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New buyers put off by £20 million hole in accounts

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Interesting from Phil Smith there. Let’s see how it plays out. Definitely seems that they’ve put in £16m of their own money or thereabouts though. I’d suggest that a sale price should begin around there - and not double that figure.
 

barts45 said:
I see huge amounts of potential personally! At our lowest ebb so hopefully only way is up if we ever got took over

Own ground, aol, potential is one thing we do have
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TBH we have plenty of potential but with an owner wanting too much money and a £20m whole in the accounts that's before you add in the costs of getting the academy, recruitment, scouting and coaching up to code no many people will see us as that attractive of an investment. Being in League One doesn't help matters.

That's why this £20m hole pissing me off. That money would cover all the key areas and still have money to invest in the squad. Now that the money won't be coming back into the club and SD refusing to take it off the asking price we won't have many buyers.
 
North Yorks Mackem said:
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I'm still not entirely sure this isn't all just normal "accounting" that goes on in all businesses all the time, and that someone is simply trying to stir up shit here.

As I said before, if the club has a £20m credit note on its books, then the asking price goes up by £20m (ish). If that credit note is removed, then the asking price simply goes down by £20m.
Its pretty simple, no?
 
Black Cat Gypsy said:
TBH we have plenty of potential but with an owner wanting too much money and a £20m whole in the accounts that's before you add in the costs of getting the academy, recruitment, scouting and coaching up to code no many people will see us as that attractive of an investment. Being in League One doesn't help matters.

That's why this £20m hole pissing me off. That money would cover all the key areas and still have money to invest in the squad. Now that the money won't be coming back into the club and SD refusing to take it off the asking price we won't have many buyers.
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well in theory if you read their response it is all coming back in. And do we trust them based on their track record to date 😂
 
The Cabbage said:
Interesting from Phil Smith there. Let’s see how it plays out. Definitely seems that they’ve put in £16m of their own money or thereabouts though. I’d suggest that a sale price should begin around there - and not double that figure.
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The FPP loan has to be factored in as well. It's hardly a coincidence that the share issue in Sunderland was virtually identical to the sterling value of that loan. It's about £20m themselves (which includes the £12.6m for the shares) plus the loan amount, which has come from Madrox, even if it's not the ultimate source of that money.

At the risk of sticking my head over the parapet, I'd say those answers have been written by a lawyer.
 
PTR said:
I'm still not entirely sure this isn't all just normal "accounting" that goes on in all businesses all the time, and that someone is simply trying to stir up shit here.

As I said before, if the club has a £20m credit note on its books, then the asking price goes up by £20m (ish). If that credit note is removed, then the asking price simply goes down by £20m.
Its pretty simple, no?
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It's in accordance with standard practice, but the writeoff is unusual. Mind you, so is a holding company having a balance due to a subsidiary.
 
PTR said:
I'm still not entirely sure this isn't all just normal "accounting" that goes on in all businesses all the time, and that someone is simply trying to stir up shit here.

As I said before, if the club has a £20m credit note on its books, then the asking price goes up by £20m (ish). If that credit note is removed, then the asking price simply goes down by £20m.
Its pretty simple, no?
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I think the point is that there is no credit note but the valuation suggests that there should be.
 
Grumpy Old Man said:
The FPP loan has to be factored in as well. It's hardly a coincidence that the share issue in Sunderland was virtually identical to the sterling value of that loan. It's about £20m themselves (which includes the £12.6m for the shares) plus the loan amount, which has come from Madrox, even if it's not the ultimate source of that money.

At the risk of sticking my head over the parapet, I'd say those answers have been written by a lawyer.
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I guess I’d disagree that it needs to be factored in by right. The loan amount is a problem to Madrox. They borrowed that money to allow them to invest in the club. It hasn’t particularly increased the value of the club so that’s for them to sort out.

Just hope that their assertion that this money will not result in debt from club to Madrox is watertight. I’d hate to think that the £11m put in post the debt cancellation is automatically recoverable by Madrox.
 
PTR said:
Would a £20m write off of owed monies translate to a loss on the books? Any FFP issues with this?
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It will show as an exceptional expense in SAFC's accounts. It will increase any loss for the year, but doesn't affect SCMP, because that requires player wage costs to be less than 60% of turnover; profit or loss is not a factor.
The Cabbage said:
I guess I’d disagree that it needs to be factored in by right. The loan amount is a problem to Madrox. They borrowed that money to allow them to invest in the club. It hasn’t particularly increased the value of the club so that’s for them to sort out.

Just hope that their assertion that this money will not result in debt from club to Madrox is watertight. I’d hate to think that the £11m put in post the debt cancellation is automatically recoverable by Madrox.
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£9m of that was in shares, so that's not repayable.
 
Chucky Puddin said:
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Through all the obfuscation the message I get loud and clear is that Donald is going nowhere until he gets us out of League 1. At which FPP will take a majority holding, with SD able to walk away with a profit, or stay in a capacity of FPP’s choosing.

Trying to be optimistic (not easy I know), best hope is that we emerge from the wreckage of this season with a squad bolstered by some of the better players from the teams that really hit the financial skids. I think PP is capable of getting us out of the league, we’ve little choice anyway. Maybe the players will respond positively to no crowd, away teams won’t up their game as much.

That’s as much glass half full as I can muster!
 
Coeus said:
They said he would be more visible. That equates to going to a game or two.
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Like everything we have heard from them I still find that article very confusing bordering on contradictory. On one hand we are in 2 years into a 5 year plan with our overseas investor looking to come and live in London - On the other hand we are committed to selling the club to the right people with the best vision for the club
 
The Cabbage said:
I guess I’d disagree that it needs to be factored in by right. The loan amount is a problem to Madrox. They borrowed that money to allow them to invest in the club. It hasn’t particularly increased the value of the club so that’s for them to sort out.

Just hope that their assertion that this money will not result in debt from club to Madrox is watertight. I’d hate to think that the £11m put in post the debt cancellation is automatically recoverable by Madrox.
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It increases the value of the shares in issue by £9m. That becomes a factor in the valuation.
 
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