Deja Vu

[bighairyfaeleith]

http://thescotsman.scotsman.com/sport/Vladimir-Romanov-to-cut-Hearts.6596864.jp

[Hibbyradge]

Something smells rotten.

Why would UBIG want to invest further into a loss making operation?

Why would UBIG, who already own 95% of the shares want to invest another £10m?

[GloryGlory]

Something smells rotten.

Why would UBIG want to invest further into a loss making operation?

Why would UBIG, who already own 95% of the shares want to invest another £10m?

There isn't any "new" investment - it's a debt for equity swap. Mad Vlad is converting debt into shares in the club - i.e. taking a tighter stranglehold and reducing the already small influence of other shareholders by diluting their share of the equity.

Basically, juggling the numbers on the balance sheet to make it look better.

[Caversham Green]

Something smells rotten.

Why would UBIG want to invest further into a loss making operation?

Why would UBIG, who already own 95% of the shares want to invest another £10m?

It seems to me that they had to do it. I think HoMFC still have a £40m borrowing limit, Their debt at 31 July 2009 was £34m and they have last season's losses to add to that. We won't see the effect of this until the 2011 accounts are eventually produced (May 2012 if previous performance is anything to go by), but I very much doubt that their debt will fall below £30m.

I can't really see the point of this unless they couple it with a substantial forgiveness of debt. Bearing in mind that two years after a £12m DfE plus the biggest transfer income in their history they were no better off than before, £10m seems like throwing snowballs at tanks.

[ScottB]

How exactly is it a 'significant step towards profitability' then?

It's taking away a chunk of their debt sure, but surely to become profitable they need to reduce costs and / or increase their income?

Or is that just peg selling hobonomics?

[matty_f]

I've actually completely given up caring what those tramps get up to.
They've been a joke for ages but still bumble along. They're like noisy neighbours, not with the hassle of wasting any thoughts or time over.

[MB62]

I just think Vlad is such a maroon blooded, died in the wool, mega millionaire, kind hearted Yam that this is simply a damn good gesture of a £10m donation. What's £10m to a man of his means anyway?

[HIBERNIAN-0762]

Who really gives a toss about these muppets the quicker they disappear the better, the mad one is a crook and it's all there to see...tick tock,,,

[southern hibby]

Not into all this business stuff.
But does this basically mean that he has so many more shares that he can now sell? Not sure what the value of each share is but if can keep on doing this then these shares will end up like the OLD Russian RUBBLES. Not worth the paper they are written on or alternatively he can sell them for what he wants either way taking more money out of the YAMS.
Or am I just a green tinted hibs fan who has no idea what he is talking about?

[Big Frank]

More than fannying about with their debt, and Hibernians profits, can anyone remind me who is higher up in the league, and didn't lose a derby last year?

Football, you see, is the real business.

[Winston Ingram]

I like how they say 'it'll take the debt below Rangers' as if that's a good yardstick.

[matty_f]

Cheers big frank, folk were nearly considering having a bit of a laugh at them there, glad we had a timely reminder that we're pish in comparison, despite finishing higher than them last season.

[Big Frank]

Cheers big frank, folk were nearly considering having a bit of a laugh at them there, glad we had a timely reminder that we're pish in comparison, despite finishing higher than them last season.


Easy mattie. 2 digs in 2 threads:confused::confused:

Considering you have "completely given up caring what those tramps get up to". Looks a tad like you weren't "nearly considering having a bit of a laugh at them".

Or have I got this wrong.

You're a big boy now in your new role. Chill abit.

[matty_f]

What other thread did I have a dig? : confused:

Nearly considering is a long way from caring though.

[NGP]

It means **** all. All designed to keep the debt below the £40m limit. Take in last years losses and this years, the time the accounts come out with this transaction in it, the debt will still be around the same level as the last set of figures - £34.7m. No change, The will survive as long as Romanov stills shows an interest, there is no grand plan, either for success or wiping them out. They will only be in trouble when / if Romanov walks away and no one will take on or pay the debt off.

[Andy74]

They will be seeing this as good news again when it's anything but.

At the end of the day this will cover a year's loss again whilst increasing Vlad's ownership further and there's only so many times that will work.

[PaulSmith]

Dress it up as you can but I can only see it being £10m less that Hearts have on their bottom line of debt.

Including the last debt for equity swap is that not £22m over the last 3/4 years that has been written off.

Vlad/UBIG doesn't need to increase his stake holding as he already owns enough shares to do what he wants with the club.

[Big Frank]

What other thread did I have a dig? : confused:

Nearly considering is a long way from caring though.

Is the threat of relegation a reality.

Matty 2 Big Frank 0.

[timebomb]

They will be seeing this as good news again when it's anything but.

At the end of the day this will cover a year's loss again whilst increasing Vlad's ownership further and there's only so many times that will work.

To be honest Hearts financnes have been a shambles long before Vlad came in but I was curious about the bit I highlighted in bold.

He already owns around 95% of the shares so I son't see how it makes any more difference to Hearts how many more shares he has as he already holds around 95% share - so he can do what he likes. If his shareholding creaps up up to 96 -99% it doesn't matter as he will still has as much control as he would have had before the transaction / spreadsheet exercise.

[matty_f]

:greengrin: the one on the other thread was a fair point though, frank.

you're a big boy though, sure you take them in the spirit they're intended.

Is that three now? :tee hee:

[Caversham Green]

On their fishul site now. http://www.heartsfc.co.uk/articles/20101025/hearts-unveil-debt-for-equity-plan_2241384_2193963

They're talking about 'removing' over a quarter of their debt, which means that it currently stands at just under £40m and will reduce to about £30m - surprise surprise. I note they also describe it as short-term, so it looks like this course of action was pretty much forced upon them.

[Sergey]

I think it would be better to wait until after the EGM to find out what is actually being done, rather than rely on a PR stunt on their official site, for two reasons.

1) There was previous talk from Feditovas that the stand reconstruction (remember that) would be included in any future DfE deal. Although it's not mentioned in the statement, it doesn't mean that that the deeds won't be transferred to UBIG as part of the deal.

2) There is still a £17.6M loan due to UBIG (that was payable back in Feb, IIRC) that remains unpaid. Writing off £10M could pave the way from them to squirrel the due balance out of the club in cash.

We/they will probably have to wait until the accounts are published to find out what the score and debt level actually is.

[Caversham Green]

More than fannying about with their debt, and Hibernians profits, can anyone remind me who is higher up in the league, and didn't lose a derby last year?

Football, you see, is the real business.

Fair enough. While they were racking up that debt we've won a trophy more recently than them, played in Europe more recently than them and finished above them in two of the last three seasons. We've also laid sounder foundations for future success and completed our stadium.

[MrSmith]

On their fishul site now. http://www.heartsfc.co.uk/articles/20101025/hearts-unveil-debt-for-equity-plan_2241384_2193963

They're talking about 'removing' over a quarter of their debt, which means that it currently stands at just under £40m and will reduce to about £30m - surprise surprise. I note they also describe it as short-term, so it looks like this course of action was pretty much forced upon them.

Upon reading that, you get the feeling that the supporters will swallow it hook line and sinker. However, a question I would be asking:

Looking at the percentage of ownership: Is there a rule for limited companies or PLC's that the highest percentage owner can't do anything without complete backing from the shareholders?

[Caversham Green]

Upon reading that, you get the feeling that the supporters will swallow it hook line and sinker. However, a question I would be asking:

Looking at the percentage of ownership: Is there a rule for limited companies or PLC's that the highest percentage owner can't do anything without complete backing from the shareholders?

Generally, if the majority shareholder owns more than 95% the other shareholders are stuffed. I think they went beyond that with the last issue.

[ScottB]

Surely the other shareholders shares are virtually worthless by now, they've been diluted to such an extent.

Is there a limit to how many shares they can issue? Surely they can't go on coughing up more and more shares?

[HFC 0-7]

It seems to me that they had to do it. I think HoMFC still have a £40m borrowing limit, Their debt at 31 July 2009 was £34m and they have last season's losses to add to that. We won't see the effect of this until the 2011 accounts are eventually produced (May 2012 if previous performance is anything to go by), but I very much doubt that their debt will fall below £30m.

I can't really see the point of this unless they couple it with a substantial forgiveness of debt. Bearing in mind that two years after a £12m DfE plus the biggest transfer income in their history they were no better off than before, £10m seems like throwing snowballs at tanks.

You seem to know your stuff about this DfE. How long can they keep doing this? My understanding was that this process de values the shares. If this is the case will there be a point that DfE is cannot be done?

[Peevemor]

Surely the other shareholders shares are virtually worthless by now, they've been diluted to such an extent.

Is there a limit to how many shares they can issue? Surely they can't go on coughing up more and more shares?

The bit that confuses me is



UBIG currently owns directly, and controls indirectly via HOM 2005, 44,605,409 Ordinary Shares representing 95.07% of the Existing Ordinary Shares.ie. 44.6M shares @ 10p = £4.46M, with another £230k worth of shares outwith Vlad's control.

Now if these are 10p ordinary shares (the same as the new ones they are about to print), where's the £12M in equity that they previously swapped for debt?

[surreyhibbie]

To be honest Hearts financnes have been a shambles long before Vlad came in but I was curious about the bit I highlighted in bold.

He already owns around 95% of the shares so I son't see how it makes any more difference to Hearts how many more shares he has as he already holds around 95% share - so he can do what he likes. If his shareholding creaps up up to 96 -99% it doesn't matter as he will still has as much control as he would have had before the transaction / spreadsheet exercise.

Have to agree there, he already owns enough shares to do whatever he likes. Apparently that means taking a loss on the chin, even though he is taking money out in interest payments... doesn't make any sense to me I'm afraid.

Unless he is waiting on property prices rising, but I can't see how he can make money on this...:confused:

[proud_and_green]

I am not clear how this makes things any different. It seems to be that the £10m has now been written off in return for equity in the company which really means each is now worth less than it was before because the total has been divided into more bits. As the report says this probably hasn't changed anything for Vlad but has devalued the holdings of each share owned by each of the other shareholders. Although presumably if this reduces overheads by £500k it will increase the general value of the company - but that is presumably only relevant to other shareholders if they do make a profit.

[Peevemor]

Have to agree there, he already owns enough shares to do whatever he likes. Apparently that means taking a loss on the chin, even though he is taking money out in interest payments... doesn't make any sense to me I'm afraid.

Unless he is waiting on property prices rising, but I can't see how he can make money on this...:confused:

On paper he's strengthened UBIG, in that £10M of extremely dodgy debt will now show as the same amount in increased assets - a swing of £20M.

[HenryMonk]

On paper he's strengthened UBIG, in that £10M of extremely dodgy debt will now show as the same amount in increased assets - a swing of £20M.

assets have to be worth £20m tho, no?

ie tynie's worth probably only £15m never mind £20!!

[HIBERNIAN-0762]

Some hilarious responses on boak back, on their knees again to him it seems, the never ending comedy roadshow

:lolyam:

[HenryMonk]

vlad's grand plan went doon the toilet when the financial markets slumped and property prices took a dive. its gonna take years(and if they ever do again) for tynie to be worth anything to recover his dodgy debts into proper cash!

thats my take on it anyways!!

[proud_and_green]

assets have to be worth £20m tho, no?

ie tynie's worth probably only £15m never mind £20!!

Are debts not shown as assets anyway? Only when they move to being bad debts do they become liabilities......i think!

So no £20m swing.

[Sandy]

vlad's grand plan went doon the toilet when the financial markets slumped and property prices took a dive. its gonna take years(and if they ever do again) for tynie to be worth anything to recover his dodgy debts into proper cash!

thats my take on it anyways!!

Which is why I can't see them going down the pan any time soon, he would have to take a substantial loss and even he isn't that stupid is he :confused:

[proud_and_green]

Which is why I can't see them going down the pan any time soon, he would have to take a substantial loss and even he isn't that stupid is he :confused:

I think that has always been the case, the real threat to hearts has always been someone outside his operations calling on loans or debts.

[Caversham Green]

Surely the other shareholders shares are virtually worthless by now, they've been diluted to such an extent.

Is there a limit to how many shares they can issue? Surely they can't go on coughing up more and more shares?

In pure business terms all the shares are worthless including UBIG's. The asset value is cancelled out several times over by debt and there is nothing to suggest that they will make any profits in the future, therefore no prospect of a return on investment.


You seem to know your stuff about this DfE. How long can they keep doing this? My understanding was that this process de values the shares. If this is the case will there be a point that DfE is cannot be done?

No, there's no limit to the number of shares in issue, so they can keep doing it indefinitely.


The bit that confuses me is

ie. 44.6M shares @ 10p = £4.46M, with another £230k worth of shares outwith Vlad's control.

Now if these are 10p ordinary shares (the same as the new ones they are about to print), where's the £12M in equity that they previously swapped for debt?

The 10p is only the nominal value of the shares. It doesn't really mean much in terms of the value of the business or consequently their market value. What has happened in effect is that UBIG have paid £10m for worthless shares. Aside from the £10m reduction in debt, the value of the club stays the same - it's just divided into more pieces (of which UBIG now own a higher proportion). In answer to question about the previous £12m it's been hosed up the wall and the stain has dried out.

There's no doubt that this is all to the benefit of HoMFC (by making them slightly less worthless) but it does beg the question, why not go the whole hog and write off all the debt if they are serious about 'rescuing' the club?

[Peevemor]

Are debts not shown as assets anyway? Only when they move to being bad debts do they become liabilities......i think!

So no £20m swing.

You're right, but shares "worth" £10M look better on paper than £10M of unrecoverable debt.

[Newry Hibs]

So - if doing this DfE wipes off 10m from their debt, why not do it 3.5 times as much and hey presto they become debt free? Or even 4 times as much and they would be in profit by 5m? Or maybe I just don't understand the yamenomics. :confused:

[HenryMonk]

Which is why I can't see them going down the pan any time soon, he would have to take a substantial loss and even he isn't that stupid is he :confused:

lithuania mananged to survive an iceland style crash so i cant see them going down tubes either:grr:

and if he is washing money for some russian gangsters then our only hope is they call in there debt/want there money back!

[Caversham Green]

Are debts not shown as assets anyway? Only when they move to being bad debts do they become liabilities......i think!

So no £20m swing.

Almost. When debts are thought to be bad they are charged aginst profit in the year they become bad (rather than becoming liabilities in the balance sheet). Since HoMFC have been insolvent for 5 years I would expect a bad debt provision to have been made some time ago.


You're right, but shares "worth" £10M look better on paper than £10M of unrecoverable debt.

Depends on how UBIG record them. Because there's no value on HoMFC's balance sheet, I would expect the investment to be written down to zero in UBIG's accounts. No change to the balance sheet, but the P&L would improve by £10m (bad debts "recovered") and the revaluation reserve would drop by the same amount.


Which is why I can't see them going down the pan any time soon, he would have to take a substantial loss and even he isn't that stupid is he :confused:

The thing is, he's already made the loss - the money he's thrown at HoMFC in the past is gone and this £10m is recognition of that. The only way he can recover anything is to return HoMFC to profit, get rid of all the debt and then sell them on. The best way to do that is to write off all the debt now.

[number 27]

They will not go into administration, they will continue to spend and will outperform us on the park.

We will continue to celebrate bean counting prudence and continue to under perform. Lack of backing to managers will lead to poorer and poorer results but hibs.net will continue to "hail the tache"

Sooner or later our lack of ambition will see crowds and income drop so far that we will no longer be able console each other about our wonderful balance sheet.

Still as long as we can still enjoy a giggle at their finances all will be rosy. :rolleyes:

[greenginger]

I don't know why they are trying to put a "gloss" on UBIG's accounts, nobody ever gets to see them.

I think its more a case of a sop to the Gorgie Grunts before the confirmation of the bad news.

A lot of the Sunday papers had the same story about red tape making it impossible to redevelop the Asbestos Stand , next will be the news that the safety certificate
is not being renewed and a move to Murrayfield is the only option until the new Vlad-Mega-Arena can be built. :agree:

[HenryMonk]

I don't know why they are trying to put a "gloss" on UBIG's accounts, nobody ever gets to see them.

I think its more a case of a sop to the Gorgie Grunts before the confirmation of the bad news.

A lot of the Sunday papers had the same story about red tape making it impossible to redevelop the Asbestos Stand , next will be the news that the safety certificate
is not being renewed and a move to Murrayfield is the only option until the new Vlad-Mega-Arena can be built. :agree:

imagine the mighty crowd of 12009 filling in the first 2 rows all way round!!

[HFC 0-7]

No, there's no limit to the number of shares in issue, so they can keep doing it indefinitely.



So whats to stop them spending beyond there means if they can keep doing this to keep themselves afloat? Who is actually losing the money when the DfE takes place?

[Part/Time Supporter]

No, there's no limit to the number of shares in issue, so they can keep doing it indefinitely.



So whats to stop them spending beyond there means if they can keep doing this to keep themselves afloat? Who is actually losing the money when the DfE takes place?

Romanov (in the form of UBIG). He lent Hearts the money and he's now written it off in return for (worthless) shares. The only thing stopping them doing it more is the profitability (or otherwise) of UBIG.

[ScottB]

I'd have thought the reason for him not clearing the debt completely was obvious.

This £10 million being wiped off saves Hearts £500k in interest payments year. So that means they will still be paying £1 million + to UBIG / UKIO in interest every year.

I wonder what size percentage that is out of his banks profits?

I firmly believe that the plan in the short to medium term was to make money out of Hearts' debt, at least once the property market collapsed and UKIO failed to enter the UK Banking Market.

[TheBall'sRound]

I'd have thought the reason for him not clearing the debt completely was obvious.

This £10 million being wiped off saves Hearts £500k in interest payments year. So that means they will still be paying £1 million + to UBIG / UKIO in interest every year.

I wonder what size percentage that is out of his banks profits?

I firmly believe that the plan in the short to medium term was to make money out of Hearts' debt, at least once the property market collapsed and UKIO failed to enter the UK Banking Market.

You could also speculate that by reducing the crippling debt they are making Hearts as an operation a more saleable asset. You're right in saying that the failure to break into the UK has left the business reasons for owning hearts (the loss off-setting, land ownership, involvement with the council and the community) utterly pointless.

It's hard to see what enjoyment Romanov gets from owning the club as he spends absolutely no time in the country to enjoy any of the benefits. As there are no rational (that word again) reasons for keeping it, I would suggest that he/UBIG may be trying to offload it in the near future.

The question is whether he has the compassion to sell it as a football club or as a piece of real estate when the market upturns.

[Jack]

I’m surprised there's £10m worth of equity left to swap with!!!

I thought the time had passed where the value of the shares issued and the value of the club meant there could be no further DfEs???

i.e. the shares ‘he’ bought, plus the previous DfEs and the little shareholdings the suckers hold I thought was within a penny or two of the real value of the club. You cant swap debt for equity that isn't there :blah:

[vahibbie]

:confused: If Vlad already owns 95% and he's giving back 10M for a further few % ownership what price tag does that make Hearts and all their assets...something like 200m+

Thing is, it disnae really matter. They've apparently been going down the tubes for ages but are still plugging away. The Loyal Yams seem happy enough and while their team is performing better than us who are we to ridicule.
Hopefully we will be in a better position to do so after the derby:greengrin

[son of haggart]

Surely the other shareholders shares are virtually worthless by now, they've been diluted to such an extent.

Is there a limit to how many shares they can issue? Surely they can't go on coughing up more and more shares?



Speaking as a small bloke with a fat shareholding (well, alright it's the other way around) my shares are worth less, but were worth nearly nothing before.

As Romanov has over 95% he can do what he likes with the club and its assets. the shareholdings of those like myself who didn't follow Lord Foulkes advice are held for sentimental reasons rather than power or money.

[ScottB]

Speaking as a small bloke with a fat shareholding (well, alright it's the other way around) my shares are worth less, but were worth nearly nothing before.

As Romanov has over 95% he can do what he likes with the club and its assets. the shareholdings of those like myself who didn't follow Lord Foulkes advice are held for sentimental reasons rather than power or money.

Yeah that's pretty much what I suspected, I just wondered if there is a limit, as as you say, the individual shares must be down to a few pence each in real terms at most, given the millions of them that have had to be issued for each of these DfE swaps, which leads me to wonder that if / once the shares are for all intents and purposes, worthless, how can they be swapped for anything?

[blindsummit]

Junk Bonds pure and simple

[down-the-slope]

Havent raed every post...so maybe already said:rolleyes:

Its being done as new UEFA rules would potentially have denied them playing in their competitions given level of debt....as they look more likley to get into a placing this season Vlad is not going to risk income / Ego trip from that by having a balance sheet that breaches this at financial year end

[Jim44]

They will not go into administration, they will continue to spend and will outperform us on the park.

We will continue to celebrate bean counting prudence and continue to under perform. Lack of backing to managers will lead to poorer and poorer results but hibs.net will continue to "hail the tache"

Sooner or later our lack of ambition will see crowds and income drop so far that we will no longer be able console each other about our wonderful balance sheet.

Still as long as we can still enjoy a giggle at their finances all will be rosy. :rolleyes:

:agree:My sentiments exactly. How long will it take for those awaiting the ultimate demise of HOMFC to realise it's all a pipedream and never going to happen. Meanwhile we are left to pick some solace out of the quality of Petrie's financial wizardry.

[Bostonhibby]

They will not go into administration, they will continue to spend and will outperform us on the park.

We will continue to celebrate bean counting prudence and continue to under perform. Lack of backing to managers will lead to poorer and poorer results but hibs.net will continue to "hail the tache"

Sooner or later our lack of ambition will see crowds and income drop so far that we will no longer be able console each other about our wonderful balance sheet.

Still as long as we can still enjoy a giggle at their finances all will be rosy. :rolleyes:

:agree: How I have been feeling recently, we have been running the business well, but as Frank says above its about more than that and theres a chance that if we just keep driving our club in the same way we will be continually trimming our cloth on the pitch to be in line with a decreasing turnover as fans express their concern at whats happening on the pitch by voting with their feet, and it becomes a downward spiral.

Having a laugh at the shambles over there doesn't have the same appeal any more as whatever we hypothesise, they are still around, still spending and whilst we play by the moral rules, the football and business rules just seem to allow whatever is going on over there to rumble on..............

[Bostonhibby]

Speaking as a small bloke with a fat shareholding (well, alright it's the other way around) my shares are worth less, but were worth nearly nothing before.

As Romanov has over 95% he can do what he likes with the club and its assets. the shareholdings of those like myself who didn't follow Lord Foulkes advice are held for sentimental reasons rather than power or money.

And thats the rub of it, fans have shares for reasons other than a fast buck, now you know how I felt when Mercer tried to hoover up enough of ours to gain control, many of us used our shares and anger to do something about it before it became too late. Sadly for guys like yourself, I fear you are way past the point of influencing it, or mattering to the organisation that owns your club, thank god we never had our own Fatty Foulkes type figure exerting any influence back then.

You must be proud of him

[Hibbyradge]

. Lack of backing to managers will lead to poorer and poorer results but hibs.net will continue to "hail the tache"



That's unfair and inaccurate.

Since Mowbray left, we must have recruited about 50 new players. Maybe someone can work the exact number out.

What more can the board do to back their managers? :confused:

[Andy74]

:agree:My sentiments exactly. How long will it take for those awaiting the ultimate demise of HOMFC to realise it's all a pipedream and never going to happen. Meanwhile we are left to pick some solace out of the quality of Petrie's financial wizardry.

Nah, sorry, they are running out of options like this one to take.

This time last year we were in the process of creating a near 20 point gap.

With thr right managment in charge of our playing resources the opportunity continues to be there to make sure we outperform them for some time to come.

They can't even afford the standard they have now, which isn't that great and it will only go down.

We still have some potential to increase our income and our spending on the team further.

Stand firm!:agree:

[Winston Ingram]

http://www.hmfckickback.co.uk/index.php?/topic/81180-debt-swap-story/

This lot are hilarious:confused:

[Woody70x2]

What I don't get is... if a 5% shareholding of Hearts is worth £10m that would make Hearts worth £200m?

I am sure that's how the folks on Dragons Den work?

I'm definitely out... :taxi

[EasterRoad4Ever]

:confused: If Vlad already owns 95% and he's giving back 10M for a further few % ownership what price tag does that make Hearts and all their assets...something like 200m+

Thing is, it disnae really matter. They've apparently been going down the tubes for ages but are still plugging away. The Loyal Yams seem happy enough and while their team is performing better than us who are we to ridicule.
Hopefully we will be in a better position to do so after the derby:greengrin

Exactly what I thought. You'd normally pay over the odds for shares that gave you a controlling interest but Vlad already owns all their asses, so a few more %points makes no difference whatsoever to him. What happens once he has 100% and the debt is still draining the club where does he go from there ?

Oh I know, he'll issue a few more shares and flog them to the fans :thumbsup:

[Kaiser1962]

I dont think it matters what his shareholding is anymore as it appears that Hearts have been annexed by UBIG. Although I am aware this is a paper exercise I am amazed that Vlad is sticking around over there.

[Bostonhibby]

What I don't get is... if a 5% shareholding of Hearts is worth £10m that would make Hearts worth £200m?

I am sure that's how the folks on Dragons Den work?

I'm definitely out... :taxi

:shocked: That much? Jeez just think what they will be worth when the supermegastadiumhotel is finished, Think I will buy a few shares now whilst the market is at its lowest.

[degenerated]

http://www.hmfckickback.co.uk/index.php?/topic/81180-debt-swap-story/

This lot are hilarious:confused:

you couldn't make some of it up


Let me get this right, with the DFE scheme that takes our debt to under £25m, and HIbs holding company have debts of £25m, along with their club debts of £2-3M on top of that, does this mean we now have less debt than balancedbooks FC? :whistling:


Could you argue we're in a healthier financial position than the jakeballs as UBIG is in relatively good shape compared to their holding company which is up to their eyes in debt?

Tick tock indeed... :lol:

:hilarious

[matty_f]

you couldn't make some of it up





:hilarious

Are they taking this mythical £25m as fact now? :faf:

[Crazyhorse]

Nah, sorry, they are running out of options like this one to take.

This time last year we were in the process of creating a near 20 point gap.

With thr right managment in charge of our playing resources the opportunity continues to be there to make sure we outperform them for some time to come.

They can't even afford the standard they have now, which isn't that great and it will only go down.

We still have some potential to increase our income and our spending on the team further.

Stand firm!:agree:

I suppose the problem is we have been hearing this for years and both teams plod on having ups and downs over the seasons but both being fairly crap.

Generally speaking the Jambos spend more on players wages but are run totally incompetently off the pitch yet there is little sign of them having to pay the piper yet.

I suppose the longer we wait for their oft predicted demise the more the fear is that they are going to get away with it somehow.

[Ed De Gramo]

:rolleyes:

Another one of these 'Hearts are going under' threads...

Its no happening....so lets move on and discuss Hibs :thumbsup:

[ScottB]

Where did us being £25 million in debt come from? Yamanomics?

[new malkyhib]

:rolleyes:

Another one of these 'Hearts are going under' threads...

Its no happening....so lets move on and discuss Hibs :thumbsup:

well said - Admins any chance of having a separate board for these "tick-tock" threads?

I'm tired of reading posts about their impending demise - maybe we can start a thread when we've beat them ON THE PARK? :confused:

[son of haggart]

And thats the rub of it, fans have shares for reasons other than a fast buck, now you know how I felt when Mercer tried to hoover up enough of ours to gain control, many of us used our shares and anger to do something about it before it became too late. Sadly for guys like yourself, I fear you are way past the point of influencing it, or mattering to the organisation that owns your club, thank god we never had our own Fatty Foulkes type figure exerting any influence back then.

You must be proud of him

Proud - hardly

He's a politician and his viewpoint on Romanov was that we needed to sell to him to retain his interst in the club (ie ensure he invested).
He was right in that respect, but ignored the inherent risks nad subsquently was 'shocked' when Romanov didn't behave like a British 'fan owner'.

My view was that Romanov wanted control to control the asset, and enjoy the fruits of his wealth, , not because he had any empathy with the fans or the club, so I wanted to hold my share simply for sentimental reasons (I could do nothing about the assets thing because clearly he was going to win, and it was the only game in town)

Having said all that, Romanov has more or less stuck by his original intentions, and has not tried to exploit the asset. he is behaving in fact more in line with his odd combination of businessman, sports fan and Eastern Orhodox catholic, than he is as a stereotypical 'foreign owner'.

Which is nice, as we are having more money invested than is being taken out. But we know it only lasts as long as Romanov s interested. Hibs will last as long as crowds and player sales match expenditure. Which again is nice as long as they do....

[Hank Schrader]

:rolleyes:

Another one of these 'Hearts are going under' threads...

Its no happening....so lets move on and discuss Hibs :thumbsup:

This isn't a "Hearts going under" thread :rolleyes:

[AK86]

in my experiences, if something smells like dung, it probably is dung
This to me smells like dung

Do they really think he is prepared to gift them millions of pounds? just because he is a nice guy?
Have none of them ever bothered to look into his checkered past?

[Kaiser1962]

But there is no money being put in SOH its just that Vlad is exchanging some of the money that is owed to UBIG for shares. I notice there are those now expecting the debt to be down to £25m but I would be stunned if it's below £30m and expect it to be back to £40m in a couple of years. This seems to be where Vlad has positioned Hearts.

That said he really dosent have to do this as it dosent really appear to benefit him one iota but, Vlad being Vlad, there will be reason for this. Mad? Certainly but stupid he is not.



Proud - hardly

He's a politician and his viewpoint on Romanov was that we needed to sell to him to retain his interst in the club (ie ensure he invested).
He was right in that respect, but ignored the inherent risks nad subsquently was 'shocked' when Romanov didn't behave like a British 'fan owner'.

My view was that Romanov wanted control to control the asset, and enjoy the fruits of his wealth, , not because he had any empathy with the fans or the club, so I wanted to hold my share simply for sentimental reasons (I could do nothing about the assets thing because clearly he was going to win, and it was the only game in town)

Having said all that, Romanov has more or less stuck by his original intentions, and has not tried to exploit the asset. he is behaving in fact more in line with his odd combination of businessman, sports fan and Eastern Orhodox catholic, than he is as a stereotypical 'foreign owner'.

Which is nice, as we are having more money invested than is being taken out. But we know it only lasts as long as Romanov s interested. Hibs will last as long as crowds and player sales match expenditure. Which again is nice as long as they do....

[HIBERNIAN-0762]

http://www.hmfckickback.co.uk/index.php?/topic/81180-debt-swap-story/

This lot are hilarious:confused:


"Thanks Vladimir thanks again"

:LOL::LOL::LOL:

:bye:

[Jack]

Proud - hardly

He's a politician and his viewpoint on Romanov was that we needed to sell to him to retain his interst in the club (ie ensure he invested).
He was right in that respect, but ignored the inherent risks nad subsquently was 'shocked' when Romanov didn't behave like a British 'fan owner'.

My view was that Romanov wanted control to control the asset, and enjoy the fruits of his wealth, , not because he had any empathy with the fans or the club, so I wanted to hold my share simply for sentimental reasons (I could do nothing about the assets thing because clearly he was going to win, and it was the only game in town)

Having said all that, Romanov has more or less stuck by his original intentions, and has not tried to exploit the asset. he is behaving in fact more in line with his odd combination of businessman, sports fan and Eastern Orhodox catholic, than he is as a stereotypical 'foreign owner'.

Which is nice, as we are having more money invested than is being taken out. But we know it only lasts as long as Romanov s interested. Hibs will last as long as crowds and player sales match expenditure. Which again is nice as long as they do....

TBH I just don’t see that. Where is the money he has put in?

Fag packet hobonomics suggests just the opposite. Millions have been spent on ‘nothing’. Where has it all gone?

There's been money spent, you’ve doubled your debt and more, circa +£20m, despite 2 debt for equities, circa £22m, and transfer income of around £15 - £18m, normal income of around £10m a year (how long has he been there £40 or £50m worth?). That’s around £100m during his reign to account for.

There's not a lot to show for it and absolutely no evidence the money used came from Vlad or his companies other than in overdraft / or more debt form that is costing your club upwards of a couple of million quid a year. Your club is propping up his bank!

And we’ll not even mention the registration fees for now!

[number 27]

That's unfair and inaccurate.

Since Mowbray left, we must have recruited about 50 new players. Maybe someone can work the exact number out.

What more can the board do to back their managers? :confused:



Well, I would suggest stumping up for 10 good ones the managers wanted as first picks instead of scraping round bargain basements picking up loads of ***** and praying some of them turn out OK.:dunno:

[oregonhibby]

Why do it at £10m a time. Keeps the debt around £25m. Write the whole thing off! Go on, why not?

Even if they do cut their costs and work to a profit how long would it take to clear the rest of the debt off? The only asset they have to sell is the ground.

Doesn't make sense to me, mind you it never has.

[lapsedhibee]

Where did us being £25 million in debt come from?

That'll probably be the amount with which Farmer and Petrie have lined their pockets. What with them being businessmen rather than philanthropists like Mr Romanov, and that.

[Caversham Green]

Are they taking this mythical £25m as fact now? :faf:

They haven't really thought their myth through either.

What they're claiming is that our owners have taken on the costs and responsibilities of £25m worth of debt for no return - not even more shares. That's more generous than their two debt for equity swaps combined, done years ago so no interest has accrued and there was no song and dance about it.

It is a myth though because - and here's the real point - we didn't need to do it.

[WindyMiller]

Are they taking this mythical £25m as fact now? :faf:

:agree:

Even when it's been debunked by one of there own.

:rolleyes:

http://www.hmfckickback.co.uk/index.php?/topic/80829-only-transfer-fees-keep-hobos-in-the-black/

[poolman]

http://www.hmfckickback.co.uk/index.php?/topic/81180-debt-swap-story/

This lot are hilarious:confused:


Posted Yesterday, 06:15
I think we should all wait to hear Sir Gay's take on this before making our minds up.

It could be a trick to cover up our impending administration.




C'mon Sergie, your public awaits :faf:

[Danderhall Hibs]

They haven't really thought their myth through either.

What they're claiming is that our owners have taken on the costs and responsibilities of £25m worth of debt for no return - not even more shares. That's more generous than their two debt for equity swaps combined, done years ago so no interest has accrued and there was no song and dance about it.

It is a myth though because - and here's the real point - we didn't need to do it.

Have the accounts with this £25m been published somewhere?

[poolman]

"Thanks Vladimir thanks again"

:LOL::LOL::LOL:

:bye:


Another gem

Mr Romanov - HMFC legend. How people can still hate him is beyond me. The guy is a god.


:faf:

[Kaiser1962]

Well, I would suggest stumping up for 10 good ones the managers wanted as first picks instead of scraping round bargain basements picking up loads of ***** and praying some of them turn out OK.:dunno:

RP gets a fair few of the "first picks" identified. Alan O'Brien jumps out. :devil:

[WindyMiller]

Have the accounts with this £25m been published somewhere?


It's all detailed here by the Gasman

:rolleyes:

http://www.hmfckickback.co.uk/index.php?/topic/80829-only-transfer-fees-keep-hobos-in-the-black/

[Caversham Green]

Have the accounts with this £25m been published somewhere?

Only in some yam fud's dreams.

[Danderhall Hibs]

Only in some yam fud's dreams.

So have accounts been published to show it's a load of pish then? Or are we just saying it's not true because we don't think it is?

Be good if we could post a link for them in a GIRUY kind of way.

[Part/Time Supporter]

So have accounts been published to show it's a load of pish then? Or are we just saying it's not true because we don't think it is?

Be good if we could post a link for them in a GIRUY kind of way.

Hibernian FC Limited accounts are available in the vault (http://www.hibs.net/showthread.php?192245-****Hibs-Accounts-To-31st-July-2010-See-Them-Here****) or via Companies House (http://wck2.companieshouse.gov.uk/9f0ae8dbe7030fac09afb3ad7304e655/wcprodorder?ft=1)

You can download the most recent accounts for HFC Holdings Ltd (the holding company that owns 99%+ of Hibernian FC) from Companies House (http://wck2.companieshouse.gov.uk/9f0ae8dbe7030fac09afb3ad7304e655/compdetails)

I last saw its accounts a couple of years ago - very boring they were too. There were significant debts in that company but they were paid off when the car park land was sold. The only major debt in Hibs (including the holding company) is the £6.5M in mortgages (due for redemption circa 2020) re: building the west stand.

[Arch Stanton]

The bit that confuses me is

ie. 44.6M shares @ 10p = £4.46M, with another £230k worth of shares outwith Vlad's control.

Now if these are 10p ordinary shares (the same as the new ones they are about to print), where's the £12M in equity that they previously swapped for debt?

It sure as hell won't be worth £12M anymore.:agree:

I can't see where it says that about 44.6M shares but I assume that the shares are called "10p shares" but their stock market value is a good bit higher than that (35p it says on page 2).

Anyway it all has the look of bailing the water out of a sinking boat using a tin can.

[Caversham Green]

So have accounts been published to show it's a load of pish then? Or are we just saying it's not true because we don't think it is?

Be good if we could post a link for them in a GIRUY kind of way.

I've got the last available accounts for both the holding company and the ultimate parent and they show without any doubt that there is no £25m debt. I'm struggling to upload the relevant pages, but I'll work on it. They're available from Companies House in any case.

[Caversham Green]

Hope this works this time. I've only posted the balance sheets as they're the only bits that are relevant. The Madencraig one shows the assets and liabilities of the whole group while the HFC one shows only that company's assets and liabilities.

Clearly, there is no £25m debt.

[matty_f]

Hope this works this time. I've only posted the balance sheets as they're the only bits that are relevant. The Madencraig one shows the assets and liabilities of the whole group while the HFC one shows only that company's assets and liabilities.

Clearly, there is no £25m debt.

Well done. that's one less straw they can clutch now.

You'd have to question their intelligence in believing it in the first place, until you remember that they're yams, and as such are used to believing any old pish.

[Caversham Green]

Sorry, I'm not very good at this - the HFC one was the wrong page. Hopefully this is the right one.

[Part/Time Supporter]

Sorry, I'm not very good at this - the HFC one was the wrong page. Hopefully this is the right one.

Ta. The £5M "creditors due after more than one year" are the (infamous) Morston Securities preference shares, IIRC.

[Danderhall Hibs]

Hope this works this time. I've only posted the balance sheets as they're the only bits that are relevant. The Madencraig one shows the assets and liabilities of the whole group while the HFC one shows only that company's assets and liabilities.

Clearly, there is no £25m debt.


Sorry, I'm not very good at this - the HFC one was the wrong page. Hopefully this is the right one.

Cheers CG. Just need someone to post them to that thread on KB now....

[Caversham Green]

Ta. The £5M "creditors due after more than one year" are the (infamous) Morston Securities preference shares, IIRC.

Correct, except that they were sold to Infocus Investments Ltd for £1 during the year. Infocus is another group company, which is why they disappear from the consolidated balance sheet.

I couldn't tell you why they did this, but Morston have taken a £5m haircut on the whole deal.

[StevieC]

What strikes me as funny is that the last DfE swap in 2008 apparently took the debt down to about £24m.

He does another DfE swap for £10m and is hailed a hero over the road and is apparently showing his commitment to the club.

However, on closer inspection, it seems to me that the £10m DfE swap is the £10m that he has somehow managed to lump onto the debt over the last 2 years to get it from £24m back up to £34m!!

:rolleyes:

[Andy Bee]

What strikes me as funny is that the last DfE swap in 2008 apparently took the debt down to about £24m.

He does another DfE swap for £10m and is hailed a hero over the road and is apparently showing his commitment to the club.

However, on closer inspection, it seems to me that the £10m DfE swap is the £10m that he has somehow managed to lump onto the debt over the last 2 years to get it from £24m back up to £34m!!

:rolleyes:

The thing is, that debt figure of £34.78m is almost a year and a half old and they're averaging losses of around £10m a year with nothing in the forthcoming accounting year to suggest any different so I wouldn't be surprised if the figure now is around the same if not higher, this also begs the question, have they went over the £40m limit and should all share holders not have to be consulted if so?

[Heraghty's]

Mad Vlad's big alumina plant in Bosnia . . .
Birac.

It's BANKRUPT, say auditors Deloitte. :agree:

What would this mean foor Mad Vlad and his big team?

SMELTDOWN? :bye:

[greenginger]

Mad Vlad's big alumina plant in Bosnia . . .
Birac.

It's BANKRUPT, say auditors Deloitte. :agree:

What would this mean foor Mad Vlad and his big team?

SMELTDOWN? :bye:


And it was described as "the Jewel in Romanov's business crown" back in 2005, how times have changed.

Liabilities of £50 million more than the value of the Company and more litigation to come !

It must knock a huge hole in UBIG's Accounts but will anyone ever know as not even Heart's auditors get to see them.

[Heraghty's]

Warning: Google translation . . .

Alumina Factory "Birac" from Zvornik is facing bankruptcy, as loss of this giant of 110 million higher than the value of property and amount to 729 KM, according to a report of the audit company "Deloitte".

Auditors "Deloitte" found that only in last year short-term liabilities of the company with 887 employees, which in 2003 Vladimir Romanov had bought, would exceed its assets for 109.3 million.

Against this enterprise is conducted more litigation. According to the auditors, Birac is the last business year ended with a loss of 14.1 million, liabilities of the company increased by 164 million KM, of which 45 million are borrowings and short-term liabilities amount rescheduled 5.7 million KM.

In the opinion of economists, this report is not a surprise.
Birac was consciously put in this situation, says Associate Economic Union of Associations of small shareholders Sinisa Bozic.

Bozic said that the company systematically brought to the bottom, sucking the capital over a number of related companies, which is the majority owner - UBIG in the meantime established in the RS.


Anyone for a game of Dominoes? :bye:

[StevieC]

Let me see if I've got this right ...

Romanov buys up "Birac" and over a period of 7 years he brings in a fair amount of cash which he re-distributes around some of his other companies ...
During this time he manages to run up a level of debt at "Birac" that eventually exceeds the total assets of the company ...
Until it is eventually declared bankrupt.

I'd be interested to see the final outcome of this scenario for "Birac".

:hmmm:

[bighairyfaeleith]

I guarantee when all these companies fail Romanov will have a nice wee stash put away somewhere, he won't lose out I guarantee it!!

[robinp]

Mad Vlad's big alumina plant in Bosnia . . .
Birac.

It's BANKRUPT, say auditors Deloitte. :agree:

What would this mean foor Mad Vlad and his big team?

SMELTDOWN? :bye:

Come on mate have a word with yourself, what do Deloitte know about financials, typical GFA Hobo 5hit stirring from Deloitte, full of us peg sellers jealous at Vlads empire! :rolleyes:

[Sergey]

And it was described as "the Jewel in Romanov's business crown" back in 2005, how times have changed.

Liabilities of £50 million more than the value of the Company and more litigation to come !

It must knock a huge hole in UBIG's Accounts but will anyone ever know as not even Heart's auditors get to see them.

Very interesting.

Earlier this year Birac agreed to a 5 year payment plan with the Bosnian equivalent of HMRC to pay back unpaid taxes.

Sound familiar?

[greenginger]

I think Johnston Carmichael, Hearts Auditors will have difficulty signing off Hearts accounts with a little paragraph explaining that they really have not got a clue about the real state of the company's finances.

[forthhibby]

I think Johnston Carmichael, Hearts Auditors will have difficulty signing off Hearts accounts with a little paragraph explaining that they really have not got a clue about the real state of the company's finances.

is that not standard on their accounts in recent years

[Kaiser1962]

Bosnia's Sole Alumina Plant Birac Turns to 9-mo Net Profit
BANJA LUKA (Bosnia and Herzegovina), November 1 (SeeNews) - Bosnia’s sole alumina plant Birac said on Monday it turned to a net profit of 2.26 million marka ($1.61 million/1.16 million euro) through September from a net loss of 7.39 million marka a year ago.

http://www.seenews.com/news/latestnews/bosnia_ssolealuminaplantbiracturnsto9-monetprofit-144640/


found this

[Heraghty's]

Yeah Birac's bosses deny they're bankrupt.

Who to believe . . . Mad Vlad or a world-famous auditing firm? :bitchy:


The first domino is toppling. :agree:

[Kaiser1962]

Yeah Birac's bosses deny they're bankrupt.

Who to believe . . . Mad Vlad or a world-famous auditing firm? :bitchy:


The first domino is toppling. :agree:

Do Birac not owe the money to themselves though? I dont understand?

[Hibs07p]

http://edinburghnews.scotsman.com/sport/Hearts-debt-for-equity-plan.6623585.jp

HEARTS shareholders have approved a debt-for-equity conversion which strengthens Ukio Bankas Investment Group's control of the club whilst erasing £10 million from their accumulated arrears.

Is there a difference between debt and arrears? if so, what does this statement actually mean.

[Part/Time Supporter]

Not really, the only difference might be in how the debt arose. ie most of Hearts' debt came about from trading losses ("accumulated arrears"), some of which Romanov has written off. Debt can also arise by other ways, like building new facilities or the leveraged takeovers of Man U and Liverpool.

[BSEJVT]

Dress it up as you can but I can only see it being £10m less that Hearts have on their bottom line of debt.

Including the last debt for equity swap is that not £22m over the last 3/4 years that has been written off.

Vlad/UBIG doesn't need to increase his stake holding as he already owns enough shares to do what he wants with the club.

I cant see it any other way either. Much as I woud like to.

There is no reason within this that's to not their betterment.

Caversham is correct, but its a strange one.

If it had ben me I wouldnt have done the last one either and showed them at over £50m in debt to me.

Only thought is its a muddying the water job for a future sale.

He know's the assets are far less than the liabilities so he is going to take a huge hit anyway.

Maybe he thinks that showing less debt make s a sale more likely?

I cant think of one other reason.

[BSEJVT]

Right, have read the whole thread now and will try to explain.

Think of a situation where you started off with a bank account with £100 in and ran a Ltd Company which you had started with 100 £1 shares which were fully paid.

That's where your £100 bank account came from.

You werent very good at business in year 1 and lost £99. You would therefore have 100 shares in a company worth £1 so the value of your shares would be worth 1p each. (Someone may be prepared to pay more for them, but unlikely)

Next year you become worse at busines and lose £1,000,001, you have never bought or retained any asset with that cash, just blown it all.

Therefore, thr company has no assets and owes £1m. As the company has no assets, your shares are worth ZIP

The bank that lent you that £1m wants it back.

As a shareholder you have no liability beyond your initial 100 £1 shares which were fully paid at the time so you can in theory walk away with no further enforceable liability.

However the bank wouldnt have lent the company the £1m without a personal guarantee from the owner (a Bond & Floating Charge would be no good in this mythical example as the company had no assets).

In order to get back their £1m the Bank call in the guarantee which they had secured over your other assets so you lose £1m

Imagine though that as well as being the owner of the failed business, you also owned the bank and had the ability to write off the debt.

All you do is write it off or in Hearts case Debt for Equity swap it and hey presto the failed business has no, or in Hearts case reduced levels of Debt.

The situation ends up with a business with no deb.

Unforunately for it, the value of its liabilities are still greater than the value of its assets, so the shares are still worthless and the guy who owns the Bank £1m worse off.

To summarise re Hearts:

The money has been invested (by way of increased bank borrowing) i.e they did spend the cash but needed to borrow money to fund it and dont seem to have retained anything of value from the investment.

They can issue as many shares as they want if someone will buy them or failing that nad them to the Bank in exchange for them for writing off a piece of the debt.

No -one will buy them as they are worthless because the liabilities of the company are still worth more than their assets, so the only possible route is debt for equity swap.

Even after which the company has negative value so the shares you aquired in exchange for £10m of debt written off are worthless. Just like the ones you already have!

Issuing more shares in a debt for equity swap doesnt increase the value of a company in a negative value position even after the transaction has been completed, it just reduces how much they owe. The shares are still worth ZIP, its just that there are more of them.

If he could somehow return the business to profitability, or sell assets, he would own more shares and get a bigger piece of the pie.

At ownership of 95%+ before the latest transaction the sums involved in any gain from doing so are utterly irrelevant.

As Vlad is the ultimate owner, he has written off £10m of debt in exchange for X shares currently worth £0 with little prospect of increasing beyond £0 any time soon.

He loses another £10m on top of past losses, the reasons for which we can only guess at being:

to get closer to meeting UEFA rules.

position the club for sale / flotation to the fans.

Defers questions from accountants of both the Bank and HMFC about continuing to trade a non performing asset with no hope of repaying debt levels

gets to hear " Vladimir Romanov.........." a few more times

Hope this is:

a) Correct
b) explains

[s.a.m]

Right read the whole thread now and will try to explain.

Think of a situation where you started off with a bank account with £100 in and ran a LTD Company which you had started with 100 £1 shares which were fully paid.

There's your £100 bank account.

You werent very good at business in year 1 and lost £99. You would therefore have 100 shares in a company worth £1 so the value of your shares would be worth 1p each. (someone may be prepared to pay more for them)

Next year you become worse and lose £1,000,001

The company has no assets and owes £1m. The comapny has no assets, your shares are worth ZIP

The bank that lent you that £1m wants it back, as a shareholder you have no liability beyond your initial 100 £1 shares which were fully paid at the time so you can walk.

However the bank wouldnt have lent you the £1m without a personal guarantee (a Bond & Floating Charge would be no good in this mythical example as the company had no assets). In order to get back their £1m they call in the guarantee which they had secured over your assets so you lose £1m

Imagine though that you owned the bank and had the ability to waive the debt.

All you do is write it off or in Hearts case Debt for Equity swap it.

The situation ends up with a business with no debt, no assets so worthless shares and the guy who owns the Bank £1m worse off.

To summarise:

You could argue the money had been invested (by way of increased bank borrowing) i.e they did spend the cash but needed to borrow money to fund it.

You can issue as many shares as you want if someone will buy them,no -one will as they are worthless because their liabilities are more than their assets, so the company has no value.

Issuing more shares in a debt for equity swap doesnt increase the value of a company in a negative value position even after the transaction has been completed, it just reuces how much they owe. The shares are still worth ZIP, its just that there are more of them.

If he could somehow return the business to profitability, or sell assets, he would own more shares and get a bigger piece of the pie, at ownership of 95%+ the sums involved are utterly irrelevant.

As Vlad is the ultimate owner, he has written off £10m of debt in exchange for X shares worth £0

He loses another £10m on top of past losses, the reasons for which we can only guess at being:

to get closer to meeting UEFA rules.

position the club for sale / flotation to the fans.

Defers questions from accountants of both the Bank and HMFC about continuing to trade a non performing assets with no hope of repaying debt levels

gets to hear " Vladimir Romanov.........." a few more times

Hope this is:

a) Correct
b) explains

Is it not the case that he has to do this to keep the debt under a previously agreed level? (30M, as I remember) IIRC this has happened for the past few years before the publication of the accounts, though I may be talking out of my hat. Pretty sure they have a borrowing limit, though.

[BSEJVT]

Is it not the case that he has to do this to keep the debt under a previously agreed level? (30M, as I remember) IIRC this has happened for the past few years before the publication of the accounts, though I may be talking out of my hat. Pretty sure they have a borrowing limit, though.

Probably,

Those rumours have abounded for years.

This would be covered under :

"defers questions.........."

[greenginger]

http://edinburghnews.scotsman.com/sport/Hearts-debt-for-equity-plan.6623585.jp

HEARTS shareholders have approved a debt-for-equity conversion which strengthens Ukio Bankas Investment Group's control of the club whilst erasing £10 million from their accumulated arrears.

Is there a difference between debt and arrears? if so, what does this statement actually mean.



Issuing 100,000,000. shares at 10 pence each. That's a lot of share certificates . I wonder where they'll store them ?

Now what where all these cardboard boxes for again ? :greengrin

[Caversham Green]

Is it not the case that he has to do this to keep the debt under a previously agreed level? (30M, as I remember) IIRC this has happened for the past few years before the publication of the accounts, though I may be talking out of my hat. Pretty sure they have a borrowing limit, though.


Probably,

Those rumours have abounded for years.

This would be covered under :

"defers questions.........."

It's £40m - doubled from £20m in February 2007. http://sport.scotsman.com/heartofmidlothianfc/Hearts-will-fight-forces-of.3350288.jp

The reports were saying the issue would reduce the debt by 25%. That suggests that the limit had been reached which may well be the reason for the whole thing.

[BSEJVT]

It's £40m - doubled from £20m in February 2007. http://sport.scotsman.com/heartofmidlothianfc/Hearts-will-fight-forces-of.3350288.jp

The reports were saying the issue would reduce the debt by 25%. That suggests that the limit had been reached which may well be the reason for the whole thing.

Thanks Caversham

Is the rest of my long long post post on the topic factually accurate?

[Caversham Green]

Thanks Caversham

Is the rest of my long long post post on the topic factually accurate?

It is indeed. The only other factor I can think of is how it appears in UBIG's balance sheet, but under most accounting conventions the overall effect would be neutral as both the debt and the shareholding are effectively worthless.

[BSEJVT]

It is indeed. The only other factor I can think of is how it appears in UBIG's balance sheet, but under most accounting conventions the overall effect would be neutral as both the debt and the shareholding are effectively worthless.

Thanks that was my thoughts as well.

[WhileTheChief..]

Sergejus Fedotovas's take on it.....

http://news.bbc.co.uk/sport1/hi/scotland/9185777.stm

Actually think he comes across ok, much more credible than Romanov.