Wasps 22 Discussion Threads

[ozzie_dog] 26/10/2022 13:41

@ baraondebe, but that still means that there is probably enough equity if the P shares are included. If there was a shortfall, it could be minimal. But I wonder how long DR wants to kick the can down the road?

[barondene] 26/10/2022 12:19

The Strutt and Parker full report in the prospectus specifically states they have not carried out a defects survey. The subsequent valuations on the WASPs Bonds pages only give the summary pages.

One could. I suspect, assume the full reports are similarly worded unless the underlying value rose greatly to match the increasing upgrade costs

[fastcat99] 26/10/2022 11:27

@PUSB I couldn't agree more - why should bondholders pull irons out of the fire for Directors/Chief Executives/Holding Companies who have treated us with utter contempt for the last six months? I am beginning to feel quite irrationally vengeful - prepared to pay at least 5p in the £ for the satisfaction of inflicting the maximum damage.

BY THE WAY
- Vaughan in his post-administration interview with Coventry Telegraph (October 17) stated "We don't have a benefactor who puts money into the organisation" !!; since when ? how and exactly when did DR change role from Antonio to Shylock ?
- EVERY independent auditor's report since 2017 has included language to the following effect: "medium term forecasts show that Wasps Holdings Limited continues to be dependent on the financial support of its ultimate shareholder, Derek Richardson, with financial contributions needed to fund ongoing cash flow requirements and to meet bond covenants"; and the directors have responded "The directors of the company have obtained a letter of support from the ultimate shareholder outlining a continued commitment to the Group and are satisfied that existing ultimate shareholder support will continue to be forthcoming"

[ozzie_dog] 26/10/2022 11:03

hxxps://www.wasps.co.uk/media/8033/ricoh-arena-valuation-report-summary.pdf
The stadium was last valued at £52.4m in 2021, but there has been talk of circa £21m repairs needed, and the valuation does not mention these, but It actually cost a lot more to build:

hxxps://stadimax.com/portfolio-item/ricoh-arena-coventry-uk/#:~:text=Ricoh%20Arena%20in%20Coventry%20was,stadium%20design%20and%20commercial%20success.

Ricoh Arena in Coventry was the UK's first true multi-purpose venue, combining a football and rugby stadium with exhibition hall, indoor arena, multiple conference rooms, casino and 92-room hotel. With a build cost of £113,000,000, Ricoh arena represented a sea change in stadium design and commercial success.

So maybe repairs are factored in, but I suspect not, I would have expected the estimate to mention these, I have not read every part of the estimate in detail, but I would have also expected the repairs to be specifically excluded if they were not included.

I would have thought that it would be prudent to have the stadium valued again, previously it seems to have been valued every 2 years in March.

[pusb] 26/10/2022 10:16

The P share would be nearer £10m than £5m but need PRL to actually take the action. Even then, Wasps might challenge them. They only paid £21m for the stadium, to expect £30m in the circumstances may be ambitious. Maximising value realised by marketing is more likely to benefit DR than bondholders so why doesn’t he fund it.

[bondholder] 26/10/2022 07:58

"Ten-year lease signed by exam provider at the Coventry Building Society Arena | TheBusinessDesk.com" https://www.thebusinessdesk.com/westmidlands/news/2068559-ten-year-lease-signed-by-exam-provider-at-the-coventry-building-society-arenaI'm surprised that the administrators have no money despite the above, Grosvenor Casino lease, CCFC income, Hilton hotel, conference income, Coventry BS sponsorship etc etc

[bondholder] 25/10/2022 21:21

With the P shares raising 5m we only need around 30m. No guarantee that will be achieved but clearly NEC interested and probably Mike Ashley plus anyone else who pops up. The liquidation announcement will generate interest.

[pusb] 25/10/2022 19:36

I doubt the arena will obtain any where near £35m given the request to fund marketing. Marketing to whom, the world knows it’s available and not rushed to buy. The P shares are actually a better bet.

[barondene] 25/10/2022 16:36

In addition the Trustee should be actively looking to sell the Arena to raise the £35m for the bondholders again less their fees

The Trustee will argue he has no mandate to sell the Assets = he can demand WH to repay BondHolders which may start a process

However, it would seem he has information that shows him you are best waiting !

[barondene] 25/10/2022 16:30

If you are in any doubt as to the action you should take, you are recommended to seek your own advice immediately from your stockbroker, bank manager, solicitor, accountant or other financial adviser authorised under the Financial Services and Markets Act 2000 (if you are in the United Kingdom), or from another appropriately authorised independent financial adviser.



WASPS FINANCE PLC (the “Issuer”) Notice to the holders of
£35,000,000 6.50 PER CENT. SECURED BONDS due 13 May 2022 (the “Bonds”) of the Issuer (ISIN: XS1221940510; Common Code: 122194051)
THIS NOTICE IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION



We, U.S. Bank Trustees Limited, in our capacity as trustee in respect of the Bonds (the “Trustee”;)
refer to our previous notices dated 23 September 2022, 5 October 2022 and 19 October 2022.


In light of the current situation, the Group, their advisors and the potential administrators have requested that the Trustee communicate to the Bondholders that they are seeking additional funding to enable a robust marketing process to be undertaken, with a view to maximising the potential sale value of the assets and/or companies forming part of the Group and to maximise preservation of value of the Security securing the Bonds. The Trustee will not, nor is it required to, provide such funding in these circumstances. If any Bondholder or Bondholders is interested in entering into discussions with the Group, its advisors and the potential administrators with a view to providing such funding (including the quantum required) we would invite you to contact the Trustee at the below email address together with providing satisfactory proof of holding to us. Please note that Trustee is unable to amend the priority of payments set out in Clause 6 of the Trust Deed to allow such funding to take priority over the payments to the Bondholders (and the parties ranking above them) without the passing of an Extraordinary Resolution of the Bondholders given in accordance with the terms of the Trust Deed.

Whilst the Group, its advisors and the potential administrators are exploring all available options to secure additional funding to enable them to maximise value, they have confirmed to the Trustee that in the absence of receipt of additional funding in short order, it may not be possible to continue marketing the assets which form part of the Security. In such event, the statutory purpose of administration may not be capable of being achieved and the directors of Arena Coventry Limited (“ACL”) and/or Arena Coventry (2006) Limited (“ACL2006̶1;) may have no choice other than to apply to court for an order placing ACL and/or ACL2006 into compulsory liquidation.

The Event of Default and Potential Events of Default detailed in the Trustee’s previous notices remain outstanding and we remind Bondholders that, at the current time, the Trustee does not intend to take any steps to enforce the terms of the Transaction Documents, the Bonds and the Coupons unless so directed and indemnified and/or secured and/or pre-funded to its satisfaction.

In facilitating the above request, the Trustee is not able to advise Bondholders as to what course of action (if any) they may wish to take.

Capitalised terms used and not otherwise defined in this notice shall have meanings give to them in the prospectus dated 24 April 2015, which was issued by the Issuer in connection with the Bonds.

24 October 2022


U.S. BANK TRUSTEES LIMITED

Email: [e-mail]

[barondene] 25/10/2022 16:06

Mr Deep Pockets is usually savvy enough to keep his hands in them

The PRL have a clause where they can force the sale of a P Share but its open to appeal and can be drawn out.

[dandigirl] 25/10/2022 15:44

One prospective purchaser walked away because he could not get confirmation that the P share would be included. Final decision is with the Premier League who it is thought will jump at the chance to reduce the number of clubs. No solace to be had there, IMV.

WASPS did themselves no favours by involving themselves with the EXETER CHIEFS logo spat when it was none of their business. CHIEFS will not forget, I'm sure.

The position deteriorates daily. Players already moving elsewhere diminishing chances of revival.

Salvation is in the sale of the asset, hopefully to a Mr Deep Pockets who also wants to buy COVENTRY FC.

I fear the worst but hope for the best.

[pjrh] 25/10/2022 15:33

Again I am afraid the Trustee is not looking after the bondholders interests.
It is rumoured the Premier leagus is prepared to pay £9.5m to buy back the P shares and these should be sold with the monies ringfenced for the bondholders less any administration fees. In addition the Trustee should be actively looking to sell the Arena to raise the £35m for the bondholders again less their fees.
Why does the Arena need to be marketed? Anybody interested knows it is up for sale.

Why hasn't the Trustee arranged a meeting of bondholders to put the facts in front of us. All they ever do is behind their stock answer that "it is in the Prospectus"

[fastcat99] 25/10/2022 14:52

Where has "Wasps' ask" been published ? I suppose it was addressed to Bondholders, and platforms are sitting on the full text - as usual ?!

[bigfish1] 25/10/2022 13:40

Yes but ACL isn't in administration. DR appears to be threatening liquidation instead of administration. As I said, is this just an empty threat? I can't see any reason why ACL wouldn't go into administration.

[pusb] 25/10/2022 13:33

I would imagine Coventry Council would activate the lease forfeiture clause if there is no buyer deemed acceptable by the administrators.

[ozzie_dog] 25/10/2022 13:18

Wasps previously started that they would continue to pay interest every 6 months, but I can't really see them paying interest in November though, I imagine that they will say that was dependant upon a deal being struck.

[bigfish1] 25/10/2022 13:16

We are very much working in the dark with so many unknowns but I agree that the hold up is probably being caused by DR. Current offers for ACL and the buyback price of the P shares by the RFU may cover the bondholders debt and HMRC but probably leave nothing to cover DR massive loans to Wasps or anyone elses. Unless someone persuades me otherwise I think giving him more money would be madness. I would like to know how Coventry Council would respond to ACL being liquidated but I cannot understand why the administrators would not be able to sell ACL as a going concern. Is the letter just an attempt at manipulation/blackmail to try and recoup some of his losses?

[ozzie_dog] 25/10/2022 12:36

Thanks baraondene, regarding the slow pace of things, that's exactly how I see it, I think the hold up is because DR/Wasps are hanging on to see if anything can be salvaged with Wasps (which looks unlikely), but nevertheless they seem to be relying on hope rather than any realistic chance.

If the bond is in default, is there no mechanism in place to force a sale, even if an offer was made that covered the redemption of the bond?

[barondene] 25/10/2022 11:47

Ozzie

The short answer is :

WASPS Finance have not called on ACL to repay the loan despite various defaults

ACL is therefore being marketed as a going concern to achieve the best value - I assume all other liabilities are being met or not being pursued


The BH Trustee says he cannot act under his own initiative to recover the BH funds - so WF is currently under no pressure to do anything

A cynic's view

[pusb] 25/10/2022 11:37

Why should Wasps fail to pay back all monies owed and yet retain an asset worth nearly £10m?

[pusb] 25/10/2022 11:36

DRs influence is why the Trustee should be putting an administrator. No intention of getting aggressive or argumentative. P shares are an asset the proceeds of which were offered as security and the PRLs stance (to buy them back) is absolutely and entirely reasonable.

[ozzie_dog] 25/10/2022 11:30

@PUSB I am only trying to get my head around what is happening and why, but to answer your question DR cares about a wasp's revival and he is influencing the situation, and therefore possibly holding a potential sale up while he waits to see what happens with Wasps. I do care about the timing of the sale, and you should too.

I don't care that much about a Wasp's revival(although I would like to see it), but getting my investment back is my 100% goal. If you want to be aggressive and/or argumentative, don't bore the others with it on here, PM me.

[barondene] 25/10/2022 11:25

PUSB

There has to be a shortfall first

Bondholders only have a charge on any sale proceeds to top up funds

That is why ACL trying to avoid a Receivership which could reduce the Arena Valuation and they would call on the WASPS Receiver to sell. He would not have to sell at that time but then other guarantees kick in