Hard to know what to make of this, but it's a story that won't go away. Richard Murray is an honourable man and I do not believe he would mislead anyone intentionally. However, if we owe £6m and are unable to borrow more, then cash-flow becomes a major problem and you have to stay one step ahead which may mean realising assets to keep the club afloat. If we are unable to do this in a timely manner or our outgoings continue to outstrip revenues, then Administration becomes unavoidable.
News of a hardening attitude from Charlton's bankers is not new, so why are we worrying? The answer might be because we have revealed that we need to cut £10m-£13m from next year's expenses to breakeven. When you are struggling with £6m of debt, then it's hard to see how we are going to make the adjustments necessary without some significant new money. The fire-sale during the Summer saw the most saleable players sold, and we are now looking at the bottom of the barrel and they aren't going to recoup anything like the sums we need to avoid adding to our overall level of debt. So, unless the Directors have a viable plan to manage the ongoing debt, the Administration is only a matter of time. The issue then is all about timing and if it's going to happen in the next 12 months, then it would be best before 25th March when we can take the points penalty during this relegation season.
It would also mark the final fall from grace in this catastrophic season which has promised so much (pre-season, Zabeel etc) and has seen just about everything that could go wrong, do so spectacularly.
Dave - I am confident that the £6m debt is basically the outstanding mortgage on the North Stand, and that is repayabele over time, not immediately. The Board did say at the AGM that turnover will be reduced by between £10m - £13m next year but the implication was that that was in hand already, and that most (though not all) had already been realised (since the account year ended). I certainly hope so, and feel that to go into Adminstration, with Richard Murray and the Board losing the significant sums that they have put into the club (not withstanding the Bond issue which has them as a creditor!) is not going to happen easily...and certainly not yet.
ReplyDeleteIll informed, scare mongering drivel!
ReplyDeleteYou have no idea how the £6M debt is constituted nor when it may be due to be repaid.
Administration is only remotely likely if the club has bills due now and no funds to pay them. Cash continues to flow into the club via all the usual channels and Murray clearly states his and his fellow directors' continuing support.
As for cutting costs the club doesn't need to lose many players on Pardew type contracts if Christensen's is anything to go by: £260k pa for a kid he never picked?! We dread to think how much some of the experienced or competent players must be on! You don't need many on £20k+/week (Weaver, Zheng, Pards, Forch, Ambrose none of whom will be missed) to leave and the cost level subsides very quickly, add add in a couple of transfer fees. Doesn't take much clear thinking or wit to realise there's very little off the field to worry about.
Of course as an entertainment spectacle and a shadow of the club we knew so recently the whole thing is a travesty.
Ill-informed drivel it may prove to be, but the fact is that our bankers (of many years) are obviously concerned enough about our debt (and when it falls due) to refuse to encourage it. I suspect they know more about it than You or Me, and they obviously think Administration is a serious risk to their loan. Let us hope the Board have robust and far-sighted plans covering our finances (I'll bet HSBC closing our overdraft wasn't predicted).
ReplyDeletePedro - I understand the facts as you put them but you have to query why we have had our overdraft facililty withdrawn and the possible implications of that. No-one sets out to go into Administration. You simply become a victim of circumstance and we look increasingly like victims. The overdraft facility may have been withdrawn to limit HSBC's exposure in the event we do go into Administration and perhaps it will be relaxed after 25th March assuming we haven't? Dave.
ReplyDeleteIn a worst case scenario - what's the advantage of going into administration this season? Wouldn't we simply take a points hit this season and NEXT SEASON - just like Leeds did? Surely the League aren't that dumb that they would let clubs play that game?
ReplyDeleteAC - I think that's why they have a cut-off of 25th March, working on the premise that most clubs would not want a points deduction with seven games to go. If you go into Administration early, you get the points deduction this season and not next.
ReplyDelete