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Post by daveoufc on Aug 22, 2017 9:27:23 GMT
I can see a light going on! So, if I have understood this, OUFC owed IL £4 million. DE bought that debt for £1.00 as in he gave IL a quid and was then owed £4 million by OUFC. (sounds like a good deal to me) Ensco 1070 then lent DE enough money to run the club. (DE owns Ensco 1070 so he lent himself his own money - sounds a bit dodgy to me, but what do I know!) Accountant types, how am I doing? Well thats whats being implied I think. But not by me Iam suggesting DE now owes out the £4m debt he bought for a quid to who ever IL borrowed it off or to IL himself.
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Post by oufcyellows on Aug 22, 2017 9:59:16 GMT
Surely that doesn't work though. As the key point is the club has no "external debt". Still owing il £4m would be external debt wouldn't it? Well maybe not as its Ensco s debt now according to DE. As ensco are oufc holding company it's the same thing isn't it ?
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Post by uptheus on Aug 22, 2017 12:33:29 GMT
It appears that most of us are struggling to understand the situation after these comments, so can OxVox give their position on this in terms of whether they are happy or whether further clarification is required?
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Post by Marked Ox on Aug 22, 2017 12:48:00 GMT
Well maybe not as its Ensco s debt now according to DE. As ensco are oufc holding company it's the same thing isn't it ? Not legally no, they are separate entities.
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Post by m on Aug 22, 2017 13:07:10 GMT
It appears that most of us are struggling to understand the situation after these comments, so can OxVox give their position on this in terms of whether they are happy or whether further clarification is required? Agreed. I'd certainly appreciate a plain English statement of where the debt was and is now. Or best guess.
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Post by Mark on Aug 22, 2017 13:50:01 GMT
Ok 30 June 2014 OUFC owed WPL £7.5 million.
4 July 2014 Eales took over. We are told that he has paid approx £4 million to Lenagan acquiring his shares for £1 (by Ensco technically sending cash to OUFC, who then repaid part of the WPL loans) and in order for the club to no longer owe WPL anything, Lenagan sold the remaining debt of £4.4 million to Ensco for £1 (don't know where the missing £900K arises).
So OUFC owes Ensco the £4million that Eales paid to OUFC and technically the £4.4 million that was owed to WPL (and Lenagan).
Since then Eales says he has invested a total of £10.3 million. Which sound like the £4 million to Lenagan, funding losses of £4.3million and a further £2 million. The club's debt is presumably somewhere around £10.3million + £4.4million = £14.7million (perhaps take off 615K of investment by way of preference shares).
This debt is effectively the losses since Kassam took over, £2million lost under Kassam, £7million or so lost under WPL and another £5million under Eales.
The only point that seems to be worrying people is that Lenagan's loan is still owed to Ensco. However, this is only going to be paid if there is cash in the club (or from a purchaser to pay it). Eales couldn't put the club into liquidation and get repaid £14.7 million of loans because there aren't the assets.
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Post by oufcyellows on Aug 22, 2017 13:54:13 GMT
Going to cost someone a crap load of money to buy us then. A l1 club with as u say no assets, a poor stadium agreement and £14.7m worth of debt, plus what ever Darryl wants for the club.
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Post by Mark on Aug 22, 2017 14:03:49 GMT
Going to cost someone a crap load of money to buy us then. A l1 club with as u say no assets, a poor stadium agreement and £14.7m worth of debt, plus what ever Darryl wants for the club. Did it cost Eales £7.5 million to buy out Lenagan? No, he paid £4 million. Charlie's consortium from 2014 thought £1 million was more like it. Presumably because the club was losing £1million a year in L2, and actually you'd be doing Lenagan a favour by stopping him having to fund more losses. So just because the debt is in the accounts, doesn't mean a buyer is going to pay for past losses.
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Post by oufcyellows on Aug 22, 2017 14:26:11 GMT
Going to cost someone a crap load of money to buy us then. A l1 club with as u say no assets, a poor stadium agreement and £14.7m worth of debt, plus what ever Darryl wants for the club. Did it cost Eales £7.5 million to buy out Lenagan? No, he paid £4 million. Charlie's consortium from 2014 thought £1 million was more like it. Presumably because the club was losing £1million a year in L2, and actually you'd be doing Lenagan a favour by stopping him having to fund more losses. So just because the debt is in the accounts, doesn't mean a buyer is going to pay for past losses. Totally, I just get the impression, with all the talk of making the championship that Darryls ultimate objective is to sell at a profit (not unreasonable) the reality of that is it's going to cost someone a shit load
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Post by manorlounger on Aug 22, 2017 15:05:22 GMT
So, if the time comes and there is a potential buyer, DE will speak to Ensco 1070 (DE) and they will speak to Alcydion (DE) and agree a deal whereby Alcydion (DE) will not require repayment from Ensco 1070 (DE) and therefore OUFC (DE?) will be free of debt?
But, there's no profit in that arrangement, is there?
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Post by oufcyellows on Aug 22, 2017 15:07:50 GMT
So, if the time comes and there is a potential buyer, DE will speak to Ensco 1070 (DE) and they will speak to Alcydion (DE) and agree a deal whereby Alcydion (DE) will not require repayment from Ensco 1070 (DE) and therefore OUFC (DE?) will be free of debt? But, there's no profit in that arrangement, is there? 15 ish
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Post by manorlounger on Aug 22, 2017 15:23:20 GMT
So, if the time comes and there is a potential buyer, DE will speak to Ensco 1070 (DE) and they will speak to Alcydion (DE) and agree a deal whereby Alcydion (DE) will not require repayment from Ensco 1070 (DE) and therefore OUFC (DE?) will be free of debt? But, there's no profit in that arrangement, is there? 15 ish I'll start counting out my piggy bank right away!
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Post by Mark Sennett on Aug 24, 2017 11:21:29 GMT
Great to see that OxVox has kindly posted the reply to my question so thanks to them for that. Only just spotted it yesterday as I’ve been away. The reply does raise some interesting points. So, I’ll try and be concise having again chatted it over in conjunction with the published accounts with an accountant. Here are the facts: 1. Darryl buys the equity of the club for £4 million, IL writing off his debts in the process.
2. That deal with IL includes Darryl obtaining the option to buy £4 million of IL's debt for £1.
3. In the first season, Darryl injects £3.2 million of cash as debt
4. In the second season, Darryl injects another £3.2 million of cash as debt
5. This means that as of summer 2016 - two years after he has bought the club - the club owes Darryl circa £10.5 million (£4 million of IL’s debt plus cash injections of £6.5 million)
6. In turn, however, there have been running losses of circa £4.5 million.
7. Therefore, of the £6.5 million cash injected (as debt) there should at that point – summer 2016 - have been circa £2 million left. This is logical, as it meant that the club would have been fully funded for our first year in League 1 even if we exited both Cups early, made no transfer profit etc
8. We are being told that the next set of accounts are to show a profit last year of circa £500k. This meant that come the end of last season – May 2017 - the cash float in the club should have been circa £2.5 million. But the club's debt to DE would have stayed at £10.5 million.
9. Since then, there have been significant further net inflows - let us suggest circa £2.5 million, to be on the conservative side (for Appleton compensation, Lunny sale, Sercombe Sale, Roofe and O’Dowda payments, meaning that as of now our cash float should be circa £5 million, minus whatever the running costs have been during the summer – maybe £300k. Let us be conservative, again, and say £4.5 million left of the £6.6 million that DE injected over two years.
If Marvin goes as well, that would mean that Darryl has pretty much recovered the £6.5 million he originally invested after he became owner. Darryl then has a choice as to what to do. He can leave it in the club and use it as a war chest, paying for the next two seasons and enabling Pep to spend decent money on top players or he can extract it from the club, claiming it as a “debt re-payment” and thus tax free. Of course, what he actually does will tell us an awful lot about his ambition for the club and his own financial position. After all, he would only have to spend a relatively small amount of the £5 million war chest to give Pep a great shot of a top 4 finish, given the current strength of the squad. As even from the notes from the recent fans forum I’m not entirely sure what the long term plan is and why there’s no longer such urgency on getting a stadium solution sorted when only a few months ago it was said to be essential for oxvox to agree heads of terms on the Kassam Stadium as the club was not financially viable.
If, on the other hand, he doesn’t spend much if anything on transfers and keeps the wage budget more or less the same – at around £3 million – then that will budget a “loss of £1 million/£1.5 million” assuming no Cup runs. That would then enable him to extract circa £4 million in “debt re-payments”. If Marvin went then he could perhaps extract even more. If this is the case then perhaps this is why he pulled out of the Sartori deal at the last minute. Portsmouth has just gone for about £5.5 million, club and stadium freehold. Let us imagine that Satori was paying less for us (OUFC being a smaller club with no stadium); let us put it at, say, £4 or £5 million. DE might, quite understandably, have looked at that and thought “I can get that out of the club just by selling players” and then sell the club for whatever he can get for it after that. Going back to the original response, Darryl claims to OxVox that his current financial exposure to OUFC is £10.5 million. That is a play on words and can make some people think he’s written several cheques that total that amount!! The DEBT is technically £10.5 million, but that includes the price he paid IL for an asset AND a large chunk of money that was ear-marked for OUFC but has never been used.
Taking into consideration payments received this season and the profit last season the actual exposure is he bought the club for £4 million and has spent, net, around a further £2 million. So, the financial situation should be £4 million equity and £2 million debt. It is for this reason I’m not comfortable with the £10.5 million debt level in the club and am keen to hear others (including OxVox’s) take on that.
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Post by foley on Aug 24, 2017 12:24:33 GMT
Great to see that OxVox has kindly posted the reply to my question so thanks to them for that. Only just spotted it yesterday as I’ve been away. The reply does raise some interesting points. So, I’ll try and be concise having again chatted it over in conjunction with the published accounts with an accountant. Here are the facts: 1. Darryl buys the equity of the club for £4 million, IL writing off his debts in the process. 2. That deal with IL includes Darryl obtaining the option to buy £4 million of IL's debt for £1. 3. In the first season, Darryl injects £3.2 million of cash as debt 4. In the second season, Darryl injects another £3.2 million of cash as debt 5. This means that as of summer 2016 - two years after he has bought the club - the club owes Darryl circa £10.5 million (£4 million of IL’s debt plus cash injections of £6.5 million) 6. In turn, however, there have been running losses of circa £4.5 million. 7. Therefore, of the £6.5 million cash injected (as debt) there should at that point – summer 2016 - have been circa £2 million left. This is logical, as it meant that the club would have been fully funded for our first year in League 1 even if we exited both Cups early, made no transfer profit etc 8. We are being told that the next set of accounts are to show a profit last year of circa £500k. This meant that come the end of last season – May 2017 - the cash float in the club should have been circa £2.5 million. But the club's debt to DE would have stayed at £10.5 million. 9. Since then, there have been significant further net inflows - let us suggest circa £2.5 million, to be on the conservative side (for Appleton compensation, Lunny sale, Sercombe Sale, Roofe and O’Dowda payments, meaning that as of now our cash float should be circa £5 million, minus whatever the running costs have been during the summer – maybe £300k. Let us be conservative, again, and say £4.5 million left of the £6.6 million that DE injected over two years. If Marvin goes as well, that would mean that Darryl has pretty much recovered the £6.5 million he originally invested after he became owner. Darryl then has a choice as to what to do. He can leave it in the club and use it as a war chest, paying for the next two seasons and enabling Pep to spend decent money on top players or he can extract it from the club, claiming it as a “debt re-payment” and thus tax free. Of course, what he actually does will tell us an awful lot about his ambition for the club and his own financial position. After all, he would only have to spend a relatively small amount of the £5 million war chest to give Pep a great shot of a top 4 finish, given the current strength of the squad. As even from the notes from the recent fans forum I’m not entirely sure what the long term plan is and why there’s no longer such urgency on getting a stadium solution sorted when only a few months ago it was said to be essential for oxvox to agree heads of terms on the Kassam Stadium as the club was not financially viable. If, on the other hand, he doesn’t spend much if anything on transfers and keeps the wage budget more or less the same – at around £3 million – then that will budget a “loss of £1 million/£1.5 million” assuming no Cup runs. That would then enable him to extract circa £4 million in “debt re-payments”. If Marvin went then he could perhaps extract even more. If this is the case then perhaps this is why he pulled out of the Sartori deal at the last minute. Portsmouth has just gone for about £5.5 million, club and stadium freehold. Let us imagine that Satori was paying less for us (OUFC being a smaller club with no stadium); let us put it at, say, £4 or £5 million. DE might, quite understandably, have looked at that and thought “I can get that out of the club just by selling players” and then sell the club for whatever he can get for it after that. Going back to the original response, Darryl claims to OxVox that his current financial exposure to OUFC is £10.5 million. That is a play on words and can make some people think he’s written several cheques that total that amount!! The DEBT is technically £10.5 million, but that includes the price he paid IL for an asset AND a large chunk of money that was ear-marked for OUFC but has never been used. Taking into consideration payments received this season and the profit last season the actual exposure is he bought the club for £4 million and has spent, net, around a further £2 million. So, the financial situation should be £4 million equity and £2 million debt. It is for this reason I’m not comfortable with the £10.5 million debt level in the club and am keen to hear others (including OxVox’s) take on that. Good summary Mark. I would be extremely surprised if DE just took out the cash. As you quite rightly state it wouldn't take an awful lot of additional cash to give Pep a good chance of reaching the Top 4 (plus spending the money on the right players has paid back significantly in the past 2 years). DE's stated aim was always to get to the Championship. If that were to happen then the club would presumably be worth a lot more than it is now and DE would in all likelihood sell at that time. So the sale of players/ Cup runs etc has allowed DE to be able to give the manager a good chance of achieving his stated aim without being anywhere near as out of pocket as could easily have happened.
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Post by Mark Sennett on Aug 26, 2017 9:13:35 GMT
Thanks Foley. Still keen to hear OxVox's view on the debt situation. We've covered the facts above and now to address a rumour that may well make the facts make more sense. I've learned from people inside football that the club is still being touted round for sale. I think most of you have seen from my past posts that I don't post baseless rumours. I trust my sources on this 100%. Point is there's nothing wrong with the club being for sale it's Darryl's right to sell or explore selling!
Nobody could anyone question Darryl is he came out and said his plan for OUFC is to make it sustainable by selling players to reduce debt and living within our means. If he's trying to make us a sustainable L1 club then i'm all for it!
But that is not what we are seeing here in my opinion. We were told at the end of the season that ticket prices need to go up to give us a top 6 budget. Since then we've seen a lot of money come into the club as detailed above. But there has been no evidence of heavy investment in playing side we've sold players, let players go, and loaned out players. Now it's entirely possible that we may make a big signing(s) before the window shuts and thus see that money reinvested. But that's not what Pep said yesterday (but he could of course be being coy). There's also still the chance that Marvin departs before next weekend. So at this point it's hard to believe we have a top 6 budget as was mooted.
My concern from Darryl's reply to my question is the wording. He stated that "my cash investment (including the £4m paid to Ian) is £10.38m". This makes it look like Darryl has written out cheques to that tune of £10.38m and that's simply not the case. As i said above the should be £4 million equity and £2 million debt.
If we were trying to become a debt free club and couldn't necessarily have a top 6 budget in this league then fine but don't make soundbites that we are going for it and have a big war chest for squad building, unless you intend to actually use it (which of course we may). But it seems we are selling assets, still talking about selling the club and we have an uncomfortable level of debt. So i'm keen to learn if the debt level will now decrease and see if others share my unease about why the debt is at the level it's at. In my opinion it can't be in the club's interest to have ported £4million of debt WPL wrote off. If someone can explain to me why it is in the club's interests then I'd be keen to hear your point of view.
If the club is indeed being touted to be sold then it's hard to argue that Darryl is currently extracting as much value from the playing squad as possible before completing a sale. I personally would have no problem if the club is selling players to reduce debt and become sustainable even if it means we don't have a top 6 budget in this league. But what i'm not comfortable with is public comments saying we are going for it financially (and we increase ticket prices to aid this) when the current signs do not point to this.
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Post by Junior on Aug 26, 2017 9:15:26 GMT
You really dislike Eales, don't you
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Post by manorlounger on Aug 26, 2017 9:32:40 GMT
Whether one likes or dislikes the chairman is not relevant, it is whether or not one believes that what he has stated publicly is factual.
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Post by uptheus on Aug 26, 2017 9:37:28 GMT
You really dislike Eales, don't you Junior, Whether Mark likes or dislikes Darryl I think he raises pertinent questions which need to be answered. We were bitten very hard before and I wouldn't want it to happen again, would you? Sheep's clothing and all that.
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Post by Paul Cannell on Aug 26, 2017 9:47:50 GMT
In my opinion it can't be in the club's interest to have ported £4million of debt WPL wrote off. If someone can explain to me why it is in the club's interests then I'd be keen to hear your point of view. You wouldn't have a source for the claim in bold?
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Post by Denissmithswig on Aug 26, 2017 9:49:56 GMT
You really dislike Eales, don't you Junior, Whether Mark likes or dislikes Darryl I think he raises pertinent questions which need to be answered. We were bitten very hard before and I wouldn't want it to happen again, would you? Sheep's clothing and all that. Does Mark raise pertinent questions though?
It seems that people will find ways to move around Eales answers to keep a debate going.
The playing budget has gone up from last season. Players like Payne, Williamson and Henry wont be on low wages. Through in a loan fee for Payne which I could imagine being sizeable.
Nobody knows what sort of wages the foreign lads will be on but again I'd imagine with wages plus relocation fees it would still be a fair amount of money.
Fans are questioning the lack of investment since it was mentioned we were done with regards to bringing players in during this transfer window. This came from Pep not the owner so could it not be the fact that Pep is actually happy with the squad we have and wants to work with what he has rather than bring anybody else in.
As for this constant thing about the club being up for sale. Everyone has their price and if someone came in with an offer that benefitted Eales then I am sure he would sale. In the meantime our model of bringing players in and selling on for a profit is working while there is still progression on the pitch.
Eales has said that extra investment is welcome and would listen to people who wanted to invest into the football club.
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Post by Paul Cannell on Aug 26, 2017 9:52:38 GMT
You really dislike Eales, don't you Junior, Whether Mark likes or dislikes Darryl I think he raises pertinent questions which need to be answered. We were bitten very hard before and I wouldn't want it to happen again, would you? Sheep's clothing and all that. Are you really only on this forum to be Sennett & Methven's rapid rebuttal boy?
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Post by Mark Sennett on Aug 26, 2017 9:57:24 GMT
Paul what's your view on the accounts. Don't worry unlike Mr Methven I won't insult you! Source of our debt and income/expenditure is the last set of published accounts, which I broke down with input from an accountant above. As i've said i'm all for a player trading model but we currently sit with over £12m of debt in the last set of accounts and i'm simply questioning if the huge revenues we've had in this summer are to be used to pay back some of this debt and also debating why the debt is the level it is at. I'm keen to hear your view even if you don't share my concerns.
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Post by Paul Cannell on Aug 26, 2017 10:21:06 GMT
I share your concerns, but I'm not an accountant and I'm wondering how you know that Lenegan walked away without receiving any of his £4m paid back. Do the accounts actually state that?
What's Methven got to do with this. btw?
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Post by oufcyellows on Aug 26, 2017 10:21:45 GMT
I share your concerns, but I'm not an accountant and I'm wondering how you know that Lenegan walked away without receiving any of his £4m paid back. Do the accounts actually state that? What's Methven got to do with this. btw? Isn't that what Darryl answered in the oxvox answers ?
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Post by Paul Cannell on Aug 26, 2017 10:22:34 GMT
I don't know. Hence the f*cking question.
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Post by ryaniobirdio on Aug 26, 2017 10:26:20 GMT
Look, I'm getting f**king sick of this now.
Are we, or aren't we, getting any more free sausages?
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Post by manorlounger on Aug 26, 2017 10:30:19 GMT
Look, I'm getting f**king sick of this now. Are we, or aren't we, getting any more free sausages? Depends on your definition of "free".
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Post by Mark Sennett on Aug 26, 2017 10:31:05 GMT
Indeed Darryl does confirm the loans point and all financial details are listed in the accounts. I only mentioned Charlie as you lumped us together it was a joke! I'm glad you share my concerns at least i'm not alone then!!
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Post by oufcyellows on Aug 26, 2017 10:34:39 GMT
I don't know. Hence the f*cking question. I don't know either, hence mine 😉
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Post by uptheus on Aug 26, 2017 10:41:21 GMT
Junior, Whether Mark likes or dislikes Darryl I think he raises pertinent questions which need to be answered. We were bitten very hard before and I wouldn't want it to happen again, would you? Sheep's clothing and all that. Are you really only on this forum to be Sennett & Methven's rapid rebuttal boy? And here was me thinking that you were better than that, but then again I remember you being a fan of Kassam, so I guess not.
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