FORUMS > Bradford Bulls > Council Loan? |
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| Quote: monkey belly "i need the help of an old sage like relic/fa or adeybull, with business knowledge
is this similar to emperors new clothes.
you get a soft loan from the council £200k then buy a rugby club from administrator for £150k, you then own this and decide to issue yourself shares. you then ask loyal fans to then invest in the club by buying shares (are those voting shares or just shares with no rights) the income received then pays off the soft loan and you still own the whole thing without spending anything.
is this how business works, your opinion would be appreciated.'"
You would be surprised what you can buy without actually having any "money" and similarly people wouls be very shocked if they all went to the bank at the same time to take their "money" out. That is the wonder of the banking system that it works because people have trust in money that isn't really there. A bit of a diversion but your are right with the scenario you discribe if you can get a credit line youu don't need to actually put any £ of your own in. It was always thought that Al Fayad bought Harrods for £500m when he didn't have a dime.
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45_1302643626.jpg :d7dc4b20b2c2dd7b76ac6eac29d5604e_45.jpg |
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| You would presume so, although the wording - and the eligibility - would need to be very carefully drafted, I think?
However, OK's wording (as quoted, anyway) is pretty ambiguousthe T&A reportrl it seems clear he is intending to retain control. The wording reads to me like he is not seeking to raise capital for the club, but instead to sell some of his own holding, but without more detail we can only speculate.
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| 'Former Sports Minister Gerry Sutcliffe, honorary chairman of Mr Khan’s OK Bulls Ltd, said the club would be valued before shares were made available and the move would bring in investment'.
Then thiis suggests they are raising capital for the club but agreed it's not very clear.
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| Indeed its not. Because the wording could mean, e.g.:
a - we value the club, to put a price on new shares in the company, so we can then offer out those shares to bring in new capital; or, just as easily:
b - we value the club, as a basis for bringing in investment from other businesses or high-net-worth individuals, where we will need to calculate how much % of the club say a £100k investment will buy you; and at the same time so OK can determine how many of his own shares he can sell to supporters whilst still retaining a majority holding.
- or any one of a range of other possible interpretations.
To me, the wording could be quite deliberate: shares will be "made available", not "issued". "The move would bring in investment", not "the issue of those shares will bring more capital into the club". But, who knows? How much is lost in the translation from utterer via hack to page? How much was said just as general, informal comments in layman's speak, to try and be helpful, rather than said with a specific objective in mind?
But now the genie is out of the bottle, I do think we need a few more specifics to avoid excessive - and quite possibly wilde-of-the-mark - speculation?
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| As with anything like this it's hard to know what is going on when the press reports can get easily confused. I hope the T&A send a hack with some knowledge about this sort of thing (if such a person exists at Hall Ings).
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| Quote: Bullseye "As with anything like this it's hard to know what is going on when the press reports can get easily confused. I hope the T&A send a hack with some knowledge about this sort of thing (if such a person exists at Hall Ings).'"
That is asking an awful lot Bullseye.
But we all assume that OK actually knows exactly what coulld happen here himself - with new investors and the potential issues involved in selling shares to the fans. I guess he has been in business mainly on his own, or his families account in the past - so running a multi-share holder company could well be new ground for him as well.
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