ALK Capital or Farnell/Elkashashy takeover

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Quickenthetempo
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Quickenthetempo » Wed May 24, 2023 10:07 pm

123EasyasBFC wrote:
Wed May 24, 2023 9:31 pm
My point all along was with how big the rebuild was there was no way the cash in the bank was enough for us to stay in the league, hence garlick selling up in the first place , he would of had to borrow, having 80mil in the bank doesn’t mean we have 80mil to buy 6 players
It's all what ifs and maybes but the owner (pretty sure Garlick) should have been stronger with Dyche and sold Tarky to Leicester for 35m when we had chance.

A club our size can't turn that sort of money down.
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Paul Waine » Wed May 24, 2023 10:12 pm

aggi wrote:
Wed May 24, 2023 9:38 pm
Anyway, away from that brief diversion it seems that the MSD charge on Kettering Capital has now gone.
Apparently filed at Companies House on Friday 19th May.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Chester Perry » Wed May 24, 2023 10:19 pm

aggi wrote:
Wed May 24, 2023 9:00 pm
I made the point on another thread that ALK may get a bit of an easy ride as the complicated structure means a lot of people don't understand how much cash has left the club and you're a perfect example of that.
I think this is true - I hope this helps people to appreciate the nature of the outflow, it is a flow diagram for the takeover monies to December 31 2022 as I understand it

Takeover cash flows to May 2023.JPG
Takeover cash flows to May 2023.JPG (117.16 KiB) Viewed 1447 times
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Paul Waine » Wed May 24, 2023 10:21 pm

Chester Perry wrote:
Wed May 24, 2023 10:07 pm
so just Longside Properties Limited to go now
Hi CP, do you expect the Longside Properties charge to be recorded as satisfied soon? Have you any thoughts on why Kettering and Longside weren't shown as "satisfied" when the other entities were?

What security do you see for the £40m (rounded) debt to "UK lender?" Any ideas why there are no charges registered for this new debt (other than any new charge would reveal who the lender is)?

The accounts say "UK lender" and identifies MSD as "US lender." Have you anything that backs up (as your chart shows) that this may be Macquarie? If MSD is identified as "US lender" the logic suggests that Macquarie would be identified as "Australian lender." The £65m was lent to club by MSD UK. Similarly, Macquarie transfer advances are lent by Macquarie UK.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Paul Waine » Wed May 24, 2023 10:27 pm

Chester Perry wrote:
Wed May 24, 2023 10:19 pm
I think this is true - I hope this helps people to appreciate the nature of the outflow, it is a flow diagram for the takeover monies to December 31 2022 as I understand it


Takeover cash flows to May 2023.JPG
I like the diagram, though may be helpful to split out the funds from BFC to ALK to Previous-Directors into different time lines.

May also be good to split out the £55 million to MSD with penalties. What support do you have for £10 million penalties? How much of the £10 million is just the interest paid to MSD - in the same way that you list £0.4m interest paid to "UK lender?"

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Chester Perry » Wed May 24, 2023 10:31 pm

Paul Waine wrote:
Wed May 24, 2023 10:21 pm
Hi CP, do you expect the Longside Properties charge to be recorded as satisfied soon? Have you any thoughts on why Kettering and Longside weren't shown as "satisfied" when the other entities were?

What security do you see for the £40m (rounded) debt to "UK lender?" Any ideas why there are no charges registered for this new debt (other than any new charge would reveal who the lender is)?

The accounts say "UK lender" and identifies MSD as "US lender." Have you anything that backs up (as your chart shows) that this may be Macquarie? If MSD is identified as "US lender" the logic suggests that Macquarie would be identified as "Australian lender." The £65m was lent to club by MSD UK. Similarly, Macquarie transfer advances are lent by Macquarie UK.
I use Macquarie? to indicate that is what the Athletic is saying but we have had no firm confirmation on that to date - I am working on trying to get a firm answer though

The Athletic also say that ALK/VSL has provided the security for that loan - if we think back to Mel Morris at Derby he put up personal assets including properties as security for his MSD loan, perhaps the many partners did something similar for the new loan, alternatively or in conjunction a charge may rest upon Velocity Sports Ltd (Jersey), unfortunately such documents are not made public to us

as for LPL I would expect that the charge will be registered as satisfied at some point, it is clear from the accounts that MSD have been repaid in full
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Chester Perry » Wed May 24, 2023 10:37 pm

Paul Waine wrote:
Wed May 24, 2023 10:27 pm
I like the diagram, though may be helpful to split out the funds from BFC to ALK to Previous-Directors into different time lines.

May also be good to split out the £55 million to MSD with penalties. What support do you have for £10 million penalties? How much of the £10 million is just the interest paid to MSD - in the same way that you list £0.4m interest paid to "UK lender?"
£10m in penalties may be a little high, but it is based on the fact that an outstanding balance of £32,762,013.75 to MSD warranted a clearance payment of £39,748,458 according to the accounts

The diagram is from my latest article for the London Clarets, space was constricted (all my diagrams come from such articles)
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Paul Waine » Wed May 24, 2023 11:03 pm

ClaretPete001 wrote:
Wed May 24, 2023 9:07 pm
£37 million was spent on shares during the financial year to 20/21 with a further £10 million spent as a post balance sheet event but it was clearly available and there was £50 million in the bank in July 21. In fact, by July 22 the bank had fallen from £80 (19/20) million to £50 million (20/21) to £13 million (21/22).

So, £80 million in cashflow has fallen to £13 million and no one is worrying. At least you are clearly not...!

I think it is reasonable to argue that the over the course of the 21/22 season we could have spent significantly more on players and not been in debt. I would say £50 million but you can put whatever figure you like on it.

The proof of the pudding is that they spent it on shares and without the additional £65 million loan from MSD there would be no debt.

Now if you want to argue that it was £35 million and we could have had an additional 2 players and not 6 because we needed £15 million for wages then so be it. A £20 million midfielder and a £15 million striker may well have seen us safe

Otherwise, you are arguing that £50 million was spent on shares and frankly it couldn't have been spent on anything else

It was spent, and the debt is the MSD loan how self-evident can the point be?
I'm hoping we are speaking at cross-purposes.

As suggestion: when we speak of balance sheet values we speak of the date of that balance sheet, so cash at 31st July 2020, cash at 31st July 2021 and cash at 31st July 2022. When we speak of cash flow we speak of cash coming into the business and cash going out of the business through the reporting period, so cashflow 19/20, 20/21, 21/22 etc.

I don't want to recall everything that happened in the transfer window summer 2021. A number of players were signed, Maxwel Cornet, Connor Roberts, Nathan Collins - and one I'd forgotten earlier, Aaron Lennon (I think AL was free transfer - but, no doubt, required being paid a wage). Some on here will recall the other players the club was believed to have pursued, but wasn't successful in signing.

In January 2022, the club signed Wout Weghorst and again the club was reported to have pursued signing another player though he eventually went elsewhere (or did he stay where he was on a better contract).

I'm pretty sure that the club didn't set out to get relegated at the end of the 2021/22 season even though that's how the season ended up. I think we can accept that the club gave Sean Dyche a better contract in the first half of that season - even though SD ended up being fired some months later.

None of these actions are evidence that ALK didn't want to invest in and grow the club.

Yes, I'm not worried about the club's finances (including the debt). Alan Pace and ALK are smart enough to be able to manage things. They are the people that have bought the club. They understand what they are doing in the way they have financed the acquisition. Yes, it includes debt. Yes, they have used money borrowed from the club to finance some of their acquisition of the club.

Please don't call me a glory hunter. I like supporting Burnley when they are a successful football team. I think most of us will agree that we've enjoyed the last season. We've enjoyed Vincent Kompany managing the team. We've enjoyed the many new players Vincent Kompany has signed for the club - all, very obviously, with Alan Pace's financial support. Yes, I've been a Burnley supporter for many years when we couldn't describe them as a successful team. But, let's enjoy the good times and hope that they continue for many seasons.

Vincent Kompany is a very smart guy. Not only does he understand how to manage a football team he also understands the finances of football teams. He has said that he discussed finance with Alan Pace before agreeing to join the club. He has recently signed a new contract with the club - and, if we accept some accuracy in the media reports - turned down offers to join either Spurs or Chelsea (and, maybe one or two other clubs).

I made my own judgement when we all learnt that Alan Pace was in the running to buy the club that this would be good for BFC. I never imagined that less than 2 years later Vincent Kompany would be our manager. However, I take a lot of confidence that Vincent Kompany understands that the club has the finances he needs to achieve his and the club's ambitions.

UTC

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Paul Waine » Wed May 24, 2023 11:12 pm

Chester Perry wrote:
Wed May 24, 2023 10:31 pm
I use Macquarie? to indicate that is what the Athletic is saying but we have had no firm confirmation on that to date - I am working on trying to get a firm answer though

The Athletic also say that ALK/VSL has provided the security for that loan - if we think back to Mel Morris at Derby he put up personal assets including properties as security for his MSD loan, perhaps the many partners did something similar for the new loan, alternatively or in conjunction a charge may rest upon Velocity Sports Ltd (Jersey), unfortunately such documents are not made public to us

as for LPL I would expect that the charge will be registered as satisfied at some point, it is clear from the accounts that MSD have been repaid in full
Thanks, CP. Got it. I must read the Athletic article sometime.

I agree it is possible that security for the £40 million from "UK lender" is provided by ALK/VSL investors. I'd expect this to be limited to the investors who are also club directors, not least on the basis why would anyone guarantee a debt if they have no direct control on how the entity that received the debt performs.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Chester Perry » Wed May 24, 2023 11:28 pm

Paul Waine wrote:
Wed May 24, 2023 11:12 pm
Thanks, CP. Got it. I must read the Athletic article sometime.

I agree it is possible that security for the £40 million from "UK lender" is provided by ALK/VSL investors. I'd expect this to be limited to the investors who are also club directors, not least on the basis why would anyone guarantee a debt if they have no direct control on how the entity that received the debt performs.
there is also a personal connection that may have helped - ALK Capital LLC founder member Morgan Edwards once worked for Macquarie

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by dsr » Wed May 24, 2023 11:29 pm

123EasyasBFC wrote:
Wed May 24, 2023 9:31 pm
My point all along was with how big the rebuild was there was no way the cash in the bank was enough for us to stay in the league, hence garlick selling up in the first place , he would of had to borrow, having 80mil in the bank doesn’t mean we have 80mil to buy 6 players
Garlick had a choice. He could have used the £114m to sign players and pay wages, or he could have sold the club and taken the money for himself via ALK. Which one would give us a better chance of survival?

Instead of buying players with that money, we used it to sign a new board of directors.
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by ClaretPete001 » Thu May 25, 2023 12:33 am

Paul Waine wrote:
Wed May 24, 2023 11:03 pm
I'm hoping we are speaking at cross-purposes.

As suggestion: when we speak of balance sheet values we speak of the date of that balance sheet, so cash at 31st July 2020, cash at 31st July 2021 and cash at 31st July 2022. When we speak of cash flow we speak of cash coming into the business and cash going out of the business through the reporting period, so cashflow 19/20, 20/21, 21/22 etc.

I don't want to recall everything that happened in the transfer window summer 2021. A number of players were signed, Maxwel Cornet, Connor Roberts, Nathan Collins - and one I'd forgotten earlier, Aaron Lennon (I think AL was free transfer - but, no doubt, required being paid a wage). Some on here will recall the other players the club was believed to have pursued, but wasn't successful in signing.

In January 2022, the club signed Wout Weghorst and again the club was reported to have pursued signing another player though he eventually went elsewhere (or did he stay where he was on a better contract).

I'm pretty sure that the club didn't set out to get relegated at the end of the 2021/22 season even though that's how the season ended up. I think we can accept that the club gave Sean Dyche a better contract in the first half of that season - even though SD ended up being fired some months later.

None of these actions are evidence that ALK didn't want to invest in and grow the club.

Yes, I'm not worried about the club's finances (including the debt). Alan Pace and ALK are smart enough to be able to manage things. They are the people that have bought the club. They understand what they are doing in the way they have financed the acquisition. Yes, it includes debt. Yes, they have used money borrowed from the club to finance some of their acquisition of the club.

Please don't call me a glory hunter. I like supporting Burnley when they are a successful football team. I think most of us will agree that we've enjoyed the last season. We've enjoyed Vincent Kompany managing the team. We've enjoyed the many new players Vincent Kompany has signed for the club - all, very obviously, with Alan Pace's financial support. Yes, I've been a Burnley supporter for many years when we couldn't describe them as a successful team. But, let's enjoy the good times and hope that they continue for many seasons.

Vincent Kompany is a very smart guy. Not only does he understand how to manage a football team he also understands the finances of football teams. He has said that he discussed finance with Alan Pace before agreeing to join the club. He has recently signed a new contract with the club - and, if we accept some accuracy in the media reports - turned down offers to join either Spurs or Chelsea (and, maybe one or two other clubs).

I made my own judgement when we all learnt that Alan Pace was in the running to buy the club that this would be good for BFC. I never imagined that less than 2 years later Vincent Kompany would be our manager. However, I take a lot of confidence that Vincent Kompany understands that the club has the finances he needs to achieve his and the club's ambitions.

UTC
I use the term Cashflow to differentiate between (1) what is in the bank required for future trading as opposed to the (2) cash surplus to trading requirements, which could be spent on balance sheet items like playing assets. I think you define a cash flow forecast, which is not the same. For example, a business doesn't go bust because it has cash flow issues some time in the future but because it doesn't have enough cash to trade now.

I pose the question of what proportion of £80 million in the bank at July 20 was required for future trading and couldn't be spent on intangible assets?

And I did so because you suggested that the £80 million was largely required for trading. The rebuttal of that is the £80 million in 19/20, £50 million in 20/21 and £13 million in 21/22. The figures speak for themselves - I don't have to posit an argument.

To corroborate that point, is the £50 million spent on shares in the 20/21 accounts. Again as Aggi says - it's all in black and white.
And the final point is that none of this spend contributed to debt: the debt is the MSD loan again in the 20/21 accounts.

This is not about intentions or opinions or even ALK but the truth of the thing and the objective reality of the situation.

If someone claims that the former owners would have had to go into debt to fund purchases in 20/21 as ALK have done then you have to say that it is not true.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Foshiznik » Thu May 25, 2023 1:20 am

claretonthecoast1882 wrote:
Wed May 24, 2023 1:42 pm
No I thought your comment was hilarious, well more stupid really.

I guess one mans ignorant/naive is another mans meltdown/panic. Nothing you say or do will alter what ever the outcome will be so why live fearing the worst of something you have no control of. If in 5 years time things have gone wrong and you can pat yourself on the back "I knew this would happen" would that make you feel better ?

Fearing what might happen will have no impact on anything, just like someone doing a podcast or writing articles won't.
At least try and be a grown up about it. There’s no panic here and the season we’ve just had completely outweighs any concerns I have.

It’s not a meltdown or panic it’s a genuine concern that our owners created debt, whether you agree or not. If you want to ridicule myself or others for having a differing view to you then maybe you’d be better off spending your time on Twitter than here.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by 123EasyasBFC » Thu May 25, 2023 7:12 am

ClaretPete001 wrote:
Thu May 25, 2023 12:33 am
I use the term Cashflow to differentiate between (1) what is in the bank required for future trading as opposed to the (2) cash surplus to trading requirements, which could be spent on balance sheet items like playing assets. I think you define a cash flow forecast, which is not the same. For example, a business doesn't go bust because it has cash flow issues some time in the future but because it doesn't have enough cash to trade now.

I pose the question of what proportion of £80 million in the bank at July 20 was required for future trading and couldn't be spent on intangible assets?

And I did so because you suggested that the £80 million was largely required for trading. The rebuttal of that is the £80 million in 19/20, £50 million in 20/21 and £13 million in 21/22. The figures speak for themselves - I don't have to posit an argument.

To corroborate that point, is the £50 million spent on shares in the 20/21 accounts. Again as Aggi says - it's all in black and white.
And the final point is that none of this spend contributed to debt: the debt is the MSD loan again in the 20/21 accounts.

This is not about intentions or opinions or even ALK but the truth of the thing and the objective reality of the situation.

If someone claims that the former owners would have had to go into debt to fund purchases in 20/21 as ALK have done then you have to say that it is not true.
If garlick felt like the way the club was operating was enough to keep bringing us success there would of been no reason for him to look for a new ownership, to me it’s clear garlick knew what needed to happen.

Explain how if you say we had 80mil in the bank we would have been able to replace the 9 players over 30, the new contracts of the players you wanted to keep, then all the salaries of the rest of the club employees.

You can’t possibly think we would of been able to rebuild an aging team staying in the premier league without having some form of debt or borrowing money

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by fatboy47 » Thu May 25, 2023 7:33 am

123EasyasBFC wrote:
Thu May 25, 2023 7:12 am
, to me it’s clear garlick knew what needed to happen.

Oh I think it's totally clear Garlick knew what needed to happen 😂

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by claretonthecoast1882 » Thu May 25, 2023 7:56 am

Foshiznik wrote:
Thu May 25, 2023 1:20 am
At least try and be a grown up about it. There’s no panic here and the season we’ve just had completely outweighs any concerns I have.

It’s not a meltdown or panic it’s a genuine concern that our owners created debt, whether you agree or not. If you want to ridicule myself or others for having a differing view to you then maybe you’d be better off spending your time on Twitter than here.

You could argue that if you prefer to post things like sell the ground, the training ground and all players then pocket the cash you would be better on twitter also.

No issue at all with people being uncomfortable with the debt but nonsense like you posted above deserves ridiculing. How many owners at other clubs have done all of the above ?

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by dsr » Thu May 25, 2023 9:15 am

123EasyasBFC wrote:
Thu May 25, 2023 7:12 am
If garlick felt like the way the club was operating was enough to keep bringing us success there would of been no reason for him to look for a new ownership, to me it’s clear garlick knew what needed to happen.

Explain how if you say we had 80mil in the bank we would have been able to replace the 9 players over 30, the new contracts of the players you wanted to keep, then all the salaries of the rest of the club employees.

You can’t possibly think we would of been able to rebuild an aging team staying in the premier league without having some form of debt or borrowing money
Garlick has £100m in the bank. You think that's "no reason to look for new ownership"? :shock:

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by 123EasyasBFC » Thu May 25, 2023 9:31 am

dsr wrote:
Thu May 25, 2023 9:15 am
Garlick has £100m in the bank. You think that's "no reason to look for new ownership"? :shock:
Yes which he knew he would get from a sale but the matter is that he also knew and said himself outside investment had to come one way or another for us to carry on competing, it could of been Garlick securing a big loan from MSD or Marquiee to help get funds needed to make the squad able to compete again

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by dsr » Thu May 25, 2023 10:49 am

123EasyasBFC wrote:
Thu May 25, 2023 9:31 am
Yes which he knew he would get from a sale but the matter is that he also knew and said himself outside investment had to come one way or another for us to carry on competing, it could of been Garlick securing a big loan from MSD or Marquiee to help get funds needed to make the squad able to compete again
We haven't had outside investment. No-one has put any money into the club as part of this deal, they have just taken money out.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by 123EasyasBFC » Thu May 25, 2023 11:05 am

dsr wrote:
Thu May 25, 2023 10:49 am
We haven't had outside investment. No-one has put any money into the club as part of this deal, they have just taken money out.
Borrowing from someone else is still from outside the club, don’t really know what your getting at, I’m not for one second claiming the new ownership is right or wrong the way they have done things, I’m literally saying whoever the owners where from 19-20 onwards we always knew we needed other money, whether that be outside investment or borrowing and putting the club into debt

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Chester Perry » Thu May 25, 2023 11:12 am

dsr wrote:
Thu May 25, 2023 10:49 am
We haven't had outside investment. No-one has put any money into the club as part of this deal, they have just taken money out.
this is a point that few appear to care about even if they have realised the truth of it, as we rapidly approach the 30 month anniversary of the arrival of the current owners.

Interestingly the only people who have 'invested' in the club are those who are paying the increased prices it charges - I know of very few who currently find that an issue that bothers them. Matchday revenues were at record highs in the last accounts and I expect them to be so again in the next ones that cover the season just passed - A third year of Price increases will see that figure likely be matched, possibly bettered, for next season (with fewer games and more season ticket holders).

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Chester Perry » Thu May 25, 2023 11:32 am

123EasyasBFC wrote:
Thu May 25, 2023 11:05 am
Borrowing from someone else is still from outside the club, don’t really know what your getting at, I’m not for one second claiming the new ownership is right or wrong the way they have done things, I’m literally saying whoever the owners where from 19-20 onwards we always knew we needed other money, whether that be outside investment or borrowing and putting the club into debt
The point is none of that borrowed money has served to benefit the club in its activities, beyond the replacement of the board and the approach now being taken by them, it has been used to buy the club and not a penny of it has been used for infrastructure development, transfer fees or wages, in fact the servicing of that borrowed money has so far cost the club about £46m of money being taken from its cashflow, then there is the additional net £49.8m that has been loaned to the owners to assist with share purchases in the club.

The club still has £39.7m of debt that is serving no purpose to it at all and is paying £3m a year interest on that debt.

so when you look at the numbers

- £96m+ net has been taken away from the club in loans, external debt repayments (including early repayment penalties) and refinancing together with associated interest payments.
- £39.7m of debt has still to be repaid
- a further £3m is paid in interest each year that debt is held

Even if the debt was cleared by the club today (assuming no repayment penalties) the club would be £85.7m out of pocket with the prospect of never seeing the additional £49.8m is has loaned the owners being repaid, That takes the total number to £135.5m that the club could be out of pocket - all of it spent to facilitate the takeover not the development of the club.

The debt will not be cleared today so the final cost to the club in funding the takeover will continue to grow

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Jellybean » Thu May 25, 2023 11:57 am

Oh dear, I had a look at this thread in the hope that things were looking more positive but I'm back to being anxious about it all again . If no one has put any money in then how did we pay for all the signings last season, just from the sales we made on Dwight and others?

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Foshiznik » Thu May 25, 2023 11:58 am

claretonthecoast1882 wrote:
Thu May 25, 2023 7:56 am
You could argue that if you prefer to post things like sell the ground, the training ground and all players then pocket the cash you would be better on twitter also.

No issue at all with people being uncomfortable with the debt but nonsense like you posted above deserves ridiculing. How many owners at other clubs have done all of the above ?
It was an extreme example of a worst case scenario. It's really not that difficult to understand. However, continue being disrespectful from behind your keyboard if that's how you get your thrills, i don't mind.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by claretonthecoast1882 » Thu May 25, 2023 12:07 pm

Foshiznik wrote:
Thu May 25, 2023 11:58 am
It was an extreme example of a worst case scenario. It's really not that difficult to understand. However, continue being disrespectful from behind your keyboard if that's how you get your thrills, i don't mind.

If it was just an extreme example I apologise for mistakenly thinking you had these fears.

When you said " Personally, I will hold that fear until the debt is gone fully." I read it that you had these fears. Hope this comes across as being respectful while admitting I misunderstood you.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by 123EasyasBFC » Thu May 25, 2023 12:09 pm

Chester Perry wrote:
Thu May 25, 2023 11:32 am
The point is none of that borrowed money has served to benefit the club in its activities, beyond the replacement of the board and the approach now being taken by them, it has been used to buy the club and not a penny of it has been used for infrastructure development, transfer fees or wages, in fact the servicing of that borrowed money has so far cost the club about £46m of money being taken from its cashflow, then there is the additional net £49.8m that has been loaned to the owners to assist with share purchases in the club.

The club still has £39.7m of debt that is serving no purpose to it at all and is paying £3m a year interest on that debt.

so when you look at the numbers

- £96m+ net has been taken away from the club in loans, external debt repayments (including early repayment penalties) and refinancing together with associated interest payments.
- £39.7m of debt has still to be repaid
- a further £3m is paid in interest each year that debt is held

Even if the debt was cleared by the club today (assuming no repayment penalties) the club would be £85.7m out of pocket with the prospect of never seeing the additional £49.8m is has loaned the owners being repaid, That takes the total number to £135.5m that the club could be out of pocket - all of it spent to facilitate the takeover not the development of the club.

The debt will not be cleared today so the final cost to the club in funding the takeover will continue to grow
That’s a whole lot of waffle for a point I’m making.

Do you think before the take over we would of been able to rebuild the squad needed to stay in the premier league and still make a profit each year?

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by dsr » Thu May 25, 2023 12:33 pm

123EasyasBFC wrote:
Thu May 25, 2023 12:09 pm
That’s a whole lot of waffle for a point I’m making.

Do you think before the take over we would of been able to rebuild the squad needed to stay in the premier league and still make a profit each year?
Let's try it the other way round. Do you think that if we repeated the trick and borrowed £60m and gave it to Mike Garlick, we would have a better chance of staying in the PL this time?

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Chester Perry » Thu May 25, 2023 12:37 pm

123EasyasBFC wrote:
Thu May 25, 2023 12:09 pm
That’s a whole lot of waffle for a point I’m making.

Do you think before the take over we would of been able to rebuild the squad needed to stay in the premier league and still make a profit each year?
If you look back you will find I always thought that the summer of 2020 was the moment a squad reset would have happened, Covid and its financial impact got in the way of that. There were a large number of contracts ending freeing up the wage bill and money in the bank to fund transfer fees. It is the combination of both that is the significant bit

and if you think what I posted was waffle, then there is a new definition for the term I was not aware of
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Nori1958 » Thu May 25, 2023 12:39 pm

Chester Perry wrote:
Thu May 25, 2023 12:37 pm
If you look back you will find I always thought that the summer of 2020 was the moment a squad reset would have happened, Covid and its financial impact got in the way of that. There were a large number of contracts ending freeing up the wage bill and money in the bank to fund transfer fees. It is the combination of both that is the significant bit

and if you think what I posted was waffle, then there is a new definition for the term I was not aware of
It was a bit waffling :lol:
What's your answer to his question though
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Chester Perry » Thu May 25, 2023 12:39 pm

claretonthecoast1882 wrote:
Thu May 25, 2023 12:07 pm
If it was just an extreme example I apologise for mistakenly thinking you had these fears.

When you said " Personally, I will hold that fear until the debt is gone fully." I read it that you had these fears. Hope this comes across as being respectful while admitting I misunderstood you.
In many ways it is possibly easier to think that the debt the owners have to the club is gone and treat any repayment as a bonus to the club's cash flow - I know I do in my forward outlook

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by aggi » Thu May 25, 2023 12:46 pm

I admire those who are still persevering with this. After it being explained half a dozen different ways I just accepted they can't/won't understand.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by aggi » Thu May 25, 2023 12:48 pm

Jellybean wrote:
Thu May 25, 2023 11:57 am
Oh dear, I had a look at this thread in the hope that things were looking more positive but I'm back to being anxious about it all again . If no one has put any money in then how did we pay for all the signings last season, just from the sales we made on Dwight and others?
Yep. We had one of the highest net transfer profits in the division. Sold something like £70m and bought something like £40m (very rough figures there).

Our position is decent. If we hadn't had gone back up within a couple of years it would have been very precarious but going straight back up (I suspect ahead of schedule) is very positive for the finances.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Nori1958 » Thu May 25, 2023 12:49 pm

aggi wrote:
Thu May 25, 2023 12:46 pm
I admire those who are still persevering with this. After it being explained half a dozen different ways I just accepted they can't/won't understand.
It's difficult to understand fully, when even the knowledgeable posters cannot agree with each other though

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Lancasterclaret » Thu May 25, 2023 12:50 pm

aggi wrote:
Thu May 25, 2023 12:46 pm
I admire those who are still persevering with this. After it being explained half a dozen different ways I just accepted they can't/won't understand.
Genuinely think its "can't"

I got lost around about 100 pages ago

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by 123EasyasBFC » Thu May 25, 2023 1:07 pm

Chester Perry wrote:
Thu May 25, 2023 12:37 pm
If you look back you will find I always thought that the summer of 2020 was the moment a squad reset would have happened, Covid and its financial impact got in the way of that. There were a large number of contracts ending freeing up the wage bill and money in the bank to fund transfer fees. It is the combination of both that is the significant bit

and if you think what I posted was waffle, then there is a new definition for the term I was not aware of
You still didn’t answer the question, do you think we would of been able to go rebuild the squad from the end of 19-20 and stay in the premier league whilst continuing to make a profit?

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by bfcjg » Thu May 25, 2023 1:08 pm

Reading this thread and the excellent contribution from our more financially astute Clarets makes me less begrudging of the fees my accountant charges, it's a minefield 😁 .

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by 123EasyasBFC » Thu May 25, 2023 1:09 pm

dsr wrote:
Thu May 25, 2023 12:33 pm
Let's try it the other way round. Do you think that if we repeated the trick and borrowed £60m and gave it to Mike Garlick, we would have a better chance of staying in the PL this time?
So you agree with my point that garlick would have needed to borrow money also then?

You seem to be trying to create a new argument re garlick and pace which isn’t what I’m saying, I’m saying regardless of who owned the club, that from the end of 19-20 significant investment was needed to rebuild the squad and the only way of doing that was us not being a debt free club and having to spend money one way or another

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by 123EasyasBFC » Thu May 25, 2023 1:11 pm

aggi wrote:
Thu May 25, 2023 12:46 pm
I admire those who are still persevering with this. After it being explained half a dozen different ways I just accepted they can't/won't understand.
I’ll ask you the same question then, do you think under any ownership we could of rebuilt the squad to stay in the premier league and still make a profit?

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Foshiznik » Thu May 25, 2023 1:26 pm

123EasyasBFC wrote:
Thu May 25, 2023 1:11 pm
I’ll ask you the same question then, do you think under any ownership we could of rebuilt the squad to stay in the premier league and still make a profit?
I genuinely think we could have. We'd done it for 6 or so years with a decent amount of profit that could have been reinvested at a greater amount than it was with more long term planning than we had. Would it have looked as pleasing on the eye as we do now? Probably not but we can only speculate.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by 123EasyasBFC » Thu May 25, 2023 1:31 pm

Foshiznik wrote:
Thu May 25, 2023 1:26 pm
I genuinely think we could have. We'd done it for 6 or so years with a decent amount of profit that could have been reinvested at a greater amount than it was with more long term planning than we had. Would it have looked as pleasing on the eye as we do now? Probably not but we can only speculate.
All about opinion isn’t it, I don’t think we could have purely due to the age of the players who needed replacing, the players with sell on value you would of been keeping around if you where rebuilding to stay in the league

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Foshiznik » Thu May 25, 2023 1:35 pm

123EasyasBFC wrote:
Thu May 25, 2023 1:31 pm
All about opinion isn’t it, I don’t think we could have purely due to the age of the players who needed replacing, the players with sell on value you would of been keeping around if you where rebuilding to stay in the league
That's a fair assumption given our transfer market culture under SD. If there was no thought of selling the club 2/3/4 years prior to the takeover, i do like to think Garlick would have backed him more in the lead up and therefore funded younger players with a 5 year plan to slowly transition from the old guard to the new. I could be completely wide of the mark on that assumption mind and we could equally have had a squad of 33 year olds and £200m in the bank.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by 123EasyasBFC » Thu May 25, 2023 1:43 pm

Foshiznik wrote:
Thu May 25, 2023 1:35 pm
That's a fair assumption given our transfer market culture under SD. If there was no thought of selling the club 2/3/4 years prior to the takeover, i do like to think Garlick would have backed him more in the lead up and therefore funded younger players with a 5 year plan to slowly transition from the old guard to the new. I could be completely wide of the mark on that assumption mind and we could equally have had a squad of 33 year olds and £200m in the bank.
If you think between 19-20 to 21-22 we had
Lowton, long, Mee, pieters, Westwood, Cork, Stephens, Lennon, JBG, Barnes, Jay Rod, Vydra all hitting 30 or already older than 30 at the end of 21-22, not a single one who’s left did we get a transfer fee for and the ones still with us we also won’t get a transfer fee for, so I just personally dont understand how we would of of been able to make 10/11 changes over 2 or 3 seasons whilst still making a profit

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by dsr » Thu May 25, 2023 1:50 pm

123EasyasBFC wrote:
Thu May 25, 2023 1:11 pm
I’ll ask you the same question then, do you think under any ownership we could of rebuilt the squad to stay in the premier league and still make a profit?
If you were to ask whether under any ownership we could have been where we are now but with £100m funds in the bank, the answer is undoubtedly yes. But obviously different decisions would have been made and we can never know what would have happened.

But what would have happened isn't the point. Even if you are 100% correct that we needed to go into debt, it isn't the going into debt that helps. If you borrow £60m and give it away to a former director, then you haven't strengthened the team. You haven't bought new players or paid more wages of built a new stand, you have given the cash away for no benefit.

Imagine you want to build an extension to your house, and you need to borrow money because you can't afford it out of cash. If you take a loan and spend it on architects and builders and the like then you get a bigger, nicer house. If you give it to the man across the street and never get it back, you don't. Burnley FC took out a loan and gave it to the man across the street.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by Foshiznik » Thu May 25, 2023 1:50 pm

123EasyasBFC wrote:
Thu May 25, 2023 1:43 pm
If you think between 19-20 to 21-22 we had
Lowton, long, Mee, pieters, Westwood, Cork, Stephens, Lennon, JBG, Barnes, Jay Rod, Vydra all hitting 30 or already older than 30 at the end of 21-22, not a single one who’s left did we get a transfer fee for and the ones still with us we also won’t get a transfer fee for, so I just personally dont understand how we would of of been able to make 10/11 changes over 2 or 3 seasons whilst still making a profit
I mean if we were shrewd and picked up a few signings for 1.5-3.5m like we did this summer over the past 3/4 years, i'd like to think it's highly probable. The problem with that is that we would need our recruitment and scouting network to significantly improve from that time for that to happen and that aspect is highly improbable when it appears our scouts only watched Stoke City's games.
Last edited by Foshiznik on Thu May 25, 2023 1:52 pm, edited 1 time in total.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by fatboy47 » Thu May 25, 2023 1:51 pm

I'm still unclear as to why, if Garlick was able to trouser £80m from the club, some people insist we couldnt possibly have continued without outside investment.

It's beyond belief that some cling to the belief of his being some kinda Burnley supporting philanthropist.

He so clearly saw the amount of lucre that Dyche's tenure had generated, grabbed the till and legged it. I don't think he's anymore a Burnley fan than Jack Straw.

That's his right of course, but spare us the violins eh?

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by 123EasyasBFC » Thu May 25, 2023 1:57 pm

dsr wrote:
Thu May 25, 2023 1:50 pm
If you were to ask whether under any ownership we could have been where we are now but with £100m funds in the bank, the answer is undoubtedly yes. But obviously different decisions would have been made and we can never know what would have happened.

But what would have happened isn't the point. Even if you are 100% correct that we needed to go into debt, it isn't the going into debt that helps. If you borrow £60m and give it away to a former director, then you haven't strengthened the team. You haven't bought new players or paid more wages of built a new stand, you have given the cash away for no benefit.

Imagine you want to build an extension to your house, and you need to borrow money because you can't afford it out of cash. If you take a loan and spend it on architects and builders and the like then you get a bigger, nicer house. If you give it to the man across the street and never get it back, you don't. Burnley FC took out a loan and gave it to the man across the street.
Again waffle without answering what I asked you,

I’m not trying to claim anything about the current owners what what has happened to the money, and who gave what to who, my point was the state of the squad needed investment and we didn’t have enough money in the back to invest properly and run the club as normal hence the sale and the debt and borrowing

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by 123EasyasBFC » Thu May 25, 2023 2:00 pm

Foshiznik wrote:
Thu May 25, 2023 1:50 pm
I mean if we were shrewd and picked up a few signings for 1.5-3.5m like we did this summer over the past 3/4 years, i'd like to think it's highly probable. The problem with that is that we would need our recruitment and scouting network to significantly improve from that time for that to happen and that aspect is highly improbable when it appears our scouts only watched Stoke City's games.
I didn’t ever remember us picking up signings during the prem seasons for 1.5-3.5mil

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by aggi » Thu May 25, 2023 2:30 pm

123EasyasBFC wrote:
Thu May 25, 2023 1:11 pm
I’ll ask you the same question then, do you think under any ownership we could of rebuilt the squad to stay in the premier league and still make a profit?
What I first responded to was Without the debt we wouldn’t have been able to sign cornet of Collins and even that debt wasn’t enough. which is completely wrong and a fundamental misunderstanding of what the debt was used for.

As for your new question, possibly.

Assuming we were following the route of selling to bring in fees and bringing in younger, unproven players then yes. Would that team stay in the Premier League, who knows? But Everton have spent hundreds of millions and are still at risk of going down. No-one can answer your straw-man question because no-one knows the answer.

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Re: ALK Capital or Farnell/Elkashashy takeover

Post by aggi » Thu May 25, 2023 2:33 pm

Nori1958 wrote:
Thu May 25, 2023 12:49 pm
It's difficult to understand fully, when even the knowledgeable posters cannot agree with each other though
Agreed that there are certainly gaps in knowledge and some take different leaps than others to fill them but I think everyone who understands anything can agree that the debt has solely been used to buy the shares off the old shareholders and not invested into the club. It is very clear that is the case.
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Re: ALK Capital or Farnell/Elkashashy takeover

Post by ClaretPete001 » Thu May 25, 2023 2:34 pm

123EasyasBFC wrote:
Thu May 25, 2023 1:57 pm
Again waffle without answering what I asked you,

I’m not trying to claim anything about the current owners what what has happened to the money, and who gave what to who, my point was the state of the squad needed investment and we didn’t have enough money in the back to invest properly and run the club as normal hence the sale and the debt and borrowing
I get your point Easy but let's unpack the big picture first.

Your premise is: we didn't have enough money in the bank so we sold it to people with no money who immediately took £50 million out of the bank to spend on shares? Can you see the problem?

In 21/22 we had enough money to spend on players but ALK spent it on shares.....! That's a fact..

The question then is: do we have a business model to sustain PL football in the longer term?

Possibly not, but the resolution to that is not selling it to people with no money who immediately take £50 million out of the bank to spend on shares.

And I suppose your final point is: did we have enough cash in the bank to fund a spend in 21/22 to stave off relegation and then replace the ten out of contract players at the start of 22/23.

That is a tough one because most of them had become surplus to requirements anyway so we may well have done.

The underlying problem is this: if we do not have a business model that generates enough surplus to fund the investment in a PL squad then ALK are exactly the wrong people to sell to because they have made the underlying problem much worse.

And the final question is - if you are correct and we needed to invest to replace the ten players then how would ALK have paid for it given they spent £50 million on shares in 21/22 and £25 million paying off MSD in 22/23.

And we could only afford that because we sold off the best part of our PL squad..

Who is going to lend the club £50 million to spend on intangible assets with no security so they must have had a plan to fund a spend out of cash and not from debt.

And this is a club with a matchday and commercial revenue of £20 million.

Can you see how absurd all this is...?

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