Bank debt will fall with price of City ground (From Worcester News)

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Bank debt will fall with price of City ground

8:00am Wednesday 30th September 2009

By Steve Carley »

Worcester City will have a reduced debt to pay off now they are to get less for St George’s Lane.

The Blue Square South club owe the best part of £2million to the Royal Bank of Scotland, money that will come from the sale of their ground.

However, because the value of their century-old home is likely to reduce to around £4million, Worcester will only have to pay in the region of £1.2m to the bank.

That is because the figure owed to RBS is proportional to whatever the club can get for the Lane, with Careys New Homes poised to agree a reduced deal.

A formula to work out the amount of debt owed has long been agreed by the club’s board of directors.

Originally, City would have had to part with about £2million had they secured the £7.36m initially reported as the sale price.

City finance director Keith Stokes-Smith confirmed the club would pay less but said: “I am not pleased we are paying the bank less as it means we are getting less for the ground. I would rather have more money for the ground and pay the bank more.”

Worcester, however, will still have far fewer funds available to them to build any new stadium.

On Saturday, chairman Anthony Hampson told a fans’ forum that the move to Nunnery Way was no longer a viable option. However, a City delegation, including director David Hallmark and vice-chairman Jim Panter, yesterday met with Worcester City Council officials, including John Wrightson, head of urban environment.

The Guildhall meeting addressed both the St Modwen application for Nunnery Way and Careys’ plans for the Lane.

Wrightson said: “It was to review progress on the planning applications that the club has an interest in and it’s the sort of thing we do on major applications in any case when we are working up towards finalising the reports and recommendations.

“There are still matters for the club to work out which will have a bearing on how quickly we can bring the applications to the point of decision, but it was a full exchange of views.”

He also said the council would continue to work with the parties involved with the applications until instructed otherwise.

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Comments (7)

8:56am Wed 30 Sep 09

Avante says...

Actually no, the difference between 10.7% of £7.36 million and 10.7% of £4 million is £360,000. So how you figure out the debt will reduce by £800,000 sounds like typical WCFC Commercial Wizardry!!
However, this isnt the issue, and the reduction in the portion of money owed pales into insignificance against the amount of money lost in the new sale price - £3 million lost against a potential £350,000 benefit - not good!!
But thats not the important factor - surely the most important factor is that £800,000 of the debt is due for repayment in December 2009 - thats the loan agreement when the overdraft was converted to a loan. RBS don't appear to want to renegotiate this agreement, so the club has until December 2009 to find £800,000!!
Another factor that's been overlooked is capital gains tax, if there's no roll-over, and with no new ground plans, there won't be, then CGT will be payable on the £4 million - whats that? a further £800,000 tax bill?
If you're going to report on the debt situation, at least have the decency to do your homework Mr Carley, its not difficult, its all laid out in the companies audited accounts! Yet more WN lazy journalism.

Actually no, the difference between 10.7% of £7.36 million and 10.7% of £4 million is £360,000. So how you figure out the debt will reduce by £800,000 sounds like typical WCFC Commercial Wizardry!! However, this isnt the issue, and the reduction in the portion of money owed pales into insignificance against the amount of money lost in the new sale price - £3 million lost against a potential £350,000 benefit - not good!! But thats not the important factor - surely the most important factor is that £800,000 of the debt is due for repayment in December 2009 - thats the loan agreement when the overdraft was converted to a loan. RBS don't appear to want to renegotiate this agreement, so the club has until December 2009 to find £800,000!! Another factor that's been overlooked is capital gains tax, if there's no roll-over, and with no new ground plans, there won't be, then CGT will be payable on the £4 million - whats that? a further £800,000 tax bill? If you're going to report on the debt situation, at least have the decency to do your homework Mr Carley, its not difficult, its all laid out in the companies audited accounts! Yet more WN lazy journalism. Avante

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9:01am Wed 30 Sep 09

RichardW says...

So the Chairman states categorically NW is no longer a viable option and yet Hallmark still goes anyway to represent WCFC in a meeting with the Council regarding the move to Nunnery Way.

The figues didn't add up with a £7.36m sale, the Figues do not add up with a c£4m sale.

If we are all so wrong about this, then how do Hallmark and his Board propose to sustain the Club at Nunnery Way. Oh Sorry, he won't be there as he has already stated his job is to get WCFC to Nunnery Way, then he is off.

So the Chairman states categorically NW is no longer a viable option and yet Hallmark still goes anyway to represent WCFC in a meeting with the Council regarding the move to Nunnery Way. The figues didn't add up with a £7.36m sale, the Figues do not add up with a c£4m sale. If we are all so wrong about this, then how do Hallmark and his Board propose to sustain the Club at Nunnery Way. Oh Sorry, he won't be there as he has already stated his job is to get WCFC to Nunnery Way, then he is off. RichardW

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10:39am Wed 30 Sep 09

mooster says...

According to the Council “There are still matters for the club to work out which will have a bearing on how quickly we can bring the applications to the point of decision, but it was a full exchange of views.”

Presumably one thing they'll have to submit is a new business plan for NW. I believe the 6000 seater stadium with conference and banqueting facilities may be out of their price range. Also the lack of anyone wanting to be part of the enabling development (car showrooms, hotel etc) means the economic case for NW needs ripping up. No doubt re-writing it wil earn someone a few quid

According to the Council “There are still matters for the club to work out which will have a bearing on how quickly we can bring the applications to the point of decision, but it was a full exchange of views.” Presumably one thing they'll have to submit is a new business plan for NW. I believe the 6000 seater stadium with conference and banqueting facilities may be out of their price range. Also the lack of anyone wanting to be part of the enabling development (car showrooms, hotel etc) means the economic case for NW needs ripping up. No doubt re-writing it wil earn someone a few quid mooster

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2:18pm Wed 30 Sep 09

brooksider says...

In administration by Xmas!
If the club struggles on, there will be a 10 point deduction.
Well done David Hallmark and Dave Boddy you deserve each other, Worcester city doesn't.

In administration by Xmas! If the club struggles on, there will be a 10 point deduction. Well done David Hallmark and Dave Boddy you deserve each other, Worcester city doesn't. brooksider

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7:11pm Wed 30 Sep 09

pc says...

So now just £1200000 to repay the bank loan, plus of course up to £250000 for the professional fees facility. Current o/d probably £50000. Various loans from SM and Careys and Directors, say £100000.

Capital gains tax £800000, outstanding creditors say £50000.

Take that lot away from £4000000, which of course is still not certain, leaves £1550000.

Now what can you build for £1.5 million after land purchase and infrastructure costs.

Ask the question SC.

So now just £1200000 to repay the bank loan, plus of course up to £250000 for the professional fees facility. Current o/d probably £50000. Various loans from SM and Careys and Directors, say £100000. Capital gains tax £800000, outstanding creditors say £50000. Take that lot away from £4000000, which of course is still not certain, leaves £1550000. Now what can you build for £1.5 million after land purchase and infrastructure costs. Ask the question SC. pc

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8:23pm Wed 30 Sep 09

wuster says...

A delegation including Hallmark & Panter (Hallmarks other puppet).
We know Boddy is in favour of Nunnery Way, so where does this leave Hampson & Layland as they both seemed to oppose any move to Nunnery Way at the fans forum.

Another split board room as in 2008.

A delegation including Hallmark & Panter (Hallmarks other puppet). We know Boddy is in favour of Nunnery Way, so where does this leave Hampson & Layland as they both seemed to oppose any move to Nunnery Way at the fans forum. Another split board room as in 2008. wuster

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12:08am Thu 1 Oct 09

drbeat says...

It's amazing how no-one questions the issue of debt? You all throw figures about as if they have some importance? Totally amazing! What's even more amazing is that the majority of 'people' are facing exactly the same issue: over-extending themselves or huge exposure to debt!

Now there is a funny side to all of this, and one that shows you're figures up for what they are: it all means 'nothing'. Yep, zilcho, diddly squay...NOWT! Take the above story, RBS did not lend anything...nothing! They simply created the money out of thin air and the club signed an agreement to payback a debt of 'nothing' but with added interest. RBS then SOLD that debt to a couple of Arab and China investors who actually have 'real' money...those investors would then recieve the interest payments plus what they paid...all is great when things are going good! But the problem RBS had (near bankruptcy) is that those investors wanted OUT...that is why RBS are not keen on debt restructure as they have a lot of REAL debt themselves!

And the profit they made on such debt sales? Well it all went towards a fancy new HQ, helicopters, private jets, bonuses and of course HM Treasury.

As for the club, well they and the supporters need to remind RBS that they, their children, their grand children and great grand children have already settled the debt and also saved RBS. The 'Board' just need the balls to say **** to RBS. Will they? I doubt it as they are all cut from the same cloth as the failed bankers!

It's amazing how no-one questions the issue of debt? You all throw figures about as if they have some importance? Totally amazing! What's even more amazing is that the majority of 'people' are facing exactly the same issue: over-extending themselves or huge exposure to debt! Now there is a funny side to all of this, and one that shows you're figures up for what they are: it all means 'nothing'. Yep, zilcho, diddly squay...NOWT! Take the above story, RBS did not lend anything...nothing! They simply created the money out of thin air and the club signed an agreement to payback a debt of 'nothing' but with added interest. RBS then SOLD that debt to a couple of Arab and China investors who actually have 'real' money...those investors would then recieve the interest payments plus what they paid...all is great when things are going good! But the problem RBS had (near bankruptcy) is that those investors wanted OUT...that is why RBS are not keen on debt restructure as they have a lot of REAL debt themselves! And the profit they made on such debt sales? Well it all went towards a fancy new HQ, helicopters, private jets, bonuses and of course HM Treasury. As for the club, well they and the supporters need to remind RBS that they, their children, their grand children and great grand children have already settled the debt and also saved RBS. The 'Board' just need the balls to say **** to RBS. Will they? I doubt it as they are all cut from the same cloth as the failed bankers! drbeat