Club Signs Stadium Contract

[chimneys]

Have you EVER known a bank make a public announcement that it is lending a customer some money?

Or do you have an expectation that the Football Club will make an announcement that gives us all the details? Why would they do that? Apart from anything else, they've said all along that they won't jeopardise anyone's position (including that of any lenders) by breaching commercial confidentiality.

I'm with Big Gully on this one.

Nowhere does Big Gully mention getting all the funding details. But an announcement that funding is secured, which hasnt been forthcoming from Martin yet, should be possible if it is!

The bottom line here is this is a step in the right direction, but Martin, with this contract signing press release and his official opening ceremony, is massively raising the expectations of the fans as proved on this thread.

A more modest "things are ticking along OK" until all issues, most importantly the funding, are defintely in place, would be a wiser way to deal with the fans. Can you imagine the backlash if the funding doesnt come through after all this hype, which must be a possibility in this financial climate, City College or no City College.

 

[The Large One]

Well large business continually announce that 'funding is in place' irrespective of commercial confidentiality.

If the club will not make such an announcement and just sign the relevant contracts and start the works then great, I am genuinely pleased as it was this funding that I would suspect to be the critical part.

So I will celebrate tonight.

Martin Perry has already said 'funding is already flowing'.

That's some kind of announcement.

 

[BigGully]

Martin Perry has already said 'funding is already flowing'.

That's some kind of announcement.

ambiguous ......

 

[Lokki 7]

Have you EVER known a bank make a public announcement that it is lending a customer some money?

He's not saying that he expects that though is he, so why imply that he is? And actually yes I have heard banks make those announcements for what it is worth.

Or do you have an expectation that the Football Club will make an announcement that gives us all the details? Why would they do that? Apart from anything else, they've said all along that they won't jeopardise anyone's position (including that of any lenders) by breaching commercial confidentiality.

Again, he's not saying that they should or would. He is saying that when the funding is agreed, the club will make public the fact, not the details. Because they haven't, we can be fairly confident in assuming that full funding is not yet in place.

I think some of the stick BigGully is getting here is over the top. What he is saying is actually correct whether you like it or not.

 

[BigGully]

I'm with Big Gully on this one.

Nowhere does Big Gully mention getting all the funding details. But an announcement that funding is secured, which hasnt been forthcoming from Martin yet, should be possible if it is!

The bottom line here is this is a step in the right direction, but Martin, with this contract signing press release and his official opening ceremony, is massively raising the expectations of the fans as proved on this thread.

A more modest "things are ticking along OK" until all issues, most importantly the funding, are defintely in place, would be a wiser way to deal with the fans. Can you imagine the backlash if the funding doesnt come through after all this hype, which must be a possibility in this financial climate, City College or no City College.

Well LB has intimated that the club will never say in fact legally could never say that the 'we have secured the funding' it surprises me but that is what he said.

If so then the signing of the contract might be more pertinent.

But if as I had thought the club would announce the securing of the necessary funds then my concerns for the funding continues.

'funds are flowing' and signing a 'contract with Buckingham' seem an effort to allay the fans fears, thats fine, but not a reason to celebrate just yet.

 

[Lord Bracknell]

This is an imaginary scenario. The point of it is to illustrate how the funding can be in place, construction can start, but no announcement can be made about what the funding arrangements are.

The project costs £60 million. £45 million needs to be raised from loans. Three banks have said they are interested in being involved.

Bank A has said they will lend up to £30 million, provided the other £15 million can be raised elsewhere.

Bank B has said they will lend up to £25 million, provided the other £20 million can be raised elsewhere.

Bank C has said they will lend up to £20 million, provided the other £25 million can be raised elsewhere.

The three banks have all quoted different repayment terms. Bank A wants to charge a high rate of interest, and wants the loan paid over 40 years (making for a low annual interest payment). Banks B and C are happy with a lower rate of interest, but want their loan repaid over 30 years (making for proportionally higher annual interest payments).

Which deal is best? Should the Club borrow money from two banks or three? Which ones? Maybe they should keep negotiating? Maybe they should strike the deals now? What do the financial advisors suggest? Maybe, at this stage, it's best that the offers from each bank are not revealed to the other banks?

Any which way the bits fall into place, there's going to be enough money to pay the contractor.

The contractor is shown the evidence to prove that this is the case. So the contractor starts building, even though the finance deals haven't been finally settled. The details can't be released.

Are you worried? I'm not. And neither is the contractor.

 

[DJ Leon]

Well LB has intimated that the club will never say in fact legally could never say that the 'we have secured the funding' it surprises me but that is what he said.

If so then the signing of the contract might be more pertinent.

But if as I had thought the club would announce the securing of the necessary funds then my concerns for the funding continues.

'funds are flowing' and signing a 'contract with Buckingham' seem an effort to allay the fans fears, thats fine, but not a reason to celebrate just yet.

You're doing very well in finding the negative in a very positive story. I can't for the life of me imagine what you think the Buckingham Group are doing signing a contract where they have no assurances about the funding of the project.

 

[Deadly Danson]

I'm with Big Gully on this one.

Nowhere does Big Gully mention getting all the funding details. But an announcement that funding is secured, which hasnt been forthcoming from Martin yet, should be possible if it is!

The bottom line here is this is a step in the right direction, but Martin, with this contract signing press release and his official opening ceremony, is massively raising the expectations of the fans as proved on this thread.

A more modest "things are ticking along OK" until all issues, most importantly the funding, are defintely in place, would be a wiser way to deal with the fans. Can you imagine the backlash if the funding doesnt come through after all this hype, which must be a possibility in this financial climate, City College or no City College.

D'ya know - genuinely I give up on Albion fans. This is GOOD news. If all we had heard in the last few weeks was "things are ticking along OK" this board would be full of doom merchants telling us that "it's all gone quiet", "no one's telling us anything", "a friend of a friend heard's that the stadium is never gonna happen", "I've heard we've had to halve capacity to get it built" etc etc. Bloody hell, there are some miserable fans out there. Let's enjoy this news as another stepping stone on one hell of a journey, have a bit of faith in the board and if, and I don't believe this for one second, there are funding issues in the future let's worry about it then. So much of watching this club over the years has been hard work that any bit of good news gets a big from me.

 

[Lokki 7]

Are you worried? I'm not. And neither is the contractor.

As long as those 3 banks are not Lehman Brothers, Hypo Real Estate and Washington Mutual I'm not worried either.

 

[aftershavedave]

The contractor is shown the evidence to prove that this is the case. So the contractor starts building, even though the finance deals haven't been finally settled. The details can't be released.

in this scenario there would be a couple of simple steps:

1) assess whether the offers from A B and C are conditional only on the total finance package being met; then

2) announce that 'funding has been secured' (which it has). nobody expects the details, 'details' are pretty irrelevant.

but that's not where we are is it?

 

[BigGully]

You're doing very well in finding the negative in a very positive story. I can't for the life of me imagine what you think the Buckingham Group are doing signing a contract where they have no assurances about the funding of the project.

Give me one reason they wouldnt want to involve themselves in a signing of a contract that gives them the work ONLY if the necessary funds are in place, there is no risk to their company and when BHA secure the funds they have a very prestigious works.

I am not saying that either party should not sign it, if they wish.

It is the next leap of faith that some on here then wish to take, which is that this somehow shows that the necessary funds are in place.

 

[Westdene Seagull]

Mate, I know I grumble and whine more and more every day, but to be honest I'm sick of it all now. In fact the whole club is pissing me off at the moment.

As for Falmer, well at the end of the day we've been told "three years" so until then I'm not interested in it (unless of course we hear that because of some more fantastic news that it's being delayed a bit longer).

Grumpy Old Man alert !

 

[chimneys]

This is an imaginary scenario. The point of it is to illustrate how the funding can be in place, construction can start, but no announcement can be made about what the funding arrangements are.

The project costs £60 million. £45 million needs to be raised from loans. Three banks have said they are interested in being involved.

Bank A has said they will lend up to £30 million, provided the other £15 million can be raised elsewhere.

Bank B has said they will lend up to £25 million, provided the other £20 million can be raised elsewhere.

Bank C has said they will lend up to £20 million, provided the other £25 million can be raised elsewhere.

The three banks have all quoted different repayment terms. Bank A wants to charge a high rate of interest, and wants the loan paid over 40 years (making for a low annual interest payment). Banks B and C are happy with a lower rate of interest, but want their loan repaid over 30 years (making for proportionally higher annual interest payments).

Which deal is best? Should the Club borrow money from two banks or three? Which ones? Maybe they should keep negotiating? Maybe they should strike the deals now? What do the financial advisors suggest? Maybe, at this stage, it's best that the offers from each bank are not revealed to the other banks?

Any which way the bits fall into place, there's going to be enough money to pay the contractor.

The contractor is shown the evidence to prove that this is the case. So the contractor starts building, even though the finance deals haven't been finally settled. The details can't be released.

Are you worried? I'm not. And neither is the contractor.

I'm sorry Lord B, but I am! Banks are changing their lending criteria/margins daily, believe me! Until they commit it cannot be guarenteed they will honour any offer which might or might not currently be on the table. If Martin/KPMG are playing them off, thats a very dangerous thing to do in this market.

I appreciate yours is only a hypothetical example, but probably not far off the truth. All 3 banks will want first charge on whatever assets we will have upon completion. So who's coming up with the rest of the funding on top of the Grants/City College money? If a private individual will he/she have that money when its needed in these troubled times.

Finally, and let us pray this never comes to pass for us, but all borrowing is ultimately payable back on demand (as a number of corporations have found recently) even when funding is in place!

I fully appreciate they are the experts and should know what they are doing, but it doesnt do any harm to put a different spin on such matters and perhaps temper expectations the way the club should be at this delicate time.

Bottom line-I'm still worried but hopeful!

 

[Lord Bracknell]

in this scenario there would be a couple of simple steps:

1) assess whether the offers from A B and C are conditional only on the total finance package being met; then

2) announce that 'funding has been secured' (which it has). nobody expects the details, 'details' are pretty irrelevant.

All that would happen then is that someone would ask "Where's the money coming from?" The answer from the Club would have to be "We don't know". That would be crazy.

 

[Easy 10]

I think we can all accept that the club does not have a swiss bank account with a £65m desposit sitting in it just waiting to be splurged on the stadium. If thats what the doubters are crying out for as an assurance that "funds are in place", then when that guarantee is not forthcoming, of course they're not going to believe the thing will ever get built, and the doubts will continue to be expressed.

What we have been told is that a robust business plan is in place to fund the building of the stadium. B&HCC and the Buckingham Group have agreed, hence todays news, and we are told work will start this month.

Outside of Perry opening a vein and writing in blood that the stadium will open in August 2011, there's not really a lot more that can be said, is there ?

 

[lost in london]

f***ing Hell. Get a grip everyone, a fantastic new stadium is one step closer. Yes, it would have been better if Martin Perry had come round to each of our houses and delivered the news personally, along with the loan agreements they are negotiating with the banks so that he could get our views on them - but he hasn't, so accept it as a very positive step, and go into the weekend with a smile on your face.Have you seen what our stadium is going to look like? It's fan-bleedin-tastic (fingers crossed that a picture appears, not done this before)

[/URL][/IMG]

 

[Lord Bracknell]

I'm sorry Lord B, but I am! Banks are changing their lending criteria/margins daily, believe me! Until they commit it cannot be guarenteed they will honour any offer which might or might not currently be on the table. If Martin/KPMG are playing them off, thats a very dangerous thing to do in this market.

I appreciate yours is only a hypothetical example, but probably not far off the truth. All 3 banks will want first charge on whatever assets we will have upon completion. So who's coming up with the rest of the funding on top of the Grants/City College money? If a private individual will he/she have that money when its needed in these troubled times.

Finally, and let us pray this never comes to pass for us, but all borrowing is ultimately payable back on demand (as a number of corporations have found recently) even when funding is in place!

I fully appreciate they are the experts and should know what they are doing, but it doesnt do any harm to put a different spin on such matters and perhaps temper expectations the way the club should be at this delicate time.

Bottom line-I'm still worried but hopeful!

As you imply ... a project like this is all about managing risk.

The Club has recognised this for years ... hence the decision to pay for some top quality advice. Projects go wrong when arrogant millionaires imagine that they can do without advice.

 

[aftershavedave]

All that would happen then is that someone would ask "Where's the money coming from?" The answer from the Club would have to be "We don't know". That would be crazy.

the answer of course would actually be: " we have a syndicate of bankers in place. funding is secured. we cannot obviously disclose the commercial details, and you wouldn't expect us to"

not crazy at all.

 

[BigGully]

This is an imaginary scenario. The point of it is to illustrate how the funding can be in place, construction can start, but no announcement can be made about what the funding arrangements are.

The project costs £60 million. £45 million needs to be raised from loans. Three banks have said they are interested in being involved.

Bank A has said they will lend up to £30 million, provided the other £15 million can be raised elsewhere.

Bank B has said they will lend up to £25 million, provided the other £20 million can be raised elsewhere.

Bank C has said they will lend up to £20 million, provided the other £25 million can be raised elsewhere.

The three banks have all quoted different repayment terms. Bank A wants to charge a high rate of interest, and wants the loan paid over 40 years (making for a low annual interest payment). Banks B and C are happy with a lower rate of interest, but want their loan repaid over 30 years (making for proportionally higher annual interest payments).

Which deal is best? Should the Club borrow money from two banks or three? Which ones? Maybe they should keep negotiating? Maybe they should strike the deals now? What do the financial advisors suggest? Maybe, at this stage, it's best that the offers from each bank are not revealed to the other banks?

Any which way the bits fall into place, there's going to be enough money to pay the contractor.

The contractor is shown the evidence to prove that this is the case. So the contractor starts building, even though the finance deals haven't been finally settled. The details can't be released.

Are you worried? I'm not. And neither is the contractor.

Firstly the contractor would never start building on unsecured funds even when showed an offer ( subject to a million things ), not a chance, he might make a token gesture of building but nothing major, until the deal is secured.

Secondly the scenarios you offer are really not that complicated, if they had these offers on the table a few meetings would determine which deal to have.

I just am not so confident that they have all these deals sitting on their desks, just waiting to sign one or a mix of them.

Funding is desperate for all business at present, our own business plan is likely to be under greater scrutiny due to continued low attendances and even a concern over our league 1 status ( these are bankers, not fans ).

I genuinely hope that the finance will be forthcoming, but I reckon there might be some more work to be done with banks before thats in place.

I will be happy to be proved wrong though.

 

[Lord Bracknell]

the answer of course would actually be: " we have a syndicate of bankers in place. funding is secured. we cannot obviously disclose the commercial details, and you wouldn't expect us to"

not crazy at all.

What about "We have in place a very strong business plan, which will give us full access to the required funding. The plan does include a mortgage, but the borrowing is at a level which is affordable and realistic even in the current extraordinary conditions in the financial markets" ?

Would that satisfy you?