Thames Sports Investment

[Royal Rother]

I was equally as surprised to hear that, but it might explain why the 100% sale of the club is only £25m. That is an absolute snip, more so now we're in the Premier League.

Hang on a sec - that doesn't make sense does it...? What you said above wouldn't explain it, it would contradict it.

Rather than getting the club for £25m, it effectively would mean they are getting it for nothing.

SJM's loans were used to build the club so that it has the ground, facilities, infrastructure, team etc. etc. we see today. (Ignore the recent TSI funding that helped us into the PL as that's irrelevant in this context). If SJM only gets £25m for his shares and nothing back on the loans then he'll come out of the whole 20 years effectively level. £25m in, £25m out.

But in fact a certain amount (guessing at £10m) of loans were converted to shares a few years ago, which would mean on this deal he'll be coming out a loser financially despite having never taken a salary and very minimal interest on his loans!!!

No. That can't be right.

That's just my take on it.

Going by what appears a reliable source, the cost per % as mentioned earlier is bang on. He is also adamant that the total cost of £25m does not include the debt and SJM. He will absorb that himself.

What exactly TSI are then buying I don't know. I assume everything we heard in the first press conference.

Well yes, but that sounds a bit confusing again with respect... who "will absorb that himself"?

The £25m does not include the debt because it is just what is being paid for the shares - so it wouldn't / couldn't include the debt. This is not a debt-restructuring job so TSI would effectively take over any assets and any debts that exist on the Balance Sheet as at the date of completion. I suspect that, apart from SJM's loans those assets and liabilities are simply created through normal trading accounts and periodic payments.

I suppose it is POSSIBLE that he has agreed not to get repaid for those loans and effectively just write them off but that seems so unlikely as to be near as dammit unthinkable.

[Pseud O'Nym]

I suppose it is POSSIBLE that he has agreed not to get repaid for those loans and effectively just write them off but that seems so unlikely as to be near as dammit unthinkable.

Wouldn't he then be better off taking a penny for his shares but having his loans repaid, or is that not legal?

[Ian Royal]

I had the same reaction to this as Rother.
The numbers don't make sense.
Thinking laterally, is it possible that a deal is being brokered to minimise Tax liability?
Just speculating

If it is, Ian Royal will be spitting feathers!

I shall be disappointed and unsurprised that the system is manipulated once again. But as far as I'm concerned personally SJM still has a rather large credit in my bank, despite his tax dodging. I expect it from him, he is a Tory afterall. And of course this is all still speculation at this stage.

[Royal Rother]

I suppose it is POSSIBLE that he has agreed not to get repaid for those loans and effectively just write them off but that seems so unlikely as to be near as dammit unthinkable.

Wouldn't he then be better off taking a penny for his shares but having his loans repaid, or is that not legal?

Well, indeed... Not my field at all but I should imagine if SJM were to be writing off his loans then some form of offset against the profit on the shares would be applied.

But as I say, it is highly unlikely that is happening anyway.

[under the tin]

Been thinking..I'm just flying a kite here.

Just for the sake of arguement, SJM wants £50M for the lot.
He's worked out that in loans, and other stuff he's put in over the years that the club owes him £25M.
So, by separating the loans out from the shares he halves his tax liability on the £50M sale price, because, surely, the only tax implication for Sir John on these loans is on the interest he has been charging the club.

TSI buy the shares for £25M, assume responsibility for said debt, and it might have been a condition of the deal that they write it off.
I await derision from the accountants who post here, but it seems to me that it could be a smart way of saving tax.

[Royal Rother]

No derision but the fact is that the loans ARE separate from the shares.

If he's owed £25m by the club then that £25m does not go away just because someone else is buying the shares.

In a viable business (which it is of course) he would get the loans repaid and a valuation on his shares.

[Platypuss]

Not saying you're wrong but I find that hard to believe.

I was equally as surprised to hear that, but it might explain why the 100% sale of the club is only £25m. That is an absolute snip, more so now we're in the Premier League.

Hang on a sec - that doesn't make sense does it...? What you said above wouldn't explain it, it would contradict it.

Rather than getting the club for £25m, it effectively would mean they are getting it for nothing.

SJM's loans were used to build the club so that it has the ground, facilities, infrastructure, team etc. etc. we see today. (Ignore the recent TSI funding that helped us into the PL as that's irrelevant in this context). If SJM only gets £25m for his shares and nothing back on the loans then he'll come out of the whole 20 years effectively level. £25m in, £25m out.

But in fact a certain amount (guessing at £10m) of loans were converted to shares a few years ago, which would mean on this deal he'll be coming out a loser financially despite having never taken a salary and very minimal interest on his loans!!!

No. That can't be right.

Perhaps the sale doesn't include the hotel and other assets such as the training ground?

[Northern Git]

Perhaps the sale doesn't include the hotel and other assets such as the training ground?

As I understand it does NOT include the hotel, but DOES include the training ground.However the training ground was not owned by Reading FC Ltd or the holding company Reading FC PLC, but by another of JMs comapnies and was rented to RFC, so the deal for that is/has been done seperately with TSI

[Pseud O'Nym]

Perhaps the sale doesn't include the hotel and other assets such as the training ground?

As I understand it does NOT include the hotel, but DOES include the training ground.However the training ground was not owned by Reading FC Ltd or the holding company Reading FC PLC, but by another of JMs comapnies and was rented to RFC, so the deal for that is/has been done seperately with TSI

Is it possible then that what is happening is that TSI are buying the club from the holding company, leaving the PLC owning the hotel and owing SJM the loans?

[EPR]

If it doesn't pull off do we have to give Jason Roberts back?

[Franchise FC]

If it doesn't pull off do we have to give Jason Roberts back?

He's suspended anyway

[Man Friday]

F**k knows what's going on (and I doubt we'll ever find out, company accounts or not) but one thing's for sure, SJM will want his "loans" (every other owner's investments) repaid, that's for sure.

[SpaceCruiser]

Isn't the £25 million for the 51% of the shares? So effectively, Madejski will still own 49% of RFC....and therefore still has money invested into the club.

Then again, I might be wrong!

[Friday's Legacy]

Isn't the £25 million for the 51% of the shares? So effectively, Madejski will still own 49% of RFC....and therefore still has money invested into the club.

Then again, I might be wrong!

£12.7m for 51% and then £12.3m for the rest by 30th sept 2013.

[ZacNaloen]

If they want it or is that cast iron?

[No Hoops]

Isn't the £25 million for the 51% of the shares? So effectively, Madejski will still own 49% of RFC....and therefore still has money invested into the club.

Then again, I might be wrong!

£12.7m for 51% and then £12.3m for the rest by 30th sept 2013.

Just watched the press conf from Jan and CS says its not £40m it's £25m but it sounds like he is referring to the 51% not total.

[Friday's Legacy]

Isn't the £25 million for the 51% of the shares? So effectively, Madejski will still own 49% of RFC....and therefore still has money invested into the club.

Then again, I might be wrong!

£12.7m for 51% and then £12.3m for the rest by 30th sept 2013.

Just watched the press conf from Jan and CS says its not £40m it's £25m but it sounds like he is referring to the 51% not total.

Chris Samuelson has told the Daily Mail different it seems. (I thought it was as you say).

"TSI plan to buy 51 per cent of Reading imminently for £12.7m, and will be obliged to buy the other 49 per cent for a further £12.3m by September 30, 2013."

[semtex1871]

An important difference remains that the Premier League applies the test before a takeover is approved whereas the Football League garners information only after a deal has gone through.

could this be why they wanted to take over a championship side so things effectively went through more seemlessly without too much delving??

AZ must have been pee'd off that we went up this season and that he is now facing much more scrutiny of his financial position....

#justsaying.........

[Friday's Legacy]

An important difference remains that the Premier League applies the test before a takeover is approved whereas the Football League garners information only after a deal has gone through.

Is that correct? Don't forget the deal with TSI is only verbal at this stage.

[SpaceCruiser]

Isn't the £25 million for the 51% of the shares? So effectively, Madejski will still own 49% of RFC....and therefore still has money invested into the club.

Then again, I might be wrong!

£12.7m for 51% and then £12.3m for the rest by 30th sept 2013.

Just watched the press conf from Jan and CS says its not £40m it's £25m but it sounds like he is referring to the 51% not total.

Chris Samuelson has told the Daily Mail different it seems. (I thought it was as you say).

"TSI plan to buy 51 per cent of Reading imminently for £12.7m, and will be obliged to buy the other 49 per cent for a further £12.3m by September 30, 2013."

Hang on a minute, isn't John Madejski still going to be the chairman for another 2 seasons?