Watford FC parent company Watford Leisure Plc release statement to stock exchange regarding club's financial future (From Watford Observer)
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Watford FC parent company Watford Leisure Plc release statement to stock exchange regarding club's financial future
12:57pm Wednesday 23rd December 2009 in
Watford Leisure announces that on 21 December 2009 Fordwat Limited (“Fordwat”) paid approximately £4.93 million to Valley Grown Salads (“VGS”) in full and final settlement of VGS’ demand of 15 December 2009 for full repayment of approximately £4.88 million in loans previously made available to the Company. The sum of £4.93 million paid by Fordwat included accrued interest and a contribution to the legal fees of VGS (in accordance with its right to demand such a contribution and interest under the loan agreement between VGS and the Company).
In connection with the above payment, on 21 December 2009 Watford Leisure signed an agreement with Fordwat for a loan to the Company of approximately £4.93 million (the“Fordwat Loan”), repayable on demand and accruing interest at the rate of 4.5 per cent above the base rate of Barclays Bank plc (except in default when the rate rises to base rate plus 7.5%). Furthermore, it is the understanding of both Watford Leisure and Fordwat that security over the Vicarage Road Stadium for the Fordwat Loan, replacing that of VGS, will be put in place in due course. The purpose of the Fordwat Loan was to prevent the Company being placed in administration by VGS.
As Fordwat holds approximately 37.16 per cent. of the issued share capital in Watford Leisure it is considered to be a “Related Party” under the AIM Rules for Companies. Accordingly the directors of the Company consider, having consulted with Strand Hanson Limited, that the terms of the Fordwat Loan are fair and reasonable insofar as the Company’s shareholders are concerned.
The board of Watford Leisure (“Board”) estimates that the Company now requires £4.7 million to cover its projected cash flow requirements for the period to 30 June 2010. As previously announced the Board supports a proposal from Fordwat to underwrite a £7.5 million rights issue of a debt instrument with either warrants or conversion rights, offered to all shareholders (“Rights Issue”). This proposal will take time to refine and put in place. As such the Board has determined to utilise all available funds currently held by the Company to cover the Company’s working capital requirements until the end of January 2010. This includes the funds received from ticket sales from the “Playing for Players” concert to be held in June 2010 but with the expectation that these funds will be restored on completion of the Rights Issue. At the end of January further short term funding will be needed to cover working capital requirements until the Rights Issue can be finalised.
Trading in Watford Leisure’s shares resumes on AIM with immediate effect. Further announcements will be made in due course.
Comments(20)
N Joydegame
says...
1:25pm Wed 23 Dec 09
Terms of loan - Repayable on demand; at 4.5% over base rate; and charged against the stadium. Gotcha.
We're now wholly in the hands of Cashcroft, but still a need for short term cashflow funding.
Question. Why is a non-football investor doing this?
Answer - No one knows?
I'm a shareholder so when are the board to make a full explanatory statement of this whole deal, and why this was preferable to the Russo's offer?
WE8BR
says...
1:31pm Wed 23 Dec 09
jasonwatford
says...
1:53pm Wed 23 Dec 09
Andrew1963
says...
2:15pm Wed 23 Dec 09
Sir Les Taylor
says...
2:20pm Wed 23 Dec 09
Holly68
says...
2:24pm Wed 23 Dec 09
plus using Elton's concert money to see them through January ... I don't remember the Russo's suggesting to use that money
the £7.5m rights deal will take a while to work out ...... how long a piece of string !!!
Ashcroft never watched a Watford match .....
This all sounds a step backwards
Steve, Abbots Langley
says...
2:24pm Wed 23 Dec 09
Perhaps we'll be renamed Belize Wanderers?
herts hornet
says...
2:39pm Wed 23 Dec 09
GRAHAM TAYLOR statement needed and NOW are you to be chairman full time and do you back these arrangements ,now totally in the hands of Ashcroft that lifelong watford supporter !! god helps us ,oh sorry some of you think he is already hope you are right !!
chrisptrifle
says...
2:55pm Wed 23 Dec 09
Holly68
says...
3:07pm Wed 23 Dec 09
No we in worse position. Paying more interest on loan, plus payable back 'on demand' !
Plus now using SEJ concert money as a bridging loan !
I thought the concert was called 'playing for players', will it be renamed ? Any suggestions ....
So after the rights issue, we will still owe Ashcroft £4.93m, plus concert £1m, plus plus plus ??? !!!
I think some people thought Ashcroft was putting his hand in his pocket !? WRONG !!!!!!!!!!!!!
worthing_hornet
says...
3:09pm Wed 23 Dec 09
Mick, Bray
says...
3:36pm Wed 23 Dec 09
We are now actually in a poorer position with regards Loan interest payments!
Thank god you don't run WFC!!!!!!!!!!!!
Clap Clap.
Elton Bog
says...
3:57pm Wed 23 Dec 09
Holly, Sir Les, Herts Hornet - what is so difficult to understand about this:
Ashcroft has taken on Russo's loan ON THE SAME TERMS to stop Jimmy putting us into admin.
Ashcroft's company has proposed a £7.5m rights issue and is underwriting it so WATFORD FC WILL BE £7,500,000 BETTER OFF.
This rights issue money will not be available until the end iof January because the legal and accounting due dilligence takes time. In the meantime ASHCROFT WILL PROVIDE FUNDING NEEDED. As for the concert money, I'm sure you can agree that it would be daft to short term loan £3m with interest on it when there is £1.5m sitting in the bank; short term loan £1.5m, use the concert money, and pay it all back out of the rights issue money. At the end of the day however, and however it is used, the club will be £7.5m better off after the rights issue. What was the Russo's big plan?
MrMfatic
says...
4:26pm Wed 23 Dec 09
Elton Bog wrote:Agreed.
Why are we in a worse position? Holly, Sir Les, Herts Hornet - what is so difficult to understand about this: Ashcroft has taken on Russo's loan ON THE SAME TERMS to stop Jimmy putting us into admin. Ashcroft's company has proposed a £7.5m rights issue and is underwriting it so WATFORD FC WILL BE £7,500,000 BETTER OFF. This rights issue money will not be available until the end iof January because the legal and accounting due dilligence takes time. In the meantime ASHCROFT WILL PROVIDE FUNDING NEEDED. As for the concert money, I'm sure you can agree that it would be daft to short term loan £3m with interest on it when there is £1.5m sitting in the bank; short term loan £1.5m, use the concert money, and pay it all back out of the rights issue money. At the end of the day however, and however it is used, the club will be £7.5m better off after the rights issue. What was the Russo's big plan?
As I understand the 7.5 Million will be on top of the fact that Ashcroft has in effect purchased the stadium from the Russo's.
This in effect gives a surplus of 2.5 million after the 5 million of commitments that have been commented on over the last few months.
Perhaps with alleged sale of Loach and the 2.5 Million as well the stadium will be finished with the surplus who knows.
But could be that as soon as the 7.5 Million is raised that Fordwat will demand the return of the 4.9 paid to the Russo's (Hence on demand) The Ground will then return to Watford Leisure and not be held by Fordwat.
Will have to wait and see. Could be a number of different scenarios
Billie
says...
6:18pm Wed 23 Dec 09
herts hornet
says...
6:41pm Wed 23 Dec 09
Elton Bog
says...
6:56pm Wed 23 Dec 09
luther blissett
says...
8:04pm Wed 23 Dec 09
Holly68 wrote:Holl, I know that you know Russo but don't start making up lies to make them look better. The interest rate on the loan is exactly the same as what the Russo's were charging.
Chrisptrifle :
No we in worse position. Paying more interest on loan, plus payable back 'on demand' !
Plus now using SEJ concert money as a bridging loan !
I thought the concert was called 'playing for players', will it be renamed ? Any suggestions ....
So after the rights issue, we will still owe Ashcroft £4.93m, plus concert £1m, plus plus plus ??? !!!
I think some people thought Ashcroft was putting his hand in his pocket !? WRONG !!!!!!!!!!!!!
They must have also had a "payback on demand" clause because they demanded it be paid back.
pfwhornets
says...
10:40pm Wed 23 Dec 09
The Russo's alegedly driving the share price down so that they could offer 2.5 times the value to LA and GS to own the club outright. The R's have no more money and that was the only chance they would get to grab the club. There would have been no investment thereafter, believe me.
There is a world financial depression at the moment and there will not be a queue of investors to buy up all the shares especially if the largest holder doesn't want to sell.
Try borrowing from the bank at the moment; virtually impossible especially the amount we need. So forget that. Give me an alternative folks.
The only way out is to sell the one or two decent players we have, probably Loach and Hodson, try our best to shift the high earners (there is hope, NE has gone) and run the club as a tight ship until the contracts of the high earners have finished in June 2011. I would make the priority of getting the 4.93 mio back to LA just in case.
This is the best we'll do at the moment so let's get over it and concentrate on the Forrest game this Sat.
WFC 2 Forrest 1
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WE8BR says...
1:25pm Wed 23 Dec 09