#kroenkeout: Page 27 - The Arsenal discussion forum and community: One More in the Tolly

#kroenkeout

Anzac

Qwiss! wrote:
There is no 120m from KSE, they decided the club couldn't pay the loan back in a year so now the money is owed to KSE instead.

So if there is no 120m from KSE did they take out another loan like last summer?

Anzac

Claudius wrote:
The nice thing about a shareholder’s loan is that he is last in line should anything happen to the club. He is subordinate to the banks etc. It’s a helpful arrangement given the unclear cash flow situation, and the risk he bears will explain the big delta in interest rates from 0,5 to 8% between the two loans. So he’s given the club time and financial flexibility. Otherwise, we would’ve had to go to a bank to pick it up. Instead a bank can pick it up off the larger Kroenke balance sheet.

Depends on how they put the 120m together = last summer they took out a loan for the club to pay back to them, and KSE then pays the original lender.

Qwiss

Claudius wrote:
The nice thing about a shareholder’s loan is that he is last in line should anything happen to the club. He is subordinate to the banks etc. It’s a helpful arrangement given the unclear cash flow situation, and the risk he bears will explain the big delta in interest rates from 0,5 to 8% between the two loans. So he’s given the club time and financial flexibility. Otherwise, we would’ve had to go to a bank to pick it up. Instead a bank can pick it up off the larger Kroenke balance sheet.

Where did you hear the new interest rate is 8%?

Claudius

Cant remember. Might’ve been AST meet or something.

Qwiss

That'd be pretty horrible if true. To go from a 0.5% loan to an 8% loan just seems like a sneaky way to extract money from the club. Lets not forget he could have forked out to cover the costs of running his asset instead of taking that loan from the BoE.

This from the pricks who told Ek "we don't need the money".

goon

8% is huge, are we sure about that figure?

Also from what I read the loan isn't from KSE, it's from a bank, and given how low interest rates are right now I'd be amazed if it were anywhere near that figure.

Qwiss

TBH I don't think they'd make the rate public when they don't have to. Although that just makes me suspicious too. I just don't trust these guys.

Meatwad

i don't think anyone but those with moderate risk are paying 8% these days.

Anzac

goon wrote:
8% is huge, are we sure about that figure?

Also from what I read the loan isn't from KSE, it's from a bank, and given how low interest rates are right now I'd be amazed if it were anywhere near that figure.

Saw this too = they've repeated what they did last summer - took out a loan, gave the money to the club for a specific purpose, and the club repays KSE who repays the bank. As such it means we have an additional 300m(?) of loan debt or thereabouts.

Claudius

They’re piling up debt but improving our short term cash flow situation.

Anzac

Claudius wrote:
They’re piling up debt but improving our short term cash flow situation.

Agreed, however IMO it still prioritises the business operating costs ahead of the football.

As I said earlier I'd rather have taken the loan last summer the use to purge the squad and get most of the rebuild done.
As for the Govt loan I'd have rather rolled the loan over until March, and again used the 120m to finish the rebuild in regards to pushing on top4.
I've said it plenty of times there is a golden opportunity to get maximum bang for buck in a depressed market, and yet again we're looking a gift horse in the mouth.

EDIT - Imagine what we could have done with 300m to spend on the football operation = players and staff. The 184m loan last summer not only freed up the 30m held in Cash Reserves, but also saves us about 20m in loan payments each year, however all the reductions in operating costs don't amount to enough to benefit the football operations.
IMO we're still being penny wise pound foolish.

Claudius

Sorry, I don’t understand. How does rolling the loan vs refinancing affect the rebuild? If anything it should help it because it means we don’t have to worry about raising £100m in the next year while remodelling our squad. This is a good thing given our short term troubles

Anzac

Claudius wrote:
Sorry, I don’t understand. How does rolling the loan vs refinancing affect the rebuild? If anything it should help it because it means we don’t have to worry about raising £100m in the next year while remodelling our squad. This is a good thing given our short term troubles

Depends on what you think KSE are going to do in regards to providing additional funds to rebuild or not.

My bet is that they will say they have provided the club / invested 300m over the last 12 months to enable the club to cover COVID debt, and to invest any revenues towards the team = we can spend what we raise or have available to spend. Even though they have not invested a cent of their own money I do not see KSE providing any additional funds towards the rebuild either out of their own pocket or via another loan.

I'd rather be paying back on loans that will directly help the club regain top4/UCL revenues, than the reality whereby 300m debt goes towards enabling us to free up an additional 20m per year from our non existent COVID cash flow.

Yet again we're putting the process/club financial structures ahead of the football. The football operations are being used to support the club, and not the other way around = no wonder this club is going down the toilet.

Klaus

Claudius wrote:
Sorry, I don’t understand. How does rolling the loan vs refinancing affect the rebuild? If anything it should help it because it means we don’t have to worry about raising £100m in the next year while remodelling our squad. This is a good thing given our short term troubles

Well if he's selling the club in the next couple of years then we owe him money instead of the bank. I reckon he's just seeing an opportunity to make money and hedge himself further for the future.

Anzac

So this week we've had both DB10 and PV4 speak out separately in joining TH14 in favour of Ek.

Pressure/expectation should be on KSE to respond to keep supporters placated if there are more protests at our last game of this season, and even more so with the sacking of another long time servant of the club. If they are true to form I don't think it would be anything more than platitudes if at all, and I'd be very surprised if anything real or of substance was forthcoming.

I wonder if Josh was thinking about the ESL when he said we should be excited for the future in his response to the "We care, do you" protests? In any event IMO KSE have failed in their response to date.

Don Pacifico

People keep talking about pressure on the KSE...I really don't see it. They're the majority owners and have showed zero signs of selling or concern for stakeholder discontent.

Anzac

Don Pacifico wrote:
People keep talking about pressure on the KSE...I really don't see it. They're the majority owners and have showed zero signs of selling or concern for stakeholder discontent.

And therein lies the problem.

Meatwad

Don Pacifico wrote:
People keep talking about pressure on the KSE...I really don't see it. They're the majority owners and have showed zero signs of selling or concern for stakeholder discontent.

yup. they need to actually be in fear of something in order to act: losing money or safety and security.

Claudius

There are rumours that there will be significant changes to the premier league’s commercial model in coming years. These were probably underway before ESL went live and will become even more pertinent now. In this context, Kroenke is unlikely to sell. Any buyer would acquire Arsenal at a discount relative to the potential impact of these changes. I wouldn’t sell if I was him.

Rohit

What changes Claude? Do you have any link please?

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