SAINTS FINALISE FUNDING PACKAGE AHEAD OF STADIUM HANDOVER

[josie andrews]

ST. Helens RFC have put in place a £3million convertible bond and a £3million private debt facility ahead of the completion of the purchase of the new stadium, scheduled by the end of this month. They have also converted £850,000 in existing directors' loans into new shares.

Chairman Eamonn McManus stated that £3.3m would be used as payment of the final instalment of the purchase consideration for the 999 year lease of the new stadium (and stamp duty payable on it), £2million on the fit out cost of the stadium and the balance as working capital.

The Club is directly responsible for the cost of the fit out and other works on the new stadium such as kitchens, bars, kiosks, shop and furniture, additional to the purchase of the stadium in its present form.

They have appointed local company, Paragon Construction, to carry out these additional works, which will be completed in readiness for the new season.

McManus added that this final financing package was a remarkable achievement in the current financial climate and a reflection of the commitment of the board of directors to the Club.

He added: "The funding will facilitate a transformation in the Club's balance sheet and financial position. The value of the new stadium will significantly strengthen the asset value of the business and put us in a strong position in terms of prospective profitability after the very difficult commercial environment which we historically experienced at Knowsley Road and, more recently, at Widnes.

"We intend to refinance further in the medium term by way of conversion of the existing convertible facility into new shares and/or a further private placement of new shares.

"Any residual balance would be funded by way of debt, but we aim to minimise this whereby it is readily serviced and paid down from the operations of the new stadium.

"The Club currently has no bank debt. The shareholders' funds of the Club will be significantly strengthened in the year ahead and the Club placed on a very strong financial footing for the future. Most importantly, it facilitates the completion and opening of the best purpose built rugby stadium, of either code, in the country.

"This will be a massive boost for the Club, the town, and the game of rugby league. We have every right to be proud of our achievements."

McManus paid particular thanks to fellow director Mike Coleman, who has supported this interim financing.

He stated: "I am particularly thankful to my colleague Mike Coleman. Mike was born and educated in St. Helens and is a devoted and lifelong Saints fan. He has been resident in Singapore for nearly 30 years and is a highly successful and respected commodities hedge fund manager.

"He is committed to the Club and we are fortunate indeed to have such a supportive director who has been instrumental in making the final important stages of this 10 year project work."

http://www.saintsrlfc.com/news/page/1340?

[over the hill]

or to put in in plain english: we are in financial meltdown and cant afford to pay for the stadium, so ive got some of my rich mates to get us out of the doo-dah

[DaveO]

or to put in in plain english: we are in financial meltdown and cant afford to pay for the stadium, so ive got some of my rich mates to get us out of the doo-dah

Yes and no. McManus has definitely relied on directors to put the cash up but by the sounds of it they have given him the cash so they are not in financial meltdown any more.

There would only be a problem if no one was willing to take up the shares on offer that have been issued to cover pay costs and some of the debt.

They will end up with some debt be he says that is serviceable from income and will be paid down over time from the profits at the new place. There is nothing strange about that.

The only concern would be if they didn't make as much as they expect from the new stadium.

[Kittwazzer]

Thing is Dave, it will be all theirs. All income generated from the Stadium will go to the club. Unlike our situation where all we get is ticket money AND we have to pay rent!

[DaveO]

Thing is Dave, it will be all theirs. All income generated from the Stadium will go to the club. Unlike our situation where all we get is ticket money AND we have to pay rent!

And they have to pay for the upkeep of the stadium.

Warrington own theirs and in 2010 when they got to Wembley (and we didn't) which earns a club a lot of revenue (much more than the GF) they made a £200K profit on a £6m turnover v our £100K on a £5.5m turnover.

So even with their own stadium they aren't turning over much more than we are even in a Wembley year for them.

Apparently they out-sold us on merchandise as well (Wembley influence again maybe) so there is plenty of scope for us to match them even though we don't own the ground.

[over the hill]

or to put in in plain english: we are in financial meltdown and cant afford to pay for the stadium, so ive got some of my rich mates to get us out of the doo-dah

Yes and no. McManus has definitely relied on directors to put the cash up but by the sounds of it they have given him the cash so they are not in financial meltdown any more.

There would only be a problem if no one was willing to take up the shares on offer that have been issued to cover pay costs and some of the debt.

They will end up with some debt be he says that is serviceable from income and will be paid down over time from the profits at the new place. There is nothing strange about that.

The only concern would be if they didn't make as much as they expect from the new stadium.

i a little o.t.t i agree ,but this is the second time he has converted debt into shares. i just wonder how many times he can do this before the shares become so diluted that they are almost worthless?

[DaveO]

i a little o.t.t i agree ,but this is the second time he has converted debt into shares. i just wonder how many times he can do this before the shares become so diluted that they are almost worthless?

I did wonder about that myself. He seems to think the only reason they were loss making and in debt was because of Knowsley Road and while the new ground will generate income once the costs have been taken away it won't be a huge money spinner.

They already got all the takings from food and beverage at KR I think, the club does not get the gate money from any play off semi finals staged at the new ground.

They are going to have to increase their crowds and do other stuff otherwise they will be back at square one.

[Kittwazzer]

Those shares are practically worthless from day one. There is no open market for them and they will generate no income. Its little more than an interest-free, undated loan from wealthy people. Probably a tax write off!