Tom and Scott loan Tigers money

[TigerFeetSteve]

No arguing with your cash-flow point, but I doubt that the interest payments are contingent on LFC being back in profit. If anything they will delay it.

True they won't be, but as shareholders they would be hurting themselves by repaying if the club cannot afford it, yes it means the P&L column doesn't show a profit for longer but it would be worse if the loan came from elsewhere and they demanded payment when we're still struggling...

[MurphysLaw]

[quote=TigerFeetSteve post_id=767881 time=1613743072 user_id=34255]
[quote=MurphysLaw post_id=767874 time=1613738337 user_id=3365]
No arguing with your cash-flow point, but I doubt that the interest payments are contingent on LFC being back in profit. If anything they will delay it.
[/quote]

True they won't be, but as shareholders they would be hurting themselves by repaying if the club cannot afford it, yes it means the P&L column doesn't show a profit for longer but it would be worse if the loan came from elsewhere and they demanded payment when we're still struggling...
[/quote]

Well, there is no transparency as to the terms of the loan and when interest is due. If you listen to the RL Rugby podcast, it is described as a debenture of up to £3m coming from two Channel Island companies, and it is managed by Sport England. SE is the body handling the government bailout monies. Apparently, the govt. loan rate is 2%. It seems as if this is effectively a 'bridging loan', and normally these are short-term loans which are repaid, with interest, quite quickly.

[bageo]

This seems a "reasonable" interest rate. I've seen rates ranging from 0% (rare) to 20-25% (when accounted for properly not necessarily headline rates but various discount to par tricks) on directors lending LSE or AIM listed companies money. These all seem to get them 'fair' judgement from advisors.

Fair play and thanks to both of them for doing this, yes they are protecting their own investments but also the club as a whole.

[TigerFeetSteve]

https://www.leicestertigers.com/news/st ... ve-forward


I see we are now in a pretty good position financially. To open with this statement

"Leicester Tigers have secured the club’s financial future beyond Covid-19 thanks to a combination of increased investment, bank support, Government assistance and the loyalty of the club’s extensive fanbase."

That's a bold and encouraging claim, especially based on the fact this is made at a time after the government has released its roadmap out of lockdown!

[ourla]

https://www.leicestertigers.com/news/st ... ve-forward


I see we are now in a pretty good position financially. To open with this statement

"Leicester Tigers have secured the club’s financial future beyond Covid-19 thanks to a combination of increased investment, bank support, Government assistance and the loyalty of the club’s extensive fanbase."

That's a bold and encouraging claim, especially based on the fact this is made at a time after the government has released its roadmap out of lockdown!

It may be bold but it's also very welcome.

[MurphysLaw]

There is also speculation that in the Budget tomorrow, the Government backed Support Winter Survival Package, which Tigers look to have utilised, will be extended into the Summer. It was set up last November, when it was envisaged that spectators would be returning by 1 April.
It is mostly in the form of Govt.-backed loans, but the terms of the first package were commercially beneficial - a 10-year term (with a 2-year holiday) and then 8 years at 2%.
Potentially, more good news, if it is extended.

Details of the first scheme administered by sport England here.....https://www.sportengland.org/news/more- ... al-package

[mightymouse]

Whilst it is good that these backers have put money in to tide the club over the worst effects of Covid, it also now makes sense why they stopped the ongoing payments of season ticket holders and shovelled it into next seasons payments for actual tickets.
Clearly they could not have continued to take donations from us free of charge, or indeed gifted, whilst charging the club themselvesfor a mere “loan”.. That is why it is still possible to donate, as someone here pointed out, but it was a more difficult option, stuck at the bottom of the page.
I don’t want to be too chippy about it because hopefully they have the best interests of the club at heart but given that Peter Tom got 29million for Bradstone, if memory serves correct, one would have thought the loan could have been at a shade lower rate given current rates or even a more philanthropic Zero?!

[aslongaswebeatsaints]

These certainly are important loans. Cash flow is king for any company to survive. And in business terms 5% is quite reasonable, especially if it’s bridging loan (less so if longer term). I also have no issue with business men doing business but let’s not confuse this with hyperbole about them being somehow philanthropic or altruistically acting primarily in the interest of the club. Why not 0%? Why not new equity? It wasn’t that long ago that many fans of lesser financial means were donating, for no interest or shareholding.

[johnthegriff]

Even very wealthy individuals are unlikely to have millions of pounds sitting doing nothing their capital is earning for them possibly turning over a few times a year making profits and creating jobs, to loan to the Tigers they perhaps have to borrow from a source paying interest their selves, the difference in interest rates is quite likely little more than a handling and administration cost for the companies actually making the loans.

[MurphysLaw]

[quote=johnthegriff post_id=769904 time=1614783783 user_id=7213]
Even very wealthy individuals are unlikely to have millions of pounds sitting doing nothing their capital is earning for them possibly turning over a few times a year making profits and creating jobs, to loan to the Tigers they perhaps have to borrow from a source paying interest their selves, the difference in interest rates is quite likely little more than a handling and administration cost for the companies actually making the loans.
[/quote]

I understand that the loan to LFC plc has been made by two Channel Island-registered investment companies, each controlled by the directors in question.