Wasps 22 Discussion Threads

[1bondinvestor] 11/11/2022 00:49

Unless specific figures have been quoted I presume that the reported agreement to sell the stadium at a knockdown price is speculation. If correct it would of course undermine our security. As a first step it may be prudent to remind the administrators of Wasps Holdings Ltd, Andrew Sheridan & Rajnesh Mittal of FRP of the valuations:
Prospectus in 2015 £48.5 million by Strutt & Parker.
in 2021 £51.4 million.
I understand that other valuations were conducted in 2017 & 2019 for £60m & £51m.

The point is that it should be construed as a warning shot if the sale price agreed is substantially less than valuation effectively depriving bondholders of achieving fair market value.

[bigfish1] 10/11/2022 15:17

Hi Fastcat, I have emailed you a reply to your question.

[l2s] 10/11/2022 15:16

Can someone explain to me how on 29 July the Issuer was happy to announce that they were "now working on the proposed Bond terms to be amended and will formally launch a consent solicitation process in August, once the proposed terms have been finalised" which presumably would have required contact with all the bondholders but now "In light of the number and, in cases, unidentifiable, nature of the Bondholders, we understand that it will not be practicable to pass an Extraordinary Resolution by way of a Written Resolution or Electronic Consent authorising the release of security"? The Issuer, who is a party to the latest letter to the Trustee, has access either directly or in conjunction and agreement with the Administrators to the list of Bondholders so this is nothing other than a deliberate attempt to force a cut price sale through at the expense of the Bondholders.
With or without the agreement of 90% of the Bondholders the Trustee must realise that this is totally unacceptable behaviour.

[fastcat99] 10/11/2022 15:03

"TBH, the cancellation of the proposed EGM some weeks ago was a disaster at the behest of some institutional investor" ???

Please ANYONE explain
- I never knew that an EGM was proposed ! by whom ?
And an institutional investor ?? if only !

[kb68] 10/11/2022 14:55

Hello, small bond holder (25000) reading with interest but not too much understanding. Will register if deemed the correct thing to do by your learned selves.

[pusb] 10/11/2022 14:21

The administrator asked bond holders for funds to market the arena: none were forthcoming. Apparently Ashley had a team at the arena on Tuesday doing “due diligence”, presumably checking the extent of the reported dilapidations, so the deal has probably only just been finalised taking those findings in to account. For the Trustee to act, he would need up front funding and indemnification. If that is received, the actions taken would be the same as those taken by the current administrator with no guarantee of a better outcome.

It probably is what it is, but further funding should come from the Wasps Holding sale and the P shares sale back to PRL which should provide some financial damage limitation. TBH, the cancellation of the proposed EGM some weeks ago was a disaster at the behest of some institutional investor.

[bondholder] 10/11/2022 13:35

At this stage I don't think the Trustee can help as he does not have indemnity and consent from enough holders. Not enough time left. I wonder if letters to the judge pointing out the lack of timely information would help. The assets are not perishable and therefore not clear that a fire sale is in the interests of the creditors.No marketing has taken place.If the offer is very low it might be advantageous for creditors to appoint a manager and draw the income.Given that the offer was made at least 10 days ago I see no reason for the deliberate withholding of information.

[ozzie_dog] 10/11/2022 12:46

I need to do that too, I have been a bit slow in registering myself as a bondholder, mainly because my holding is not very significant (170,000 being just under 0.5% of the bond). But if anyone thinks it would do any good for me to do so, please let me know what I need to do.

[waspie] 10/11/2022 12:23

Hi

Anyone know how I contact the trustees to declare I am a bondholder

cheers guys

[ozzie_dog] 10/11/2022 10:59

At first I thought that we were covered by the 4th paragraph of the notice, but then I noticed that it only states 'towards repayment', i.e not completely repaying the bond, how on earth can they get away this this?

In connection with the Administration Application, the Letter formally notifies the Trustee that an ancillary application(s) to the Court will be made to enable the Companies, acting by their joint administrators, to dispose of the Companies’ respective business and assets, including the Arena, as if they were not subject to security (subject to the proceeds after applicable costs being applied towards repayment of the liabilities which are secured on those assets (according to the applicable priority ranking))

[dehuminiser] 10/11/2022 10:32

It would appear the administrators of ACL have confirmed a preferred bid for wasps assets which do not include bond holders payback - trustees confirm they will not issue a challenge on the bid

[ozzie_dog] 10/11/2022 10:29

Thanks Bondholder, but I am hoping that someone will be able to explain in simple English what the possible implications of this means to us bondholders? Are we still in the position that fastcat99 posted below, or will this change things?

[fastcat99] 10/11/2022 10:25

Vae victis !
If there are ANY bondholders following this bulletin board who have not yet notified the Trustee of any (substantial) holdings, NOW IS THE TIME TO DO SO

DM me (though as I have a real work crisis this morning, also try bigfish1 )

[bondholder] 10/11/2022 10:05

2. a resolution notified to the Bondholders through the relevant clearing systems(s) given byway of electronic consents of holders of not less than 90 per cent. in nominal amount ofthe Bonds outstanding (being an "Electronic Consent"); and3. a resolution in writing signed by the holders of not less than 90 per cent. in nominal amountof the Bonds outstanding (being a "Written Resolution").In light of the number and, in cases, unidentifiable, nature of the Bondholders, we understand that it will not be practicable to pass an Extraordinary Resolution by way of a Written Resolution or Electronic Consent authorising the release of security. In addition, there remains insufficient time available between the granting of exclusivity to the Proposed Buyer and the time of the Hearing to convene a meeting of Bondholders in order to obtain an Extraordinary Resolution under option 1 above. In view of the above, we are writing to inform you that at the same time as inviting the Court at the Hearing to make administration orders in respect of the Companies and IEC, the directors of the Companies intend to seek a Court order under paragraph 13(1)(f) of Schedule B1 to the Insolvency Act 1986 (the "IA 1986") allowing the Companies (acting by their administrators) to sell their business and assets to the Proposed Buyer free and clear of the security interests comprised under the terms of the Security Deed. In the event that the Court is not minded to grant an order under paragraph 13(1) of Schedule B1 to the IA 1986, the Companies (acting by their administrators) will instead be seeking an immediate order to the same effect pursuant to paragraph 71 of Schedule B1 to the IA 1986. The Companies, and their proposed administrators, are currently of the view that progressing and implementing a sale to the Proposed Buyer represents the best outcome for creditors in the circumstances. In view of the process described above, we understand that it is extremely unlikely that the Trustee will receive instructions from Bondholders to either support or contest the proposed applications above. Should this be the case, and neither confirmation is forthcoming (as expected), we reserve the right to submit a copy of this letter to the Court in connection with the above applications. We anticipate that further documentation in connection with the above applications will be served on the Trustee before Friday this week. Kindly acknowledge receipt of this letter by return.Yours faithfullyArena Coventry Limited and Arena Coventry (2006) Limited

[bondholder] 10/11/2022 10:05

1Classification: ConfidentialU.S. Bank Trustees Limited Fifth Floor 125 Old Broad Street London EC2N 1AR By email only: Dear U.S. Bank Trustees LimitedWasps Finance PLC (the "Issuer")£35,000,000 6.50 per cent. Secured Bonds due 13 May 2022 (the "Bonds") of the IssuerArena Coventry Limited ("ACL) and Arena Coventry (2006) Limited ("ACL2006" and together with ACL, "the Companies")We write to you in your capacity as Trustee under the terms of (a) a trust deed dated 13 May 2015 and made between, the Issuer, Wasps Holdings Limited, the Companies and U.S. Bank Trustees Limited (the "Trust Deed") and (b) the security deed dated 13 May 2015 and made between the Issuer, Wasps Holdings Limited, the Companies, Elavon Financial Services Limited and U.S. Bank Trustees Limited (the "Security Deed").Capitalised terms used, but not defined, in this letter shall have the same meaning as given in the Trust Deed.As you will be aware, in light of the Group's financial difficulties, the Companies have recently been exploring a sale of some or all of their business and assets with certain interested parties. Those discussions led to the Companies entering into a period of exclusivity on 1 November 2022 with a preferred bidder (the "Proposed Buyer") who has made an offer to acquire all of the business and assets of the Companies' and IEC Experience Limited ("IEC"). On 1 November 2022 (and shortly prior to entering into that period of exclusivity), the directors of the Companies and IEC also issued applications for the appointment of administrators with the intention of completing a pre-packaged sale of their business and assets to the Proposed Buyer. Copies of the relevant applications were sent to the Trustee on 3 November 2022. The administration applications have been listed in the High Court of Justice on 17 November 2022 at 10:30am (the "Hearing").The terms of the Proposed Buyer's offer include a requirement that the Companies sell their business and assets free from all security interests, including those arising under the terms of the Security Deed. Given the value of the Proposed Buyer's purchase price, it is not anticipated that there will be sufficient proceeds from the sale to discharge all liabilities owing under the Bonds in full. Further communications regarding the transaction will be provided as soon as practicable, and in any event before the Hearing.We understand, that in order to be able to grant a release of any security under the terms of the Security Deed and Trust Deed in circumstances where all liabilities owing under the Bonds are not being repaid in full, the Trustee requires the consent of the Bondholders by way of an Extraordinary Resolution. We further understand that an Extraordinary Resolution can be passed by the Bondholders in this case in one of three ways:1. a resolution passed at a quorate meeting duly convened and held in accordance with theTrust Deed by a majority of at least 75 per cent. of the votes cast (we understand that atleast 21 days' notice (exclusive of the day on which the notice is given and of the day ofthe meeting) must be given to the Bondholders in advance of any such meeting);

[ozzie_dog] 10/11/2022 07:37

Has anyone got any idea of what sort of approximate timescales (both optimistic and pessimistic) that we are in?

[ozzie_dog] 10/11/2022 06:51

Thanks fastcat99, that puts us bondholders in a better position than I thought we were in.

[fastcat99] 09/11/2022 18:33

PS much of this chimes with grahamg8's post above, which I hadn't seen when I was writing.
But Points 6-8 plus my speculative conclusions remain an optimistic answer !

[fastcat99] 09/11/2022 18:25

Let's be pedantic about this (to make sure I have not misunderstood)

1. The administrator's official announcements are only to the effect that, having run an accelerated sales process, a PREFERRED buyer for ACL and Arena Coventry (2006) has been identified,
2. Even the notion that a 'figure' has actually been agreed, let alone the amount, is still a matter for speculation
- I didn't hear/see anything direct from Simon Gilbert (a broadcast yesterday??), but the Coventry Telegraph report won't bear any stronger interpretation than just that.
3. That speculation 'confirms' that Mike Ashley is the preferred buyer, and that he claims to have had a "8-fig sum" accepted for the above-named companies
4. The Telegraph and indeed Ashley himself may have spoken of a bid having been agreed for the ARENA itself, but this is in fact a considerable simplification
5. In the process of settlement of Wasps Finance affairs, the bondholders still can take possession (once Trustee agrees to act) of the lease on the Arena - which of course is the main asset of the two Arena Companies
6. Ashley is perfectly aware of this - to get effective use of the Arena, he either has to contribute to the liquidation of Wasps Finance by redeeming the Bond on its existing terms; or by prolonging the terms of the Bond (new timescale, coupon etc); or by convincing the Bondholders (NOT Trustee) to accept redemption at terms less than 100% (what is colloquially known as haircut). Obviously, EITHER of the latter two options can only take effect with the BHs' agreement - by particularly stringent majorities (Point 12a of Section 12);
7. Even after all that, outvoted Bondholders could feasibly argue that the terms offered were so patently unacceptable that the Administrators' accelerated sales process had been faulty, and further bidders (NEP for instance) for the Arena Lease should still be solicited.
[8. I do see provision in Points 6f) and g) for ACL2006 (ie hypothetically Ashley) to buy bonds in any number, price, OR means (ie NOT necessarily on the open market) but these bonds are specifically deprived of their voting rights, so I don't think that would serve his purposes.]

In sum, a contested process seems both complicated and uncertain; Bondholders are in a weak position when they are passive, scattered individuals, but they are still a force to be reckoned with their consent MUST be obtained.

I don't think a man like Mike Ashley is likely to spend even "chickenfeed" on something that doesn't give him reasonable certainty. Many people surmise that his real target is to get CCFC on the cheap; and he surely cannot do that without firm title to the Arena.

Moreover, the next interest payment on the Bonds is due this weekend - and if there is now a potential new source of finance, that's something which the Trustee MUST take into account when considering whether (finally!!) to "enforce the terms of the Transaction Documents".

[grahamg8] 09/11/2022 17:09

I'm intrigued about what is likely to happen in the next few episodes of this soap. The next interest payment is due on 15 November, that is next Tuesday. Wasps Finance are the issuer and will have no funds to pay. Indeed they never have had any funds but have relied on finance flowing from ACL and Wasps Holdings. But with the sale of the Stadium business and Wasps Rugby some funds should become available. My prediction is therefore that Wasps Finance will give notice of intention to appoint an administrator (and may do so a couple of times more). I think I'm right that interest will continue to accrue until an Administrator is appointed. If the total proceeds from Wasps Rugby, P shares, and ACL are enough to pay the interest and principal then all well and good. But if not what happens?

Can Mike Ashley buy the stadium lease and operating business with the mortgage in place? In theory I think he can. Then the Wasps Finance Administrator/Bond Trustee will be negotiating with him over new terms or a haircut for immediate repayment. I hope for the best but fear the latter. Ashley is renowned as an astute and tough businessman. If he thinks he can get away with a partial payment of the Bonds I think he will give it a go.

[ozzie_dog] 09/11/2022 15:37

Since the announcement that the figure for the CBS arena has been agreed and that it is an '8 figure sum' I have been thinking about why did they say that, when it doesn't mean anything. I suspect that they have phrased it that way, so it left hope with the bondholders that it would cover the bond. That way they can do the deal, and it will be too late for us bondholders to get organised and do something about it. Of course I hope that I am wrong, but I have prepared myself for bad news, and I only have a little hope that it turns out well for us bond holders.

It's a bit of a mess regarding the P shares, no doubt that will drag on for a while before we find out if we can claw anything back from those.

[grahamg8] 02/11/2022 20:19

fastcat as you say we await a decision from PRL on what they decide will happen. But that is not the same as saying the P shares have no value. They do. If PRL buy them then the money goes to the administrators for distribution to us and other creditors.

[fastcat99] 02/11/2022 18:03

So that's the legalistic way of rebutting all speculation about whether the P shares are "ours" (or indeed anyone else's) "to sell":
- they AREN'T, as long as Premier League Rugby is content to leave matters as they currently stand
= they are completely unavailable to Administrators, Trustee or Bondholders, CERTAINLY until the PRL/new Wasps issues have been completely thrashed out, and PRL has announced details about future obligations

[fastcat99] 02/11/2022 17:53

Quotes from Trustee's Note to Bondholders today

The Trustee reminds Bondholders that the administrators now have management and control of WHL, with wide powers to do all things necessary or expedient for the management of WHL’s affairs, business and property. As officers of the Court and licenced insolvency practitioners, the administrators have professional and statutory duties while in office and must carry out the administrator’s functions in the interest of creditors as a whole. The administrators must perform those functions as quickly and efficiently as is reasonably practicable. The administrators will be required to exercise their powers and functions towards the overall achievement of the objective of the administration as set out in Schedule B1 to the Insolvency Act 1986, which currently appears to be to achieve a better result for the company’s creditors as a whole than would be likely if WHL was wound up (without first being in administration). If the administrators decide they are unable to achieve this purpose, they will need to realise property in order to make distributions to one or more secured or preferential creditors.
The administrators of WHL have provided the following update:
“The Joint Administrators advise that in respect of WHL, the shareholders in PRL have not yet exercised their pre-emption right in respect of the P share. For the avoidance of doubt the P share is not within the Joint Administrators gift to sell.”

[grahamg8] 02/11/2022 17:36

Good news on progress with the Arena. However I wanted to touch base on the P shares. About which there seems to be a great deal of confusion. My understanding is that all RU Premiership clubs own P shares. This gives them a share of central income from TV and advertising on top of locally generated income from pies, pints and bums on seats.
The P shares and everything else the clubs own are assets of the clubs.

Now in administration it is the administrators job to maximise the value of these assets. Both Worcester and Wasps have argued that they should be allowed to stay in the Premiership - a Premiership club is going to be worth more than a Championship club. Next they tried to argue that they should be allowed to keep the P shares so that the club and P shares could be sold as a package. But the RFU seems determined to reduce the number of clubs, and one of the conditions of being relegated is that the P shares can only be kept for 1 year which would allow for immediate promotion. This creates a false market, made even worse by reducing the number of Premiership clubs, as there is likely to be a forced seller and only one purchaser at most being any newly promoted club. To solve this problem it seems there is a formula for valuing the shares. This has happened before in 2012 when Exeter bought Leeds P shares for a reputed £5m.

The conditions of ownership of the P shares and their purchase and sale are clouded in mystery. But RFU seem to be able to buy as well(in accordance with a pricing formula?). What I am pretty sure can't happen is that RFU simply take the shares off Wasps without proper compensation.

The P shares may well be worth more than the rugby club itself. Whatever money is raised either as a joint or separate sale, the proceeds will be used to pay out to the creditors of which the Bondholders are near the front of the queue.