Extension of borrowing powers

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Extension of borrowing powers

Joined: April 2nd, 2014, 5:47 pm

May 30th, 2017, 7:21 pm #1

Any one else received a letter from the club about an EGM to approve an extension of borrowing powers?
Normally with something like this I would assume the Board knows what it's doing, but some of the stuff in the covering letter is a cause for concern.
First it says they only want the power to borrow more and they don't intend to exercise the power unless it would make the development cheaper. But if it was only something that might come in useful wouldn't they just sneak it through at the AGM and hope no-one would notice. Surely they would not incur the trouble and expense of an EGM unless there is a significant chance they will indeed be borrowing another £18 million.
Secondly, the new borrowing power is to be used only for a specified purpose of the new north-south stand, which seems to open up a legal minefield if the plans change in any significant way (would the borrowing still be lawful?)
Thirdly there is no explanation of how the 40 years lease and sublease arrangements will work, but presumably the club will be paying rent to the council which in turn will pay a rent to the financial institution, the amounts guaranteeing the institution will get back the cost of funding the stand and the profit it requires to enter into the deal in the first place.
Most significantly of all, the business plan seems to depend on Headingley getting the rights to international cricket after 2019 and also Headingley being a venue for the ECB t20 competition. At one time this would have been a near certainty but now I am not so sure. Does the Board have a plan B for the use of the modernised stadium if they do not get these staging rights? No clue from the letter.
I don't think I can support plans that I don't really understand because they haven't been properly explained, so will probably abstain.
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Joined: August 20th, 2013, 11:26 am

May 30th, 2017, 7:43 pm #2

Agree. I will also abstain. Not enough info re amount of annual rent and whether there are any alternative plans if things go pear-shaped. We may not get a T20 franchise. We may not get the International matches we are expecting. Do we have any guarantees that we will get these matches?

To many ifs, buts & may be's!!


Rent could be 18m divided by 40 years?? Around 500,000 per annum on top of the 700,000 we are already paying out in interest.
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Joined: September 7th, 2015, 9:28 pm

May 30th, 2017, 10:49 pm #3

Any one else received a letter from the club about an EGM to approve an extension of borrowing powers?
Normally with something like this I would assume the Board knows what it's doing, but some of the stuff in the covering letter is a cause for concern.
First it says they only want the power to borrow more and they don't intend to exercise the power unless it would make the development cheaper. But if it was only something that might come in useful wouldn't they just sneak it through at the AGM and hope no-one would notice. Surely they would not incur the trouble and expense of an EGM unless there is a significant chance they will indeed be borrowing another £18 million.
Secondly, the new borrowing power is to be used only for a specified purpose of the new north-south stand, which seems to open up a legal minefield if the plans change in any significant way (would the borrowing still be lawful?)
Thirdly there is no explanation of how the 40 years lease and sublease arrangements will work, but presumably the club will be paying rent to the council which in turn will pay a rent to the financial institution, the amounts guaranteeing the institution will get back the cost of funding the stand and the profit it requires to enter into the deal in the first place.
Most significantly of all, the business plan seems to depend on Headingley getting the rights to international cricket after 2019 and also Headingley being a venue for the ECB t20 competition. At one time this would have been a near certainty but now I am not so sure. Does the Board have a plan B for the use of the modernised stadium if they do not get these staging rights? No clue from the letter.
I don't think I can support plans that I don't really understand because they haven't been properly explained, so will probably abstain.
After several re-reads I have decided I must vote against the proposal.

I cannot support the motion and I believe abstaining would be tantamount to washing my hands of the situation.

The two clubs, their blue chip partners, and Leeds City Council have hatched a scheme to fund the new stand without taking on extra borrowing so they should be held to that in my view.

If the agreement is a good one for all parties then there is no need for the club to have a contingency fund of 18m in order to buy themselves out of it a couple of years down the line.

My suspicion is that the club fear they may not be able to service current debt and the new stand in future years and want to be in a position to incur new debt in order to keep up payments.

That way madness lies.
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Joined: April 2nd, 2009, 12:57 pm

May 31st, 2017, 8:51 am #4

Any one else received a letter from the club about an EGM to approve an extension of borrowing powers?
Normally with something like this I would assume the Board knows what it's doing, but some of the stuff in the covering letter is a cause for concern.
First it says they only want the power to borrow more and they don't intend to exercise the power unless it would make the development cheaper. But if it was only something that might come in useful wouldn't they just sneak it through at the AGM and hope no-one would notice. Surely they would not incur the trouble and expense of an EGM unless there is a significant chance they will indeed be borrowing another £18 million.
Secondly, the new borrowing power is to be used only for a specified purpose of the new north-south stand, which seems to open up a legal minefield if the plans change in any significant way (would the borrowing still be lawful?)
Thirdly there is no explanation of how the 40 years lease and sublease arrangements will work, but presumably the club will be paying rent to the council which in turn will pay a rent to the financial institution, the amounts guaranteeing the institution will get back the cost of funding the stand and the profit it requires to enter into the deal in the first place.
Most significantly of all, the business plan seems to depend on Headingley getting the rights to international cricket after 2019 and also Headingley being a venue for the ECB t20 competition. At one time this would have been a near certainty but now I am not so sure. Does the Board have a plan B for the use of the modernised stadium if they do not get these staging rights? No clue from the letter.
I don't think I can support plans that I don't really understand because they haven't been properly explained, so will probably abstain.
What is a "Blue Chip" financial institution?
I'll be voting in favour of the rule amendment because i think we need to back our Board and i agree that this is one of those pivotal moments in our history.
If we don't secure future International fixtures we cant afford to service our existing debt.
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Joined: October 17th, 2013, 6:36 pm

May 31st, 2017, 3:07 pm #5

Any one else received a letter from the club about an EGM to approve an extension of borrowing powers?
Normally with something like this I would assume the Board knows what it's doing, but some of the stuff in the covering letter is a cause for concern.
First it says they only want the power to borrow more and they don't intend to exercise the power unless it would make the development cheaper. But if it was only something that might come in useful wouldn't they just sneak it through at the AGM and hope no-one would notice. Surely they would not incur the trouble and expense of an EGM unless there is a significant chance they will indeed be borrowing another £18 million.
Secondly, the new borrowing power is to be used only for a specified purpose of the new north-south stand, which seems to open up a legal minefield if the plans change in any significant way (would the borrowing still be lawful?)
Thirdly there is no explanation of how the 40 years lease and sublease arrangements will work, but presumably the club will be paying rent to the council which in turn will pay a rent to the financial institution, the amounts guaranteeing the institution will get back the cost of funding the stand and the profit it requires to enter into the deal in the first place.
Most significantly of all, the business plan seems to depend on Headingley getting the rights to international cricket after 2019 and also Headingley being a venue for the ECB t20 competition. At one time this would have been a near certainty but now I am not so sure. Does the Board have a plan B for the use of the modernised stadium if they do not get these staging rights? No clue from the letter.
I don't think I can support plans that I don't really understand because they haven't been properly explained, so will probably abstain.
Bit more explanation from the Yorkshire Post :-http://www.yorkshirepost.co.uk/sport/cr ... -1-8570474
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Joined: January 7th, 2017, 9:51 am

May 31st, 2017, 3:55 pm #6

Any one else received a letter from the club about an EGM to approve an extension of borrowing powers?
Normally with something like this I would assume the Board knows what it's doing, but some of the stuff in the covering letter is a cause for concern.
First it says they only want the power to borrow more and they don't intend to exercise the power unless it would make the development cheaper. But if it was only something that might come in useful wouldn't they just sneak it through at the AGM and hope no-one would notice. Surely they would not incur the trouble and expense of an EGM unless there is a significant chance they will indeed be borrowing another £18 million.
Secondly, the new borrowing power is to be used only for a specified purpose of the new north-south stand, which seems to open up a legal minefield if the plans change in any significant way (would the borrowing still be lawful?)
Thirdly there is no explanation of how the 40 years lease and sublease arrangements will work, but presumably the club will be paying rent to the council which in turn will pay a rent to the financial institution, the amounts guaranteeing the institution will get back the cost of funding the stand and the profit it requires to enter into the deal in the first place.
Most significantly of all, the business plan seems to depend on Headingley getting the rights to international cricket after 2019 and also Headingley being a venue for the ECB t20 competition. At one time this would have been a near certainty but now I am not so sure. Does the Board have a plan B for the use of the modernised stadium if they do not get these staging rights? No clue from the letter.
I don't think I can support plans that I don't really understand because they haven't been properly explained, so will probably abstain.
"A blue chip is a nationally recognized, well-established and financially sound company. ... Blue chip companies are known to weather downturns and operate profitably in the face of adverse economic conditions, which helps to contribute to their long record of stable and reliable growth." (Source: "Investopedia")
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Joined: April 2nd, 2009, 12:57 pm

May 31st, 2017, 5:09 pm #7

Any one else received a letter from the club about an EGM to approve an extension of borrowing powers?
Normally with something like this I would assume the Board knows what it's doing, but some of the stuff in the covering letter is a cause for concern.
First it says they only want the power to borrow more and they don't intend to exercise the power unless it would make the development cheaper. But if it was only something that might come in useful wouldn't they just sneak it through at the AGM and hope no-one would notice. Surely they would not incur the trouble and expense of an EGM unless there is a significant chance they will indeed be borrowing another £18 million.
Secondly, the new borrowing power is to be used only for a specified purpose of the new north-south stand, which seems to open up a legal minefield if the plans change in any significant way (would the borrowing still be lawful?)
Thirdly there is no explanation of how the 40 years lease and sublease arrangements will work, but presumably the club will be paying rent to the council which in turn will pay a rent to the financial institution, the amounts guaranteeing the institution will get back the cost of funding the stand and the profit it requires to enter into the deal in the first place.
Most significantly of all, the business plan seems to depend on Headingley getting the rights to international cricket after 2019 and also Headingley being a venue for the ECB t20 competition. At one time this would have been a near certainty but now I am not so sure. Does the Board have a plan B for the use of the modernised stadium if they do not get these staging rights? No clue from the letter.
I don't think I can support plans that I don't really understand because they haven't been properly explained, so will probably abstain.
Thankyou.
I wasn't sure if it had some sort of legal status.
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Joined: October 17th, 2013, 8:44 pm

May 31st, 2017, 8:28 pm #8

Any one else received a letter from the club about an EGM to approve an extension of borrowing powers?
Normally with something like this I would assume the Board knows what it's doing, but some of the stuff in the covering letter is a cause for concern.
First it says they only want the power to borrow more and they don't intend to exercise the power unless it would make the development cheaper. But if it was only something that might come in useful wouldn't they just sneak it through at the AGM and hope no-one would notice. Surely they would not incur the trouble and expense of an EGM unless there is a significant chance they will indeed be borrowing another £18 million.
Secondly, the new borrowing power is to be used only for a specified purpose of the new north-south stand, which seems to open up a legal minefield if the plans change in any significant way (would the borrowing still be lawful?)
Thirdly there is no explanation of how the 40 years lease and sublease arrangements will work, but presumably the club will be paying rent to the council which in turn will pay a rent to the financial institution, the amounts guaranteeing the institution will get back the cost of funding the stand and the profit it requires to enter into the deal in the first place.
Most significantly of all, the business plan seems to depend on Headingley getting the rights to international cricket after 2019 and also Headingley being a venue for the ECB t20 competition. At one time this would have been a near certainty but now I am not so sure. Does the Board have a plan B for the use of the modernised stadium if they do not get these staging rights? No clue from the letter.
I don't think I can support plans that I don't really understand because they haven't been properly explained, so will probably abstain.
We'll just have to hang on 40 years and see how it works out. I must pop along to my doctor's for a prescription. I assume you can get the Elixir of Life on the National Health?
Bowlers win matches
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Joined: April 27th, 2007, 5:25 pm

May 31st, 2017, 10:41 pm #9

Any one else received a letter from the club about an EGM to approve an extension of borrowing powers?
Normally with something like this I would assume the Board knows what it's doing, but some of the stuff in the covering letter is a cause for concern.
First it says they only want the power to borrow more and they don't intend to exercise the power unless it would make the development cheaper. But if it was only something that might come in useful wouldn't they just sneak it through at the AGM and hope no-one would notice. Surely they would not incur the trouble and expense of an EGM unless there is a significant chance they will indeed be borrowing another £18 million.
Secondly, the new borrowing power is to be used only for a specified purpose of the new north-south stand, which seems to open up a legal minefield if the plans change in any significant way (would the borrowing still be lawful?)
Thirdly there is no explanation of how the 40 years lease and sublease arrangements will work, but presumably the club will be paying rent to the council which in turn will pay a rent to the financial institution, the amounts guaranteeing the institution will get back the cost of funding the stand and the profit it requires to enter into the deal in the first place.
Most significantly of all, the business plan seems to depend on Headingley getting the rights to international cricket after 2019 and also Headingley being a venue for the ECB t20 competition. At one time this would have been a near certainty but now I am not so sure. Does the Board have a plan B for the use of the modernised stadium if they do not get these staging rights? No clue from the letter.
I don't think I can support plans that I don't really understand because they haven't been properly explained, so will probably abstain.
"If the agreement is a good one for all parties then there is no need for the club to have a contingency fund of 18m in order to buy themselves out of it a couple of years down the line. My suspicion is that the club fear they may not be able to service current debt and the new stand in future years and want to be in a position to incur new debt in order to keep up payments. That way madness lies."

There's nothing irrational about the club wanting to have a contingency fund to take advantage of more favourable conditions that may pertain in a few years' time. It may even be quite a sensible thing to do. It's also important here to remember that quite soundly based economic entities can go bust because of negative cash flow, so, provided that you're confident in the underlying model, that's certainly a danger you want to avoid.
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Joined: April 2nd, 2009, 12:57 pm

June 1st, 2017, 6:59 am #10

Any one else received a letter from the club about an EGM to approve an extension of borrowing powers?
Normally with something like this I would assume the Board knows what it's doing, but some of the stuff in the covering letter is a cause for concern.
First it says they only want the power to borrow more and they don't intend to exercise the power unless it would make the development cheaper. But if it was only something that might come in useful wouldn't they just sneak it through at the AGM and hope no-one would notice. Surely they would not incur the trouble and expense of an EGM unless there is a significant chance they will indeed be borrowing another £18 million.
Secondly, the new borrowing power is to be used only for a specified purpose of the new north-south stand, which seems to open up a legal minefield if the plans change in any significant way (would the borrowing still be lawful?)
Thirdly there is no explanation of how the 40 years lease and sublease arrangements will work, but presumably the club will be paying rent to the council which in turn will pay a rent to the financial institution, the amounts guaranteeing the institution will get back the cost of funding the stand and the profit it requires to enter into the deal in the first place.
Most significantly of all, the business plan seems to depend on Headingley getting the rights to international cricket after 2019 and also Headingley being a venue for the ECB t20 competition. At one time this would have been a near certainty but now I am not so sure. Does the Board have a plan B for the use of the modernised stadium if they do not get these staging rights? No clue from the letter.
I don't think I can support plans that I don't really understand because they haven't been properly explained, so will probably abstain.
It ll be interesting to see how many people turn up for the EGM on such a peculiar day.
I would imagine it will be decided on postal votes but how many people do they need for the meeting to be quorate...?
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