That's right, allamhouse said to all of our other creditors at the time "yes we know hull city AFC owes you money. Although we are buying the club we will not pay the creditors of the the club, but we will show in our filed accounts that we have. Despite guarantees being shown separately in company accounts we wont bother showing that we still owe you money so you have no way of showing that the club owes you money, you don't mind do you?". That's how all businesses do it!
It doesnt allways make sense to pay off Debt. The Allams have 400 odd million in assets (their company) Someone said they are estimated to make a profit of around 100 million this year in that business. That is a gain of 25% of their net worth. If that 25% is larger than the interest on the loan as I am sure it is then it wouldnt make sense to pay off the debt in one lump some. Ie they will have more money at the end of the day carrying that debt then they would if they paid it off. They can probably even do stuff like righting off the debt payments as losses to the company meaning that the debt would actually decrease the company taxes. The point being is that there isnt a giant conspiracy to the fact that they still owe money.
If they hadn't paid off the other creditors they would be showing as a creditor, whether it is a short or long term creditor. A guaranteed debt would normally move from being an unsecured to secured debt - the only charges I have seen registered are allamhouse's securing a charge on all of the clubs property (worth **** all) against their paying off of the debts
If the Allams want out they have to sell the club, the club isn't worth very much therefore nobody will buy it. If they just leave the club to rot then they will not get their money back either. Therefore they are stuck with the club until it is successful which may or may not happen.
The £100 million on the sports village would of been financed partially by mortgaging the KC Stadium which was why they wanted to buy it off the council. This new stadium that has been talked about will not happen either as where is he going to get the money from. The KC cost £40 odd million and that was in 2002, I would guess that you would get very little change out of £100 mill now. A large part of their fortune will be tied up in Allam Marine and I can not see them borrowing against that to fund the football club, don't even think it is allowed anyway.So NO I don't think they must have £5 mill to spend on transfers.
I am sure that if we go up the Allams will be able to find someone to invest in the club, thereby reducing their investment and providing a pot to get the players we will need. But I would not think they have the ready cash to fund much more this window.
I would have thought the £100+ million for the sports village/ new stadium would have been financed by mortgaging the new sports village/stadium its self and not the KC Stadium. That’s how it normally works they would negotiate a mortgage/loans which would be released as the work progressed, at the end the Allams would own a new stadium with a large mortgage As far as I know capital investment is not restricted under the fair play rules
We have plenty of money available to be able to make a few more signings, provided we can find the players.
The Allams put the money into Allamhouse. Allamhouse transferred the money to Hull City. Hull City paid the debts. There are no guarantees mentioned in the accounts. Maybe guarantees were given temporarily to enable cash to be obtained.
Of course it guarantees very little if you buy people with bad character or management them badly. If you are a good manager and second in the league then spending money can make promotion a lot more likely. Spending less than £10m now on the right players would go a very long way to improving our chances of promotion. We would recoup a lot more than that next season if we did go up. Then there would be pressure to do the same again. This is football. Look at the teams who get relegated. It is frightening what has happened to a lot of them. Some clubs have stayed up having spent very little money. Nobody can say one way is right but I think it's better to make sure you get in the Premier League than waste a good opportunity.
I'm worth nothing like the Allams but I am in a similar position in that the majority of my wealth is in property. Say if I could borrow and spend 100th of my net worth to have a much better chance of getting revenue next year of 20 times that? OK, there would be a lot more expenses but it still seems a reasonable risk.
If they had wanted to do that they wouldn't have chosen Hull City when they did. They would have bought them after administration or paid a lot less to buy another club.
At last someone with a little financial nouse instead of the financial pygmy blowhards on here..... Let's see how the Allams make their exit and under what conditions, shall we? I'm still smarting from the David Llloyd double backhander where he separated HCFC from Boothferry Park. If only he'd been as nifty on the tennis court......
Perhaps the procedure for terminating discussions involving a particular individual in future is to artificially complicate the situation by unnecessarily elongating the selections from our vocabulary so that the conversation takes the same trajectory as an aeroplane.
