"Mally" wrote:
The club have always had a bank charge in the accounts so it's not necesarily anything to get too concerned about. There's been a charge by HSBC since 2002. If this is an additional charge then it looks like the club potentially owes money to 2 banks. However if it's simply replacing the existing HSBC charge then all it suggests is that the club has switched its overdraft to another bank.
The HSBC charge was I think across the Firoka group, eminently sensible when Firoka was borrowing money to finance the construction of the Ozone, the hotels, Stadium, cinema, fitness, etc. If any one company was in trouble, the bank could get its money back from the others.
When WPL took over, they had to repay all debt to Firoka, leaving the club essentially with zero or little bank borrowings. I presume they also changed bankers. This then meant the HSBC charge could be released.
Up until recently, WPL have been funding the club (by loans from its shareholders). Very strong rumour has it that Lenagan won't lend anymore / has reduced the amount of losses he will fund each season.
So the club has been borrowing from Barclays. There has been an overdraft in the club's accounts for a while, but presumably this latest charge is a reaction to I guess:-
- the club is unable to repay the overdraft on demand
- the club has probably had to increase bank borrowings to keep the club going - any shortfall in funding of losses needs to be met somehow, and I can't imagine the club breaking even any time soon without a very good cup run or a decent transfer fee.
- the bank's risk team has decided that having an unsecured overdraft / loan ranking equally with other unsecured creditors is unacceptable.
- the bank want more security on top of any personal guarantees by directors (or anyone else) which may or may not exist as well.
Sorry if this is all a bit obvious, but I can never work out when Snakey is fishing for an answer which no-one wants to post because it means giving serious consideration to the current state of the club's finances / bring awkward matters into the open, or if he is genuinely asking the question and wants to know the real reason for the charge as opposed to my speculation above, or some other reason.