[Archived] New Mortgage

[Kamy100]

Got access to documents last night which confirm that Venky's took out a new mortgage on 25th August 2011 with Barclays. In order to get this mortgage they gave ALL income for the foreseeable future as guarantee. This now explains the spending at the end of the transfer window. The big problem is that if Rovers are relegated then that income will not be as high as being in the Premier League so I presume Barclays would call in the mortgage. Also possibly explains why they are not sacking Kean as that would cost money.

It does appear on the face of things that Venky's are not putting in their own money and are instead using credit to finance spending.

Document is with the likes of Philip so hopefully they can give more informed analysis soon.

[patrickvalery]

As if the football wasn't bad enough.......

[SouthAussieRover]

I feel like I'm stuck in a never ending nightmare.

[dave birch]

Kamy, can you give any more info?

All income seems a bit strange, just what do the rovers do with day to day stuff, such as wages/

[Mattyblue]

IThree things:

Venkys do not make the profit to fund a PL club, we have had a negative net spend and they've took out loans on the club.

It really is survival or bust.

[den]

How much did they borrow Kamy?

[jodrell]

please sell up and get out of our club.

[Lurid Coat]

We actually are gonna go bankrupt, aren't we?

Possibly the most disturbing and downright frightening piece of news posted on this site post-takeover.

Glen, time to get those investors on the phone

[dave birch]

I would hazard a guess that this for a facility that allows them to go into overdraft and back from time to time.

That Venky's would make sure that all the income went through this facility.

Got no problems with something like that. Using debt to fund something is not that unusual.

[Stuart]

I would hazard a guess that this for a facility that allows them to go into overdraft and back from time to time.

That Venky's would make sure that all the income went through this facility.

Got no problems with something like that. Using debt to fund something is not that unusual.

Aaaaaaaaaaaaaaaarrrrrrrrrgggggggggghhhhh!!!!!!!!!!

Is there anything that has happened in the last 12 months that makes you honestly believe Venkys have put their own cash into Rovers?

IThree things:

Venkys do not make the profit to fund a PL club, we have had a negative net spend and they've took out loans on the club.

It really is survival or bust.

Just when you thought things couldn't get any worse!

[dave birch]

Aaaaaaaaaaaaaaaarrrrrrrrrgggggggggghhhhh!!!!!!!!!!

Is there anything that has happened in the last 12 months that makes you honestly believe Venkys have put their own cash into Rovers?

Just when you thought things couldn't get any worse!

I use debt to fund things, long term debt as well, do you?

It is not unusual.

There may be things that make this unusual, but AT THE MOMENT, we don't know, do we?

[Stuart]

Question for Philip, once he's got his head around the accounts.

Is there any scenario which means Venkys could make money out of the club in the event of relegation?

[dave birch]

Question for Philip, once he's got his head around the accounts.

Is there any scenario which means Venkys could make money out of the club in the event of relegation?

In a word:

Yes.

Club gets relegated:

Sell players = money in

Parachute payments = money in

Trousering money in = money to Venkys.

Far more than they paid initially.

[BangkokRover]

Question for Philip, once he's got his head around the accounts.

Is there any scenario which means Venkys could make money out of the club in the event of relegation?

No

Of course not, if the income goes down how on earth can they make more money.

Remember Venkys want to use Rovers to give world wide publicity to them selves and to their business. That is not possible in the Championship

In a word:

Yes.

Club gets relegated:

Sell players = money in

Parachute payments = money in

Trousering money in = money to Venkys.

Far more than they paid initially.

Sorry that is incorrect please reread what Kammy said All furtue income belongs to Barclays this does not stop as Rovers have been relegated.

[SAS]

Is it possible for venkys to abandon the club and not come into this country again.

Does international law make them liable?

[Miker]

Agree with David, I have the document and all it says is a mortgage has been taken out, nothing mentioned about the amount or anything else. Unlike the one taken out in December 2010 (which was secured against the 2010/2011 season money), this one's been secured against the 2011/2012 season money and all seasons thereafter.

I can't recall now, but it's possible that the loan taken out in December had to be paid back by June 2011. So it would make sense that a new one has now been taken out in August for this season (and future seasons).

There might be something sinister going on, but it's a huge assumption to make from these documents alone, given it is standard practice as David has pointed out.

Sorry that is incorrect please reread what Kammy said All furtue income belongs to Barclays this does not stop as Rovers have been relegated.

That's a good point. The previous mortgage specifically states Premier League 2010/2011 season, whereas this new one just states 2011/2012 season and all future seasons.

[dave birch]

No

Sorry that is incorrect please reread what Kammy said All furtue income belongs to Barclays this does not stop as Rovers have been relegated.

Kamy said that there's a new mortgage, no details attached. That's WHY I asked for more info.

However, facilities such as this do have a time limit, ie, they have to be renegotiated every x number of years.

If I were (still) a banker then I'd make certain that the facility had to be renewed every year, and it's significant that it appears to coincide with the commencement of the football season in England.

[Stuart]

I use debt to fund things, long term debt as well, do you?

It is not unusual.

There may be things that make this unusual, but AT THE MOMENT, we don't know, do we?

They no longer have the benefit of my doubt.

I now need proof of their good intentions for Blackburn Rovers Football Club.

[BangkokRover]

Got access to documents last night which confirm that Venky's took out a new mortgage on 25th August 2011 with Barclays. In order to get this mortgage they gave ALL income for the foreseeable future as guarantee. This now explains the spending at the end of the transfer window. The big problem is that if Rovers are relegated then that income will not be as high as being in the Premier League so I presume Barclays would call in the mortgage. Also possibly explains why they are not sacking Kean as that would cost money.

It does appear on the face of things that Venky's are not putting in their own money and are instead using credit to finance spending.

Document is with the likes of Philip so hopefully they can give more informed analysis soon.

Hope the highlighted part helps Dave

[Stuart]

No

Of course not, if the income goes down how on earth can they make more money.

Remember Venkys want to use Rovers to give world wide publicity to them selves and to their business. That is not possible in the Championship

Sorry that is incorrect please reread what Kammy said All furtue income belongs to Barclays this does not stop as Rovers have been relegated.

Surely you can only take out a mortgage against planned income? Transfer fees may never happen. What if all players held out like Junior.

The bank would have been stitched up.

This also means that any money we make from player sales does not necessarily become available for new signings, I would assume.

[dave birch]

They no longer have the benefit of my doubt.

I now need proof of their good intentions for Blackburn Rovers Football Club.

Jisty, I don't disagree with you.

I have very big doubts about their motives, plans and intentions.

Their taking out a mortgage like this is just a normal piece of business. Whether it affects the Rovers down the track is another matter and depends upon the Venkys meeting the repayment schedule agreed.

Hope the highlighted part helps Dave

So BKR, tell me the details of the mortgage document?

[John]

Don't worry, the great thing about the Rao family is that they will come out and explain everything clearly.

[BangkokRover]

So BKR, tell me the details of the mortgage document?

I agree that Kammy has not given us all the details but it's there in black and white. That they have given over control of all future income to the Bank, weather this for 1 season or 10 makes no difference.

Don't worry, the great thing about the Rao family is that they will come out and explain everything clearly.

Brilliant John

[dave birch]

I agree that Kammy has not given us all the details but it's there in black and white. That they have given over control of all future income to the Bank, weather this for 1 season or 10 makes no difference.

BKR, they are Kamy's words, not words from a legal document.

I'm not doubting what Kamy has written, but I'm saying that (from previous professional experience) facilities like this have an end (or review) date.

I've got one of these myself, mine gets reviewed every few years.

Seriously, it doesn't make sense from a lenders point of view to have an open ended facility in such a volatile industry (couldn't think of the right word, but you'll get my meaning)

[BangkokRover]

BKR, they are Kamy's words, not words from a legal document.

I'm not doubting what Kamy has written, but I'm saying that (from previous professional experience) facilities like this have an end (or review) date.

I've got one of these myself, mine gets reviewed every few years.

Seriously, it doesn't make sense from a lenders point of view to have an open ended facility in such a volatile industry (couldn't think of the right word, but you'll get my meaning)

Of course some business use these facilities all the time but as highlighted by John normally they have these for a reason. But we will never know why Rovers now have this debt saddled to them. On the other side of the coin, we both know that is Rovers will currently sitting pretty in the top 10 this would not be news at all.

But with Kean in charge I fear the only way is down. Even if we stay up this season he has lost the faith of the fans. BUT this thread is not about Kean its about Venkys and their financial management of Rovers

You are 100% correct in saying most of these things have review or end dates. It was Venkys who forgot/did not know that their last arrangement ran out that lead to Barclay's freezing the Phil Jones money.