Dubai International to make bid for Liverpool FC

[dawmdt]

[ATTACH]629[/ATTACH]

fair enough I couldn't be arsed to load Excel

[Imy]

Don't know if this has been posted. Taken from the Echo today

http://www.liverpoolecho.co.uk/liver...0252-20379031/

The Milkman has posted that on a number of threads including this one ( a few pages back)

[Slinky Skills]

The Milkman has posted that on a number of threads including this one ( a few pages back)

Cheers dude, haven't checked it you see. Nice one!

[spiceboy]

sad thing is that we were all crying out for investment a couple of years ago, mainly so rafa would have the extra money to splash on a world class player or two like Torres - (rather than the usual Kuyt/Cisse/Crouch/Voronin/Morientes) - which we know is what will get us closer to #19

now the club is going from having £40 million in debt to anywhere from £300-$500 million debt imposed on us if not directly then indirectly through interest payments etc.

DIC aren't here to save us, at the end of the day if they are buying this club for £500 million then they think they can sell for £1 billion a few years down the road. The only way that is going to happen is if they increase revenue streams by raping the club and fans with increased ticket prices/payperview/naming rights (The Coca-Cola Kop anyone?) etc. In the end the fans are paying for this little merry-go-round among fabulously wealthy people.

Who wins out of this? Not us. David Moores did alright though, £170-odd million burning a hole in his wallet.

Can't help thinking that we might have been better off going a different route - shared new stadium with the bluenoses? - steve morgan investing a chunk of cash for a share of the company? Hindsight is 20/20 obviously but as a fan it just makes me sad to think how ballsed up this thing is.

[baz87]

You forget that as you make payments your balance reduces and thus the amount of interest you pay is reduced...

My calculation on £350mm 25 years @ 8% is £32.4mm pa

On £175mm 25 years @ 8% is £16.2mm pa

Of course the interest will constantly reduce but its not likely to be drastically reduced over the ~4 year period (untill the stadium is built and we make some cash) in which the Yanks will have to subsidize us.

Not sure how you got to those figures, are they interest only? Even then i get £28m and £14m for the interest.

[jayjay]

Fed reserve has slashed interest rate by 3/4 of a point

That could be bad news imo

May not have any effect on re-financing a GBP loan in UK.

[dawmdt]

Of course the interest will constantly reduce but its not likely to be drastically reduced over the ~4 year period (untill the stadium is built and we make some cash) in which the Yanks will have to subsidize us.

Not sure how you got to those figures, are they interest only? Even then i get £28m and £14m for the interest.

It's the same as a mortgage calculation (or indeed any interest+principle loan repayment with a consistent repayment amount). Your calculation basically said "I borrowed 350mm, 8% interest a year, therefore interest per year is 28mm"... that's only true for an interest-only repayment. With a repayment method your year 1 repayment is mostly interest but a little but of the principle as well. Which means your year 2 payment is slightly less interest and a bit more of the principle... and so on until your year 25 repayment is mostly principle and a little bit of interest based on what was left owing.

The annual repayments calculated by a bank take all this into account so you always pay the same amount every year (or month for most people on their mortgage) but how that repayment is split between principle and interest changes over the life of the mortgage. Using the 350mm as an example:

Years - Balance
5 - 323mm
10 - 283mm
15 - 223mm
20 - 134mm
25 - 0

The figure on the right is how much of the 350mm you still owe after that number of years. You only pay interest on the balance not what you originally borrowed.

[Whelan5]

You forget that as you make payments your balance reduces and thus the amount of interest you pay is reduced...

My calculation on £350mm 25 years @ 8% is £32.4mm pa

On £175mm 25 years @ 8% is £16.2mm pa

Can't see any way that the rate involved will be anywhere near 8%, more likely to be around 6-6.5%, depending on the level of security of course.

[Tee]

Today has been a very quiet day on the takeover front compared to the frenzy in here yesterday...

Come on Rashid, Tom is there any more info?

D-Bag..... what a classic...

[dawmdt]

May not have any effect on re-financing a GBP loan in UK.

Assuming they have to pay for that with their US dollars, they now have to put in another 1% to counter for the weakening of the dollar against the pound that happened since that announcement. 1% is a lot when you're talking about millions :P

[dawmdt]

Can't see any way that the rate involved will be anywhere near 8%, more likely to be around 6-6.5%, depending on the level of security of course.

hard to say, the corporate financiers and actuaries I'm sure will have lots of ways of calculating the risk and an interest rate was just using 8% as an example

[disco]

Putting debt on the club doesnt increase its value though

Hicks' valuation is based on future earnings when the stadium is built and all the debt is paid off until then its nowhere near realtistic

I didn't say it would, I was basing it on future earnings once stadium is built etc.

[Exiled_red]

Can't see any way that the rate involved will be anywhere near 8%, more likely to be around 6-6.5%, depending on the level of security of course.

Even at a rate of 6% to pay back interest and initial capital on £350m loan over 25 years repayments would be ~£28m a year

Also I can see new stadium costing more than people are saying

[CAD]

I'm not sure they have the cash or willingness to make it across the finish line

No way can the club shoulder the burden of a £30-40 million loan and have an additional loan needed for a revenue stream that is 4 or 5 years away

They will have to pump in cash almost certainly to keep the club afloat, definitely if the club fails to qualify for the Champions League

IF we are to absorb takeover costs funds will be needed to be injected otherwise I cant see us competing for 4th place nevermind higher

If they opt to refinance then they will have gone through the different scenarios and, in their assessment, found that they have the cash to carry us though until the stadium is in place. These guys a hardcore and they will take the gamble (which it is of course) if the numbers and the expected value when the stadium is in place adds up.

In other words they will make funds available if the chose to stay long term. They are perfectly aware that they need to fund the squad. Everybody can see that it's a necessity to survieve and stay in top 4. It will almost certainly never be the kind of money needed to win the PL unless the youngsters come through in a way we never had imagined. Most of us here can probably agree on that much.

Hicks believe that the club will be worth around 800 to 1 billion when the stadium is in place and he thinks he can fund it and DIC will have to pay extra to get him out right now. It might cost him a bit to take us there but the upside when the stadium is in place will make it more than worth his while. Let's say that he will have to pay 150mill£ in interest over 4 years. If the expected value holds up it's still good business as far as I can see, right?

Hicks postulates there is an upside of around 3 to 400mill£ in 5 years time. He wants DIC to pay now for the acquisition of that upside if they want in now.

Imho of course.

[baz87]

It's the same as a mortgage calculation (or indeed any interest+principle loan repayment with a consistent repayment amount). Your calculation basically said "I borrowed 350mm, 8% interest a year, therefore interest per year is 28mm"... that's only true for an interest-only repayment. With a repayment method your year 1 repayment is mostly interest but a little but of the principle as well. Which means your year 2 payment is slightly less interest and a bit more of the principle... and so on until your year 25 repayment is mostly principle and a little bit of interest based on what was left owing.

The annual repayments calculated by a bank take all this into account so you always pay the same amount every year (or month for most people on their mortgage) but how that repayment is split between principle and interest changes over the life of the mortgage. Using the 350mm as an example:

Years - Balance
5 - 323mm
10 - 283mm
15 - 223mm
20 - 134mm
25 - 0

The figure on the right is how much of the 350mm you still owe after that number of years. You only pay interest on the balance not what you originally borrowed.

Yea i know the method and like i said it won't make much difference over the next 4 years, just wasn't sure on the actual figures. I'll use a mortgage calculator rather than my head next time.