Senile Council Article

[paulsuwb]

Mo and TLB have constantly referred to their bid as upto (oh no that was just a typo honest guv) 5m investment with the understanding they were going to buy 1.2m in shares and loan us the rest to pay of our outstanding debt and invest in the infrastructure of the club.

 

Now it may well be that Mo was hoping to give the council a percentage of what they were owed for an early settlement but why should they accept that? How mental would we go if our pie eating neighbours did the same? Councils are having funding slashed right left and centre, it would be criminally negligent of them to accept reduced terms on our loan and a betrayal of every council tax payer to subsidise Mo's latest venture.

 

If he's loaning us money that should be used to pay off the loans, not get us deeper into debt.

[tisdeano]

Mo and TLB have constantly referred to their bid as upto (oh no that was just a typo honest guv) 5m investment with the understanding they were going to buy 1.2m in shares and loan us the rest to pay of our outstanding debt and invest in the infrastructure of the club.

 

Now it may well be that Mo was hoping to give the council a percentage of what they were owed for an early settlement but why should they accept that? How mental would we go if our pie eating neighbours did the same? Councils are having funding slashed right left and centre, it would be criminally negligent of them to accept reduced terms on our loan and a betrayal of every council tax payer to subsidise Mo's latest venture.

 

If he's loaning us money that should be used to pay off the loans, not get us deeper into debt.

 

with the greatest respect, having to pay off 2 million inside 60 days is quite frankly ridiculous

[AVIM]

I know you like to play devil's advocate on here and don't get me wrong it's a good part to play on here as it stimulates debate (and quite humourous that some people have yet to pick up on it). But you know as well as I do that he was talking in particular about initial investment to purchase shares, as well as paying off the council loan, hence why the £5m figure wasn't mentioned in Chaudry's statements.

 

You are right stupers, I do like to play devil's advocate - I think its important. And, well, someone has to right?

 

And I do agree with you, I understand "that Mo was talking in particular about initial investment to purchase shares, as well as paying off the council loan".

 

So what I don't (honestly) understand is if he was talking about paying off the council loan as being part of his plan, why can he not go ahead with his deal if he needs to clear it in 60 days? Does he not have the cash in place?

[paulsuwb]

with the greatest respect, having to pay off 2 million inside 60 days is quite frankly ridiculous

 

I'd have no problem with paying the council back as we are doing according to the current schedule. I just don't want any more of Mo's money round our neck if we do that.

[AVIM]

I'd have no problem with paying the council back as we are doing according to the current schedule. I just don't want any more of Mo's money round our neck if we do that.

 

I agree paul. I don't want Mo throwing nearly 4m of debt at the club in a all or nothing attempt to get the club up the championship so he can sell at a profit. Because what happens after the money has gone and we are still in this league (no guarantees in football) but now are 7m in debt?

[Santa]

I'd have no problem with paying the council back as we are doing according to the current schedule.

Somebody obviously does because they felt the need to insert a very specific clause at the time.

 

Does anybody remember the furore over the payment terms that Stoke were given when they bought the Britannia Stadium back off the Council? IIRC they were given significantly longer than 60 days to pay for the ground.

 

It makes you wonder whether this genuinely is standard practice in these sort of deals, as Mr Jackson suggests.

[Guest Tony Dyche]

Paul and VFIM, how come you have not commented on the letter from Geoff Wakefield thread?

[tisdeano]

I'd have no problem with paying the council back as we are doing according to the current schedule. I just don't want any more of Mo's money round our neck if we do that.

 

I am glad you agree the 60 day clause is ridiculous

[AVIM]

I am glad you agree the 60 day clause is ridiculous

 

Is it ridiculous though? Its plenty of time to make a bank transfer. All the funding would need to be lined up in advance of a deal. If the funding isn't there, then the deal shouldn't go through.

[Guppy 4 England]

I agree paul. I don't want Mo throwing nearly 4m of debt at the club in a all or nothing attempt to get the club up the championship so he can sell at a profit. Because what happens after the money has gone and we are still in this league (no guarantees in football) but now are 7m in debt?

 

I agree. I dont want the club to have any ambition, im just happy to play in the basement league and have something to do on a saturday as im a sad lonely ba stard with nothing better to do.

[paulsuwb]

Paul and VFIM, how come you have not commented on the letter from Geoff Wakefield thread?

 

Not seen it but will go have a look now, too much going on keep track of at the minute.

[tisdeano]

Is it ridiculous though? Its plenty of time to make a bank transfer. All the funding would need to be lined up in advance of a deal. If the funding isn't there, then the deal shouldn't go through.

 

I take it you have never been involved in acquisitions & mergers ?

[AVIM]

I agree. I dont want the club to have any ambition, im just happy to play in the basement league and have something to do on a saturday as im a sad lonely ba stard with nothing better to do.

 

So you think we should load up the club with a load more debt and run an even larger annual loss just in attempt to play in a higher division? Ambition is fine, reckless gambling is not, imho.

 

The board get slatted for running a 300k annual loss (is this ambition?). Yet you would be happy for someone to come in and run a loss many times that figure just to increase the playing budget?

 

I would be far happier if Mo put 5m in as equity to take 90% of the club (or whatever the maths would work out at). Then he can punt it up the wall, if he fails, we are not lumbered with the debt after he leaves.

[AVIM]

I take it you have never been involved in acquisitions & mergers ?

 

Control passes to Mo on the day the deal is signed, all due diligence and funding work is completed before this date. After that he has 60 days to pay off the council either with cash from his bank, cash from another lender, or (most likely) by rolling the council deal over.

 

He would need a statement in writing fromt he council saying they are happy to roll over the debt if Mo gets control. This would be part of the pre-deal due diligence for both parties.

 

If the council refuse to work with Mo AND he doesn't have the funding to pay them off, then the board should not sell control to him and, equally, he should not want control as he is unable to fund the business.

[stupers]

You are right stupers, I do like to play devil's advocate - I think its important. And, well, someone has to right?

 

And I do agree with you, I understand "that Mo was talking in particular about initial investment to purchase shares, as well as paying off the council loan".

 

So what I don't (honestly) understand is if he was talking about paying off the council loan as being part of his plan, why can he not go ahead with his deal if he needs to clear it in 60 days? Does he not have the cash in place?

 

Absolutely, it makes this website far more interesting than 300 pages of 'couldn't agree more, board out' comments. Where's the interest in that?!

 

As for being forced to pay the council loan off within 60 days, i'm sure he would like to have some negotiation with the council over the repayment of the loan, either in full or installments over the next few years with a sizeable chunk of interest removed from the final repayment(s).

 

Sadly, this clause leaves Mr Chaudry little room to work with in terms of negotiations. And i'm sure the majority of us would like to see Vale get a better deal out of this loan than we currently have (especially the ones living outside S-O-T that don't really care if the council lose out or not!)