite a brutal process and if it happened someone would in to the business and tell everyone to go home, or more likely they'd receive texts telling them not to come to work because it would happen at 6am.

[Bloke in North Dorset]

Yes, sorry BIND. I ought to qualify by saying I don’t think that will happen (Wasps going pop). I was putting the question to Sam to address the common narrative amongst quite a number of CCFC fans (not necessarily Sam) that equates wasps leaving with CCFC owning or continuing to play in the stadium.

My fault Shugs, as you were the latest to talk about it I used your post as the reference, I didn't mean to imply you thought they would.

[SBSam]

Now now Sam don’t let your bitterness creep in - it was only a lighthearted comment. I should ask - what do you think the natural consequence is if Wasps did go pop. Your owners don’t want the stadium. The council don’t. You’d be back on the phone to Northampton/Birmingham/Burton.

If it is just because of the debt burden, as opposed to be able to fund the daily operations, there's a good chance the administrator sells the club for a price that means it can continue as a going concern and the secured creditors walk away with whatever they can. This has to be a better deal than liquidating the assets because, to be brutal, who is going to buy the players at "market value" and what is the Wasps brand worth as a standalone entity?

I’m not sure there would be a lot left after the bond holders have taken what was offers as security - basically everything including proceeds from sale of P shares.

Taken from the bonds prospectus -

intentionally deleted to save space

Apologies, I obviously didn't make my point clearly.

There seems to be an expectation in some quarters that if Wasps "go bust", that is go in to administration, they will be immediately shut down, the Rugby team disappears and CCFC get to be sole users of the stadium.

If they go in to administration, the point I made, the courts will protect the business while the administrator tries to find a solution that satisfies the creditors and keep the business running. At this point the bondholders are just another creditor, albeit a senior one who I agree will likely get most of the proceeds when the administrator either sells the business or liquidates it. There is a ranking of debt seniority, with Wasps Holdings shareholders being at the very bottom, as it should be.

Of course there are circumstances where they would be immediately shut down, the players and staff sent home and all operations stopped*: if the cash flows are obviously not enough to cover day to day operations and don't look like they ever will and the financial situation will only get worse, but nobody has said that is the case and if that is the case the Directors are currently trading fraudulently, unless they have made personal pledges, AIUI.

*I've been in that situation, receiving the (expected) call from the administrator as I sat in Heathrow airport on the way to see a client, its quite a brutal process and if it happened someone would in to the business and tell everyone to go home, or more likely they'd receive texts telling them not to come to work because it would happen at 6am.

Out of genuine interest, have you read the binds prospectus? It looks to me as if the bondholders get everything to sell. I also guess it all depends who triggers administration. Presumably it wouldn’t be Wasps because Richardson has said it’s not going to happen.

It seems that Wasps finance owe the money to bondholders and that Wasps finance are, in turn, owed that sum by ACL. I suppose WF can call in administration and hence have control a bit like how SISU orchestrated their situation. It’s all very complicated.

[Bloke in North Dorset]

Now now Sam don’t let your bitterness creep in - it was only a lighthearted comment. I should ask - what do you think the natural consequence is if Wasps did go pop. Your owners don’t want the stadium. The council don’t. You’d be back on the phone to Northampton/Birmingham/Burton.

If it is just because of the debt burden, as opposed to be able to fund the daily operations, there's a good chance the administrator sells the club for a price that means it can continue as a going concern and the secured creditors walk away with whatever they can. This has to be a better deal than liquidating the assets because, to be brutal, who is going to buy the players at "market value" and what is the Wasps brand worth as a standalone entity?

I’m not sure there would be a lot left after the bond holders have taken what was offers as security - basically everything including proceeds from sale of P shares.

Taken from the bonds prospectus -

intentionally deleted to save space

Apologies, I obviously didn't make my point clearly.

There seems to be an expectation in some quarters that if Wasps "go bust", that is go in to administration, they will be immediately shut down, the Rugby team disappears and CCFC get to be sole users of the stadium.

If they go in to administration, the point I made, the courts will protect the business while the administrator tries to find a solution that satisfies the creditors and keep the business running. At this point the bondholders are just another creditor, albeit a senior one who I agree will likely get most of the proceeds when the administrator either sells the business or liquidates it. There is a ranking of debt seniority, with Wasps Holdings shareholders being at the very bottom, as it should be.

Of course there are circumstances where they would be immediately shut down, the players and staff sent home and all operations stopped*: if the cash flows are obviously not enough to cover day to day operations and don't look like they ever will and the financial situation will only get worse, but nobody has said that is the case and if that is the case the Directors are currently trading fraudulently, unless they have made personal pledges, AIUI.

*I've been in that situation, receiving the (expected) call from the administrator as I sat in Heathrow airport on the way to see a client, its quite a brutal process and if it happened someone would in to the business and tell everyone to go home, or more likely they'd receive texts telling them not to come to work because it would happen at 6am.

Out of genuine interest, have you read the binds prospectus? It looks to me as if the bondholders get everything to sell. I also guess it all depends who triggers administration. Presumably it wouldn’t be Wasps because Richardson has said it’s not going to happen.

It seems that Wasps finance owe the money to bondholders and that Wasps finance are, in turn, owed that sum by ACL. I suppose WF can call in administration and hence have control a bit like how SISU orchestrated their situation. It’s all very complicated.

That was my point, if the directors put it in to administration or other creditors ask the courts do do it cf HMRC with Worcester then there is a legal process.

Until then, AIUI, Wasps can’t pay off other junior creditors until the bond has been paid off. 

[Shugs]

Yes, the football club would have 15-20k coming in. But they will
 be taking the cash for that. The council would, in essence, just be collecting a rent and maybe a % of food etc. On the flip side they have to run the stadium with all the costs that brings. Add to that the fact that they don’t get on well with the football club and it’s not a palatable scenario for them. The football club certainly don’t want to own it and virtually said as much as recently as a couple of weeks ago. So CCFC’s best hope is that things carry on as they are.

Sorry this is just not correct

You seem confused with the Head Lease and ACL

ACL will not be owned by the Council. ACL will be in administration and run by administrators until a buyer is actually found.

The rent is paid to ACL

The council will have the lease returned to them and would obviously then seek to sell the Head Lease back to the new owner of ACL 2006 LTD.

You make too much of this. When wasps crash and burn the loan goes with it. It would then attract IEC type organisations or owners who want a potential Premier League Football Club

Wasps are a small company and cannot manage a stadium of this diveristy - it lacks expertise and finance - it would be better having someone with that experience now for all parties and the City of Cioventry

And the buyer got ACL is?

[SBSam]

Now now Sam don’t let your bitterness creep in - it was only a lighthearted comment. I should ask - what do you think the natural consequence is if Wasps did go pop. Your owners don’t want the stadium. The council don’t. You’d be back on the phone to Northampton/Birmingham/Burton.

If it is just because of the debt burden, as opposed to be able to fund the daily operations, there's a good chance the administrator sells the club for a price that means it can continue as a going concern and the secured creditors walk away with whatever they can. This has to be a better deal than liquidating the assets because, to be brutal, who is going to buy the players at "market value" and what is the Wasps brand worth as a standalone entity?

I’m not sure there would be a lot left after the bond holders have taken what was offers as security - basically everything including proceeds from sale of P shares.

Taken from the bonds prospectus -

intentionally deleted to save space

Apologies, I obviously didn't make my point clearly.

There seems to be an expectation in some quarters that if Wasps "go bust", that is go in to administration, they will be immediately shut down, the Rugby team disappears and CCFC get to be sole users of the stadium.

If they go in to administration, the point I made, the courts will protect the business while the administrator tries to find a solution that satisfies the creditors and keep the business running. At this point the bondholders are just another creditor, albeit a senior one who I agree will likely get most of the proceeds when the administrator either sells the business or liquidates it. There is a ranking of debt seniority, with Wasps Holdings shareholders being at the very bottom, as it should be.

Of course there are circumstances where they would be immediately shut down, the players and staff sent home and all operations stopped*: if the cash flows are obviously not enough to cover day to day operations and don't look like they ever will and the financial situation will only get worse, but nobody has said that is the case and if that is the case the Directors are currently trading fraudulently, unless they have made personal pledges, AIUI.

*I've been in that situation, receiving the (expected) call from the administrator as I sat in Heathrow airport on the way to see a client, its quite a brutal process and if it happened someone would in to the business and tell everyone to go home, or more likely they'd receive texts telling them not to come to work because it would happen at 6am.

Out of genuine interest, have you read the binds prospectus? It looks to me as if the bondholders get everything to sell. I also guess it all depends who triggers administration. Presumably it wouldn’t be Wasps because Richardson has said it’s not going to happen.

It seems that Wasps finance owe the money to bondholders and that Wasps finance are, in turn, owed that sum by ACL. I suppose WF can call in administration and hence have control a bit like how SISU orchestrated their situation. It’s all very complicated.

That was my point, if the directors put it in to administration or other creditors ask the courts do do it cf HMRC with Worcester then there is a legal process.

Until then, AIUI, Wasps can’t pay off other junior creditors until the bond has been paid off.

I think that’s right, but the bondholders could get in first and just take possession of everything for onward sale.

[Rifleman Harris]

But would the bondholders be able to organise and execute that sort of thing quickly enough? Surely if there was any sniff of that then the directors would move first to protect themselves to some degree...or maybe I'm being naïve?

[SBSam]

Yes, the football club would have 15-20k coming in. But they will
 be taking the cash for that. The council would, in essence, just be collecting a rent and maybe a % of food etc. On the flip side they have to run the stadium with all the costs that brings. Add to that the fact that they don’t get on well with the football club and it’s not a palatable scenario for them. The football club certainly don’t want to own it and virtually said as much as recently as a couple of weeks ago. So CCFC’s best hope is that things carry on as they are.

Sorry this is just not correct

You seem confused with the Head Lease and ACL

ACL will not be owned by the Council. ACL will be in administration and run by administrators until a buyer is actually found.

The rent is paid to ACL

The council will have the lease returned to them and would obviously then seek to sell the Head Lease back to the new owner of ACL 2006 LTD.

You make too much of this. When wasps crash and burn the loan goes with it. It would then attract IEC type organisations or owners who want a potential Premier League Football Club

Wasps are a small company and cannot manage a stadium of this diveristy - it lacks expertise and finance - it would be better having someone with that experience now for all parties and the City of Cioventry

And the buyer got ACL is?

The original deal says that the head lease returns to the council, and this is pointed out by the bonds prospectus alongside saying this would be challengeable in the courts. That original condition could put off traditional finance houses from refinancing as the process for crystallising that as security might not be straightforward. Who knows who would end up with ACL.

[SBSam]

But would the bondholders be able to organise and execute that sort of thing quickly enough? Surely if there was any sniff of that then the directors would move first to protect themselves to some degree...or maybe I'm being naïve?

I honestly don’t know, but if it is possible it would seem to make the bondholders security somewhat flakey.

[Bloke in North Dorset]

But would the bondholders be able to organise and execute that sort of thing quickly enough? Surely if there was any sniff of that then the directors would move first to protect themselves to some degree...or maybe I'm being naïve?

I honestly don’t know, but if it is possible it would seem to make the bondholders security somewhat flakey.

i think the bond holders would have to go through the courts, same as HMRC with Worcester. I’m speculating now, but there would have to be some large proportion of bond holders that approve the move because it would mean they risk losing their capital.

[Shugs]

That’s my point Sam - ACL/Council don’t want it. It’s a fairly niche usage thing. Anyway, I think it’s moot - Wasps bond will get worked out.

[SBSam]

But would the bondholders be able to organise and execute that sort of thing quickly enough? Surely if there was any sniff of that then the directors would move first to protect themselves to some degree...or maybe I'm being naïve?

I honestly don’t know, but if it is possible it would seem to make the bondholders security somewhat flakey.

i think the bond holders would have to go through the courts, same as HMRC with Worcester. I’m speculating now, but there would have to be some large proportion of bond holders that approve the move because it would mean they risk losing their capital.

As the redemption date has passed and no variation been approved, just 25% of bondholders by value could force foreclosure.

[SBSam]

That’s my point Sam - ACL/Council don’t want it. It’s a fairly niche usage thing. Anyway, I think it’s moot - Wasps bond will get worked out.

I really don’t understand what you are trying to say about ACL / Council - particularly ACL. Unless you have some insider information I am surprised at your confidence about the bonds. I know this is repetitive, but you thought it would be resolved in a few weeks. If this was CCFC I would be quite worried.