Correct. What improves our cash flow, or more to the point our cash flow management, is the owner making sure he (or at least those he delegates to) are crystal clear on what needs to be paid when, and then ensuring there is sufficient cash within the clubs accounts at the right time to pay for things as they fall due. I'm pretty sure that is what will have been given attention these past weeks as a result of the **** up. However, cash flow management isn't something that the club would make an announcement on in the way they have done with the share issue /debt write off. Quite different things.
The interest rate on the loans are unusually high for shareholder loans too. It’s the same rate as what the Allams were charging and everyone accused them of asset-stripping and raking it in on the interest. Most owners charge less than 1% interest on shareholder loans. Acun is charging City 5%.
Maybe there are good reasons for the scepticism, but I do think that Acun's virtue in writing off £14.5m owed to him is being downplayed here.
Right here, right now we are discussing (not potential future events) we do not have any more operating cash / money than we did 1 month ago. It’s like Monopoly money
Yes.. I've said this a few times. It means we have less debt. It's a good thing. It's not as good as it could have been, but that doesn't mean it's meaningless. You were responding to me challenging Jim on calling it meaningless.
in terms off the month to month operating of the club & paying the bills it is pretty much meaningless
If he’s done it to reduce the asking price when selling the club, I’ll give him credit. In fact, I’ve already said as much. I want him out and if he’s making that an easier outcome then it’s a positive to me. Right now, it hasn’t changed our financial situation much. It hasn’t improved our cash flow as it’s not a cash injection.
Yes Other than the fact that we've both acknowledged that it gives us more headroom to draw down debt - i.e. cash - to service those commitments.
It's definitely a good thing and nobody can argue that, his reasons for doing it, well that's the £14.5m question
Syd is right, since debt is partially written off, you are financially in a stronger position to get another credit, since liabilities are reduced. So it can generate more cash and more debt together. And probably less interest payment can create more cash/breathing space, though I am not sure we were paying anything to Acun, payments might be starting future date which never realized.
any lenders/investors would want agreements in place so as to make no difference at all whether they converted owner's loans into equity or not!
It makes no difference at all. When a deal to sell the club is being negotiated people treat owner's loans the same as shareholders funds.
You're right in the sense that Acun would need to re-finance the debt in order to make the ultimate third party debt facility payable by Hull City, but he could re-organise the debt so that he sells the club still owing him the money.
We have no idea as to whether the cash situation has changed. It's a totally different topic. However, bills continue to be paid, discretionary spending continues, salaries get paid, building for the future continues, etc etc.
It's always divide and conquer season on here. The views expressed in my posts are not necessarily mine.
