Ralph Krueger interviews (16/08/17)

The Mirror ... being positive about Saints? I thought I'd never see the day!!

 

Gao now owns 80% of the club, if he wants to change direction/sell everyone/do anything he can. Lets not kid ourselves here, he is in complete control over the future, lets just hope its for the best

 

Yes, but do remember that you've known about this for 5 minutes. Whereas Katharina and Ralph, for example, have known this chap for 16 months, and KL retains an interest. I'd go with their gut instincts and not be so fatalistic on this one.

 

So presumably we are still debt free and its Jisheng who is in debt for taking out a loan to buy us? Is if usual procedure for a loan or does he just not have much money?!

 

And remember that we are an asset...I would assume that makes Gao interested in our well being. We are in a rich league which brings in money, so there is no reason to load us with debt to the point of extinction. However, as an asset it is entirely possible that he may borrow against us in a sustainable way...remember Nicola took out a loan using our future PL earnings as collateral. That was the loan that KL took exception to and stepped in (so the rumour goes) and replaced it with a loan using her own assets as collateral (presumably at a better rate of interest).

Sadly few of us know what it is like to be stinking rich, but it sounds reasonable to take out a loan against unrealisable assets in order to make a cash purchase and get a deal over the line. As long as you can pay back a loan, where's the problem. I'm not saying everything is hunky dory....because how would I know, but I intend to worry when there is something to worry about. At the moment, our previous owner is happy enough to carry on owning a share of the company (at present valuation worth around 50 mill), so, unless she is really the devil incarnate who has fooled us for years, I presume all is financially above board.

That was longer than I thought it would be.

 

I'm not being fatalistic or expecting the worst or any of that. I am completely neutral to the deal as I know nothing about Gao. I have just seen people posting about how it is a "partnership" and Kat still has 20% with the view to sell that on if certain investment promises are met. I don't know any other partnership where one person (effectively) has no say, and if Kat was really bothered about the investment promises, and Gao adamant he was going to keep them, then why not sell him 49.9% initially and the rest when they were met?

 

Perhaps because Gao wasn't interested in such a deal and Katharina wanted/needed the money. As I mentioned before...perhaps she also wants to be free of the responsibility. Most employers are just responsible for their employees...if you own a football club you are responsible for the happiness of tens of thousands of fans. Nicola said that Markus just came along and enjoyed the game, whereas he was very stressed out. Katharina was more involved at board level. Her 20% holding represents her attachment to Saints because of her father...in her place I would find it very hard to walk away.

 

Quite correct, all the debt(liability) for this purchase is with Mr Gao.
This is common practise for such purchases. You don't get wealthy by spending your money

Scale the principle back to the more familiar world of the housing market and if you were lucky enough to win 150k whilst still earning a regular income and wanted a 150k house then you could buy the house outright and live a nice debt free life.
An investor would say, why don't you use that 150k to buy 4 houses via a mortgage and the rental income from 3 could cover the mortgage of the fourth.
If you're willing to take the risk then you could quadruple your money.

Gao will be taking a "salary" or a dividend out of the club which will help him with the repayments of the loans he used to acquire it.
Like Fran said above, it's not risk free for Gao or Southampton, but the risk should be manageable, even on the scale we're talking about.

 

I don't really see why he wouldn't be interested if he was 100% committed to investing whatever they have agreed upon as then he would get the club anyway. It is more likely that Kat wanted the money so sold more, which is fine it is her club after all.

 

Kat herself used the word "partnership" and being slightly non PC, most women will tell you that not every partnership is 50/50.

 

I would want to control a business if I was investing a large amount of money. It would be that and the probable fact that Katharina wanted to get out from under at Saints. The 20% just represents reluctance to let go completely...she isn't on the board so won't be involved in the day to day stuff.

 

All the noises they have made up to now have been good.......time will tell I guess......

 

It worth remembering that if Kat has no control, it means she has effectively left £40m of her money to be managed by Gao. I've got to think there is some trust there.

 

Bang on, whilst we all care passionately about our football club. She is the one who has the most to lose personally, should this relationship be ill judged.

 

Nicely worked out. Would you trust £100 or a £1000 of your hard earned to anybody.? No, of course not. It would be someone you have a good working relationship with. Hence I think we can trust Katharina not to have screwed up. And hence why someone who might be saying oo-er over the deal is simply someone saying oo-er, and nothing more.

 

Unless you oversold the product, then its kinda like leaving chips on the table.
Just saying........

 

She's the multi-billionnaire, in a bigger multi-billionnaire dynasty. Must be doing something right in terms of financial deals.

 

Hell yeah. But, £200m represents a big profit on her fathers investment, if this 20% went tits up, then its small fry. But, lets just focus on the here and now, this is going to work out just fine. I'm on board. toot toot

 

Would you be happy to potentiality lose some of the £40 million? I'd be gutted to lose £40.

 

I'd be gutted to lose 80% of the saints family full stop. I still don't understand the decision, but then, I grew up with the club, she fell into it, not in love with it.