http://www.sundaypost.com/news-views...plans-1.162896
Who's taking the hit, BOS or Johnston & Bowie? It's not too clear in the report.
GGTTH
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Thread: Killies debt (NHC)
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09-12-2013 09:15 AM #1
Killies debt (NHC)
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09-12-2013 09:18 AM #2
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hmmm. Partially owned british govt bank writes of £9m debt of football club. Uproar. Outrage.
Fully owned Lithuanian bank writes off £60m debt of football club. Is being actively encouraged to do so.
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09-12-2013 10:10 AM #3
So yet another club is going to be getting away with paying their debts, why are we bothering to pay ours. This sounds like administration light to me.
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09-12-2013 10:24 AM #4This quote is hidden because you are ignoring this member. Show Quote
It is decidedly not at the expense of the taxpayer though. If the debt is impaired that means it was already included in HBOS losses from earlier years, and in any case this arrangement is undoubtedly more beneficial to HBOS than the alternative of administration.
It also keeps the yams rooted to the bottom of the league, so it's all good.
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09-12-2013 10:53 AM #5
The bank have very little chance of seeing this £9m paid back and administration of killie means they would get either zero or less than 1p in the £ through cva. It sounds like they are taking about £2m in settlement of this debt from Johnston and Bowie and are effectively selling the debt of the club to them, they are in turn responsible for this debt but are allowing killies new owners to pay back only the amount it cost to buy the debt from the bank.
The same thing happens everyday on a much smaller scale to individuals who have debts they cannot afford, the bank will accept a smaller settlement figure to satisfy some of the debt and get it off the books or if it's going nowhere fast it will be sold on to debt collection agencies for the same reason.
Standard practice but because of the figures involved and the fact it's a football club means it's attracting a lot more attention
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09-12-2013 11:04 AM #6
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Debts get sold off all the time, this is no different. The difference between this and hearts for example is that the bank will get a decent % of its debt back. This wouldnt have been a case that Killie have said we cant pay it and the bank has taken their word for it. Lloyds will know exactly whether they are in a position to be able to pay that debt off or not, they will know they cant and this deal means they will get something back rather than nothing.
Its either 2 million of the 9 million or zero of the 9 million.
The only issue people have is whether Killie will be punished or not and I would imagine they cant be punished, owners and investors right off debt in football clubs all the time.
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09-12-2013 11:08 AM #7This quote is hidden because you are ignoring this member. Show Quote
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09-12-2013 11:45 AM #8This quote is hidden because you are ignoring this member. Show Quote
As an earlier poster said the debt would have been classed by Lloyds as impaired and therefore any return would show as extra profit, improving situation for Bank and by extension shareholders.
My only hope is that Bowie gets the bigger shareholding from it and Johnston finally pisses off as Killie would be far better served without him
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09-12-2013 12:22 PM #10
It also means Killie will be unable to borrow for a long time. Next season should see the whole top league living within there means. A step in the right direction.
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09-12-2013 12:45 PM #11This quote is hidden because you are ignoring this member. Show Quote
GGTTH
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09-12-2013 12:50 PM #12This quote is hidden because you are ignoring this member. Show Quote
If you assume they owe £25m to Lithuania, then an offer of £5.5m would represent a similar ratio. Seems fair.
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09-12-2013 12:55 PM #13This quote is hidden because you are ignoring this member. Show Quote
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09-12-2013 02:20 PM #14
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HKHibby
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09-12-2013 02:42 PM #15
Killie have never been big spenders so I don't really mind. Had they been spending money they never had on ridiculous wages like rangers and hearts, I would think it was scandalous they could just have that wiped.
It's only a good thing for Scottish football if the oldest clubs like killie survive.
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09-12-2013 02:47 PM #16This quote is hidden because you are ignoring this member. Show Quote
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09-12-2013 02:53 PM #17
So this big, bad Michael Johnstone will turn a nine million debt into two, soften the terms and take a hit in the process.
If he pulls this off and they still continue their campaign against him they deserve everything they get. They should be giving him keys to the city as he's basically saved them from admin and all that might follow.
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09-12-2013 03:20 PM #18This quote is hidden because you are ignoring this member. Show Quote
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09-12-2013 03:26 PM #19This quote is hidden because you are ignoring this member. Show Quote
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09-12-2013 03:33 PM #20This quote is hidden because you are ignoring this member. Show Quote
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09-12-2013 05:35 PM #21This quote is hidden because you are ignoring this member. Show Quote
Im going to ask for a 9000 bank loan tomorrow, then in 3 yrs time having not paid a penny back, im gonna offer them 2000...
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09-12-2013 06:02 PM #22This quote is hidden because you are ignoring this member. Show Quote
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09-12-2013 06:08 PM #23This quote is hidden because you are ignoring this member. Show Quote
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09-12-2013 06:29 PM #24
Mixed emotions on sickbag about this. A few saying meh let them get on with it, none of our business etc..... However one comment made me chortle " it should be a point deductible offence, it's a CVA in all but name" Haha some of them still hoping killie loose points to keep them up
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09-12-2013 06:52 PM #25This quote is hidden because you are ignoring this member. Show Quote
Hearts can't complain as they had two such debt right offs a couple of years ago but did not learn from it and kept spending like a drunken sailor on shore leave.
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09-12-2013 07:20 PM #26
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Was this money not about the same as they 'invested' in their hotel?
Space to let
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09-12-2013 08:17 PM #27
I really hope that they prolong it long enough to go into Admin after the season ends...
Now that would be worth reading about on fifteenpointsback
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09-12-2013 08:18 PM #28
Don't like how this sounds to be honest, but as it could mean the survival of the club then it is something which would put up with!
The main downside of this is it means we could be stuck with MJ forever.
He still won't be putting in a penny so maybe Bowie will have a sharholding 1.5 - 2 million times bigger than MJ.
The debt has been reduced from approx £12m to £9m (almost completely through MJ asset stripping) and in that time the bank have received approx £5 million in interest on the debt, they feel that they have little chance of getting the remainder and feel they they should get the best deal they can.
Not sure if it will happen but it might be interesting!
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09-12-2013 08:40 PM #29This quote is hidden because you are ignoring this member. Show Quote
It's not asset stripping if it's used for debt reduction - has Johnston benefitted in some other way?
And what period are you referring to as the interest figures quoted don't stack up for a £10-12m debt?
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09-12-2013 08:51 PM #30
Sorry asset stripping was probably the wrong term, what I meant was that he reduced the debt but by selling players, land etc rather than trading out of it through small amounts each season. He hasn't benefitted from that other than than ~£100k that he takes a season.
As far as I remember, and there is as always a great chance I am wrong, the interest that MJ had quoted as having been paid was over his tenure with Killie and the end of Jamie Moffat's so possibly over the course of ten years.
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