RFC Have some money!

[pwb]

According to GR and J LO the new owners have just loaned the club another £60 million
http://www.getreading.co.uk/sport/footb ... d-13139353

[genome]

Prolly just debt consolid8ing

[pwb]

From the company house records, the £10 mil that was loaned back in January has now been payed back, so there is only £50 mil available, which i believe it's for the Club to spend and not for consolidating.
By spending, i mean on Infrastructure etc... and maybe 1/2 mil or so, on a couple of players!

[Nameless]

So we are now technically about £120 million in debt ?
Not that it is real debt, and hopefully there are no interest payments.
Clearly it will never be repaid by the club.
Not sure why they have lent us money to pay back the money they had previously loaned us. That seems pointless, presumably some accounting issue ?
Would be interesting to know what the thinking is. Is this sum for predetermined purposes ? Training ground ? New pitch ? Infrastructure ? Covering running cost deficit for a fixed period ? Transfers and wages ?
Is it a one off or will they lend us more each year ?

[3points]

Prolly just debt consolid8ing

^^
This. No way is it additional. It will be how the Thais got some or all of their money back upon sale of the club

[Winston Biscuit]

on the subject of money, we apparently have received the most money in parachute payments of any football league club - £97.8M

[muirinho]

on the subject of money, we apparently have received the most money in parachute payments of any football league club - £97.8M

Makes sense given how long it took us to get repromoted the first time, and the fact we were in the Championship for the full duration of parachute payments this time round. Won't be like that for long as parachute payments are bigger now, so the teams who came down season before last won't be long in overtaking us

[winchester_royal]

So we are now technically about £120 million in debt ?

Not quite.

Granted we have £60m more debt, but for the moment we also have £60m more in cash (i.e. assets) and therefore the net debt figure is not impacted.

[Gunny Fishcake]

We'd have had a lot lot more if those two penalties had gone in

[Nameless]

We'd have had a lot lot more if those two penalties had gone in

You mean players and agents would have had a lot more....

[TFF]

So we are now technically about £120 million in debt ?

Not quite.

Granted we have £60m more debt, but for the moment we also have £60m more in cash (i.e. assets) and therefore the net debt figure is not impacted.

I would assume that the club use this £60M to pay off the existing debt. The Chinese won't want any more money they pump in to the club to be paying off interest to a third party rather than to the benefit of their investment.

[winchester_royal]

So we are now technically about £120 million in debt ?

Not quite.

Granted we have £60m more debt, but for the moment we also have £60m more in cash (i.e. assets) and therefore the net debt figure is not impacted.

I would assume that the club use this £60M to pay off the existing debt. The Chinese won't want any more money they pump in to the club to be paying off interest to a third party rather than to the benefit of their investment.

Yep I'm sure that's where the majority of the cash will be going, which again will have the same nil net impact on the club's debt.

I'm sure the debt will be cheaper to hold now as well which is nice.

[Nameless]

So the Chinese are lending the club money to,pay back the debt which is owed to the Chinese ?

Not sure that makes much sense.

Surely the vast majority of our debt is the money built up over the years as a result of SJM and then the Thai's lending money to fill the annual 'black hole'. As the club is sold the new owner repays the debt to the previous owner and takes on the debt themselves. AFAIK we don't owe significant amounts to 3rd parties.

[Hound]

So the Chinese are lending the club money to,pay back the debt which is owed to the Chinese ?

Not sure that makes much sense.

Surely the vast majority of our debt is the money built up over the years as a result of SJM and then the Thai's lending money to fill the annual 'black hole'. As the club is sold the new owner repays the debt to the previous owner and takes on the debt themselves. AFAIK we don't owe significant amounts to 3rd parties.

Could the new loan be on reduced terms - i.e. interest rate/payback period.

Its all accounting tricks anyway isn't it really? Pretty meaningless in real terms

[Nameless]

Why would they give a new loan rather than just change the terms of the existing one ?
It isn't 'accounting tricks' if they have put £60 million in the RFC account, or at least put a credit facility in place.
I would guess they have spent the last 6 months looking at what needs doing at the club in the next couple of years and this is the money pay for it. On the shopping list would be
- the training ground
- new pitch
- ground refurb
- transfers
- operating deficit
There will be a business plan backing it up and the end point will be promotion, at which point the numbers change.
No sensible person would just dump a load of cash into the club without a clear idea of how it would be spent, and as I said I don't think using your own money to repay a loan owed to yourself by yourself makes much sense unless.

[winchester_royal]

It wasn't all owed to the Chinese though, it was mostly owed to the Thais who no doubt wanted a significant chunk of that being paid off as part of the takeover deal