Wasps 22 Discussion Threads

[dandigirl] 08/8/2022 09:41

Surely the heading of this thread should be changed or a new one started.

[barondene] 07/8/2022 15:35

hxxps://www.therugbypaper.co.uk/latest-news/360089/financial-woes-forcewasps-to-halt-recruitment/#respond

[mistt] 06/8/2022 23:35

Doubtful that they'd be litigation, though Wasps may have to refund an amount to CCFC. I'd guess they'd factored in that possibility when they took the cash for the Commonwealth game without keeping the obligation and agreement to relay a new pitch. Does suggest at cash flow issues, perhaps.

[pusb] 06/8/2022 21:32

Coventry City’s first match of the season has been postponed because of the state of the pitch which Wasps had given assurances would be maintained. Indeed, a new pitch was supposed to have been relaid before this season, but didn’t happen. Local belief is that this may have been linked with concern about Wasps underlying financial position. It seems that the football club will hold Wasps to account for failing to provide an adequate playing surface, so could be more litigation and costs incurred. All helpful (not) when seeking refinancing.

[barondene] 05/8/2022 20:38

It does if the guarantees are called or WH has to support any funding

[grownupinvestor] 05/8/2022 18:45

None of this makes any difference to the bondholders.

Our security is the lease on the stadium itself. What that's worth is another matter but the day to day ups and downs of the company doesn't affect it.

[dehuminiser] 05/8/2022 17:57

It’s becoming one catastrophe over another. The pitch is now looking as if it’s not even able to host the football club as it’s a danger to player safety. Sisu will most certainly be demanding significant compensation and it also looks like another midweek game is at risk. Rumours are no one would relay the pitch without up front payments due to the state of wasps finances

[grahamg8] 05/8/2022 17:11

Any proposal from Wasps will need to satisfy bond holders on three points.
1 Is there adequate security, in particular what is the current value of the ground.
2 Is there a believable business plan that can generate sufficient income to pay the interest as it arises.
3 What is the exit route for repaying the bonds in x years time.

Test 1 might pass, but I have serious doubts that Wasps can satisfy 2 and 3. Another business is going to have to get involved or all the assets are going to be forfeited by Wasps.

[pusb] 05/8/2022 13:23

Cc2014 - where n earth will they find the income to pay those levels of interest?

[cc2014] 05/8/2022 09:09

#769

What I'm suggesting is that bondholders should regain the option to sell/hold or buy bonds. The price would float to whatever the market feels is appropriate.

I can see why you don't like my 20p. Substitute 30p, 40p, 50p or whatever you think the bonds are really worth but whatever it is it isn't 100p


I'm afraid Wasps have really screwed up here. What they should have done is come to the market 9 months before the maturity date and rolled the bond. I suggest they could probably have got away with 8.5% and most bondholders who are by now retail investors would probably have been happy with that.

Where we are now is that they have defaulted on the bond, aren't communicating well with bondholders and are paying a coupon (if they pay it) at 6.5% well below what the current commercial rate would be.

I'd suggest a suitable replacement coupon would be in excess of 20% given their default, the lack of accounts for Arena Coventry (which are well past the deadline and they've had to step in to stop the company being struck off some time ago yet still haven't filed accounts).

Despite all this I suspect current retail bondholders who aren't on average that "sophisticated" would still support rolling of the bond at say 9.5%, because they have little knowledge of what high yield bond rates are or what remedies they have on the default. Some won't but there would be others who would subscribe for the first time.


However, regardless of this suggesting that the bonds are going to get repaid at par is to be in denial. If the stadium was really great security for the debt HSBC would have done the refinancing ages ago. And that hasn't happenned and isn't happening.


Your best hope is that some new party comes along and buys Wasps and who also has £35m lying around to re-pay bondholders. There again where such a party to exist they would likely want to make bondholders take a haircut as part of the deal

[barondene] 04/8/2022 21:44

@jonnyhatesrap perhaps one way to allay Bondholders fears is to release a the valuation put to HSBC?

WF could also explain why the anticipated consortium deal has fallen through

[jonnyhatesrap] 04/8/2022 20:47

@cc2014 so you are suggesting existing investors sell at 20p in the pound?? Let’s be clear that the bonds are secured and whilst the bonds continue to get paid interest at atleast 6.5%, there is no crystallised loss for anyone. Having security over amongst other things the stadium is pretty good collateral for £35m. Whilst the trustee may be inactive whilst refinancing proposals are credible, a trustee cannot do nothing in circumstances where it would be unreasonable to do nothing - the trustee has inherent discretion to enforce, without indemnities and without investors giving instructions. That’s the way all bond deals are structured. So whilst US Bank may not be held to be grossly negligent in current circumstances, that won’t be the case if any of the secured assets are at risk or there is likelihood that noteholders will suffer a loss without enforcement. If the trustee is grossly negligent, it will face liabilities towards investors it represents. At the moment the trustee is safe in not doing anything without instruction as there is no obvious loss to bondholders in the pipeline. Wasps are clearly hiding a valuation commissioned for HSBC, which probably shows plenty of coverage over and above £35m.

[cesareborgia] 04/8/2022 17:43

If Wasps Finance plc has indeed been trading while insolvent for some time do the directors actions both prior to the insolvency, at the point the insolvency happened and since then mean that they have been acting unlawfully? If that were the case were they not aware of this? If they were aware of it , could they be accused of fraud? If they were not aware of it could they be accused of incompetence? Either way should they be allowed to continue as directors? Is this a matter for the F C A?

[mjl4212] 04/8/2022 17:34

@l2s
Thanks , I did send a secure message to ii & received the following reply

'Thank you for your secure message.
I can confirm that you are not the only client chasing up the WASPS bond. We share your frustration with the delay in the matter and as soon as we have an update into what is happening, we will let our clients know of this.'

so at least ii are on alert.

[barondene] 04/8/2022 16:08

@mmoule

If you believe there is an insolvent situation have you taken any IP advice on an no win no fee basis?

[barondene] 04/8/2022 12:07

@mmoule

Remember the Bond Issuer is WASPS FINANCE Ltd, at this time that is the default company

Until a call is made on the guarantee parties and get no success I think that is where it stops

The Trustee would appear to be wanting this not to happen and thus limit any fall out


I also think this is part of WASPS HOLDINGS strategy in trying to raise the local authority funding. Saying it is a WF problem until shown otherwise.

[cc2014] 04/8/2022 11:22

I have no position, I'm just trying to help.

The evidence is that the bonds were delisted a couple of months ago, but there does not seem to be a 100% clear statement on who is doing what to get them relisted or what is required. Or what is the barrier to getting them delisted.

Sure the Trustee has asked Wasps to get them relisted, but that's all. It's not the same as enforcing it or actioning it.


I will step back again now. I have no wish to get involved in any long detailed discussion.

GLA.

[mmoule] 04/8/2022 11:13

CC2014 'unless you think that the statement is a lie. Why should it be?'
I am sure that Issuer may be trying to get the bonds relisted. But in my experience the Stock Exchange likes to list solvent entities with sets of recent signed accounts. A not unreasonable position.

I am pretty sure Wasps must be insolvent and the last set of signed accounts I can see is dated 30th June 2021. I don't think relisting will be easy

[l2s] 04/8/2022 10:59

CC2014 - From the latest statement concerning the bonds "In the meantime,
the Issuer will continue to seek to have the Bonds reinstated on the London Stock Exchange." I'm not sure why you feel that we should be looking to "force the Trustee" to do anything unless you think that the statement is a lie. Why should it be?

[barondene] 04/8/2022 10:54

@pusb If you are relying on the Sky Blues forum for totally accurate information I suggest to tread with caution

Recent comments disagree from the "Sale" posting to Ohare's injury that has gone from fake to financial disaster for the football club

However, there is some agreement that the Times article (and the lazy regurging by the Coventry Live) goes back to a comment by someone who it is claimed to be close to the Club. It was on the lines of the club having to sell players for income and they understood SISU was to make some form of statement near the end of July. Somehow these seem to have been cojoined and given to the Times who have made up a story.

The speculation is to either hide the WASPs dilema or boost the value of The Arena

If you also read the forum it also refers to WASPs approaching the Alexander Stadium with a potential view to moving. Something they have not denied !

Referring to Coventry Telegraph - check back on their non reporting of the Bonds situation but leap in with anything negative for SISU

[cc2014] 04/8/2022 09:59

May I suggest that the best solution for everyone is to get the bonds re-listed.

If that were to happen existing bondholders have the option whether to buy, sell or hold.


I expect the bonds would come back at somewhere around 20p once the market stabilises.
This would probaby produce enough sellers that a vulture would arrive, scoop up 25% of the bonds at prices up to 25p and then force the Trustee to action the default. i.e. the sale of the stadium. Possibly then the vulture might be interested in taking a haircut of 50% if Richardson can find that from somewhere as this might be quicker/easier/less risky that forcing through the sale of the stadium.


I am not sure whether 25% of bondholders are required to force the Trustee to enforce Wasps to relist the bond. I suggest someone might start forming a list anyway of known shareholders and their holdings to see how much power you have.

[l2s] 04/8/2022 09:52

mjl4212 - My experience with Interactive Investor is that they do pass on details of information gleaned from RNS messages once they have sorted out what the impact is on them and their clients. It may take a few days therefore but a secure message to them will produce an explanation of what is going on. I suspect the problem they have at the moment though is that the last two RNS were not issued under the EPIC code WAS1 but just under Wasps Finance (as by that time the bond had been delisted).
I am assuming that I need to watch developments myself in the first instance and to that end keep an eye on but also I am reasonably reassured by the fact that the various statements are also published on the Wasps Bonds site hxxps://www.wasps.co.uk/your-club/wasps-bonds/ albeit it may take a couple of days for them to appear there also.

[grahamg8] 04/8/2022 07:35

I can't really envisage accepting an offer from Wasps that didn't involve sale of the ground lease. The new owner eg Coventry City FC would need to be reputable and solvent. There should be a way to reset the bonds with a longer end date with interest and eventually repayment coming from the new lease owner. This would allow the Wasps businesses to remain as tenants, the bond holders get their money back, the new owner gets use of the ground on a no cash spent basis.

[mjl4212] 04/8/2022 00:02

mmoule - Apparently there was also a consent solicitation process in October 2020 when Wasps wanted to remove some restrictive covenants.

I was a bondholder then & I didn't hear anything either directly or via my broker (Interactive Investor [ii]). I only found out in May this year after the original repayment date was missed, so I'm not expecting to hear anything this time. It seems that it's just a paper exercise so Wasps can say they have asked for responses.
As mentioned before, they really do the bare minimum at the latest possible date in terms of communications with bond-holders.

However, this time I'm going to try to respond if I can & I'm sure many other bondholders will be also be pro-active in putting their views rather than remaining silent.

Next step is to ask my broker tomorrow what they know.