QPR's Ongoing 10% per-annum ABC Loan & QPR's Efforts to Deal with it

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Clearly, the ABC Loan is QPR's great Ten Million Pound Cloud hanging over the club:

[Much has been written and speculated about about QPR's 10 million loan at 10% annual interest, which they received from the mysterious Panama-based "ABC" group. Until a couple of months ago, Derby County had their own 15 million pound loan from ABC.
More re ABC Loan at Julia Hill's "Boardroom Blues" http://www.boardroomblues.co.uk/
and Tracy Stent & others QPR1st http://www.qpr1st.co.uk
(and obvious thanks to LSA & QPR1st QPR Rivals & QPRnet for holding these meetings or Q&As]. [A couple of the major press articles re QPR & Derby and the ABC Loan can be read at http://qprreport.blogspot.com/2006/04/abc-qpr-derby-county-looking-back.html. And also at Derby Count siteshttp://www.therams.co.uk/ and http://www.ramstrust.org/

Below some of the comments by QPR's Current Chairman about QPR are going to deal with this loan.

As posted by Steve Russell on LSA's News section almost two years ago:,
LSA News - 15th October 2004
Gianni Paladini Wants A Showdown - Marylebone and Paddington MercuryThere was a very interesting article by Paul Warburton in last week's Marylebone and Paddington Mercury. Gianni Paladini said that he would like a showdown with the previous Board to find out why they took out the £10m loan with ABC. The loan costs £1m a year in interest alone and when Gianni invested around £600,000 in May for 22.1% of company shares, instead of being welcomed, he was snubbed by members of the previous regime ! The former football agent believes that former Chairman, Nick Blackburn, Chief Executive, David Davies and plc Chairman, Ross Jones would have little to do with him.
He said, "I wasn't welcome the minute after I got involved with the Club. I tried but couldn't get answers about the finances of the Club, especially when I would ask David Davies.
For a long time it was like banging my head on the wall. It appears that Bill Power would get phone calls asking him what I was doing at the Club and yet I had brought a large sum of money and was keen to see what I was getting for my investment"
He alleges that Rangers were two weeks away from a second bout of administration which would carry a immediate fine of 10 points !
"We faced a bill from the Tax and the VAT man of around £2m, we hadn't got it and had no way of getting it at the time, quite frankly we were at the wall. I made a plea to my friend Antonio Caliendo in Monte Carlo to help. He had contacts going back 30 years. I told him if he couldn't help, I would lose all my money. I've never lost money in football and he must have thought it was shrewd on my behalf and we set about getting the money.
They persuaded other Monte Carlo businessmen to raise the money and they bought the company name Barnaby Holdings especially for that purpose.
Gianni said, " We've paid the immediate bill but why did we have to borrow £10m ? We didn't have a £10m debt The loan was agreed at 8% and at the last minute -not the last hour -the details of the loan was changed to 10% - take it or leave it ! The previous Board claimed that the Football League forced them to do it but I've spoken to the League and they say that's not true, but I want to know the truth" Steve Russell
http://www.qpr-lsa.co.uk/04sepoct.html


October 2005 - Ron Norris/QPRNet Interview with Paladini QPRnet.com: Is it true that we are behind on our payments to many suppliers?
Paladini: I tried to renegotiate the ABC loan and then some rubbish goes in the paper saying I was this and I was that, saying I was robbing the club and then they say we are going to go into liquidation. If while this is all going on you go to the bank to borrow ten million pounds that doesn’t do you any favours. I got an email from the bank and they didn’t want to take it any further because of these rumours. Never mind, we’ll carry on and eventually we’ll get rid of the ABC loan. http://qprnet.com/interviews/paladini.shtml

December 2005 Q&A Regarding the loan - it appears to me very easy and without access to the financial side at QPR, I guess I can only make assumptions. Are there negotiations taking place with solicitors, lenders and ABC in order to either re-negotiate with ABC or a high street lender? Paladini: We are arranging a new loan with the Lloyds TSB. The directors will give their personal guarantee on the loan. We hope to get an interest rate between 5.75% to 6%. Depending on the final interest rate we will save between £400-425k per year. http://www.qpr.premiumtv.co.uk/page/QA/0,,10373,00.html

May 2, 2006 Clive Whittingham QPR Rivals Q&A with Paladini: Q: "Five years until the ABC loan expires - should we be worried yet? Paladini It is my mission to stop that. I didn't create that situation and it's a difficult one to deal with but while I'm here it is my mission to get rid of it. The more people who see we're doing a good job the better the chance is that they'll help us out and work with us on this. We were very close to doing a deal with the Lloyds bank but then there was all that stuff in the Evening Standard and they pulled out, didn't want to know any more. When I took over here, the VAT man, the tax man, the creditors - none of them trusted QPR, and we've had to catch up with payments. People were queuing up for money here in September. We have to put forward a united front and look like a secure option for people to come and help us out. We're working hard on this, Antonio is in Milan today talking to banks and potential lenders. I am confident we'll be rid of the loan within the five years. Whatever happens I'm sure we'll do it. QPR Rivals wrote: "Later at the QPR1st AGM the trust put forward the idea of the fans trying to raise the money themselves over the next five years in return for the ground being signed over to the supporters. This ambitious plan was given support by Gianni Paladini who described it as a "fantastic idea." After the meeting had finished I spoke to, or rather listened to, Ross Jones' take on the loan. Jones maintains that with the football league breathing down our necks the deal was a good one for QPR; "You'd really struggle to find someone who'd lend you ten million pounds at anything less than ten percent. You may be able to get eight percent but time wasn't on our side. The football league wrote to us and said we would be expelled if we didn't find the funds to come out of administration - what would you have done? "We took out the ten million because that's what we needed to come out of administration, seven million of it went to creditors immediately. Nobody will lend you that kind of money at six or seven percent. It was a good deal for QPR at that time." Q: Do we even know who ABC Corporation are? Paladini No, no idea. They're based in Panama with a Swiss bank account I think but we just don't know. Ross Jones does though - "I know who's behind it all but I gave my word that I wouldn't reveal who it is so that's that. I'm a man of my word."http://queensparkrangers.rivals.net/default.asp?sid=925&p=2&stid=8410350

June 2006 Paladini Statement Paladini"...As I still get asked about the ABC loan I would like to tell the fans and shareholders that we are hoping to replace the ABC loan in the near future with a cheaper loan from a more reputable financial institution.What do we know about the ABC Corporation? Unfortunately very little, we have suspicions, but we can't prove who the controlling interest behind the ABC Corporation is. The ABC Corporation's lack of transparency means that the Board must question their motives and their attitude towards the club which is why the Board wish to refinance the ABC loan. We will be reviewing the legality of the ABC loan.http://www.qpr.premiumtv.co.uk/page/News/NewsDetail/0,,10373~837609,00.html

LSA - REPORTED STATEMENTS FROM LSA & QPR 1st
eting 8th September 2005
".....This Thursday GP is going to meet some bankers to try and borrow money at an interest rate of 6% in order to pay off ABC. If he is successful that would save QPR £400k a year..." http://www.qpr-lsa.co.uk/05setpoct.html


September 2005 QPR 1st 0 Minutes/Report from Meeting with Club/Board Thursday 15 th September 2005 - http://www.qpr1st.co.uk/main/trustclubmeetsep2005.htm ABC Loan – GG asked for some clarification regarding the ABC loan and the Board's thoughts regarding it and if whether there had been any recent news relating to the comments made by GP about the possibility of the renegotiating of it? GP responded by saying that he/they “are currently in negotiations with a top bank looking at the possibility of getting it renegotiated at a rate of 6.5%”. GG spoke about the early redemption penalties and asked if GP could give any hints as to the terms, conditions and how long a period we would be talking about regarding a possible renegotiated deal, but GP said he couldn't comment but hoped to have some good news soon. GP stated that he felt the extra 2% (i.e. from 8% to 10%) was the fault of Ross Jones who he understood agreed to the change of rate at the last hour. http://www.qpr1st.co.uk/main/trustclubmeetsep2005.htm


October 2005 - QPR1st Minutes/Report from Meeting with QPR Board reps Friday 21st October 2005
ABC loan
We asked the question if The ABC Corporation are connected with any of the Monaco consortiums or the investors behind them. GP and AC seemed to find this amusing and stated categorically that ABC and the Monaco groups are not the same!
GP and CP explained they had no more clue than us as to who was behind ABC. There is very little copy correspondence in the QPR offices in relation to the loan. CP advised that he did not know if any arrangement fee or commission was paid on the loan when originally set up. CP also stated that at the beginning of each financial year on 1st June the figures showed a £1million loss. It is hoped that ABC may accept early repayment of the loan, which will be re financed with a more traditional identifiable lender.
We asked GP if there were any update on this, and if so would he be able to tell us with which banks the club are hoping to renegotiate with. GP stated that so far there have been talks with two banks, one of which would offer an interest rate of 6.5, whilst the other would offer 7%. He is unable to inform us at the time being as to which banks they have been talking to but CP said if they could get the loan renegotiated with a traditional institution, they would feel safer. He also said that on such a renegotiated deal, £300,000 per year in interest charges could be saved which could be directed to repaying the £10 million originally borrowed.
When asked about any fee charges for early repayment by ABC and CP said it would be negotiable.
And what about any new bank, what kind of security would they look at in order to protect their money? It was stated that any bank would secure a charge on the assets i.e. the ground.
And is there any truth in the rumour that the club have been behind in its payments to the ABC Corporation we asked? Absolutely not replied GP.
http://www.qpr1st.co.uk/documents/GandAminutes.doc


LSA- November 2005
"... LSA reps asked whether there was any progress on renegotiating the loan. GP said that talks are underway with a UK bank to try and get them to take over the loan at a rate of 6.5% instead of the 10% that we currently pay. We are also in negotiations with ABC Corporation to try and reduce the lump sum we will have to pay them if the bank takes over the loan.
GP said: “The loan was not the immediate problem – the biggest problem here was getting running costs back under control and avoiding administration, which we have done.” He said the club has saved £160k a year, for example, just by not replacing Mark Devlin and Mark Austin.
Despite that, our outgoings are still phenomenal. GP said that in the last 18 months our income has been £18m but this has all been spent. In one month alone we paid out £1.2m on bills, “but we still have money in the bank”.
A Member asked whether we are doing anything about the way the ABC loan was taken out. GP said there is nothing we can do, so it is not worth pursuing."
http://www.qpr-lsa.co.uk/05novdec.html

March 17, 2006 - QPR 1st Report QPR Holdings Ltd AGM
Whilst talking about loans, CP went on to mention the ABC loan, saying that the interest was 10% on it for 5 years, after 5 years (Spring of next year) there is a break clause, however the clause is not to our benefit because if we cannot find a way out of the loan, then ABC can up the interest should they so wish.
Antonio Caliendo then expressed a wish to speak and with the translation skills of Paolo Mina, we learnt that according to AC, the Board wishes to reach an agreement with ABC before the 5 year period and that they hope to present better results next year in order to hopefully be able to do this..... http://www.qpr1st.co.uk/documents/AGM2006.doc

QPR 1st AGM April 2006
"...When asked to elaborate a little upon the groups, GP started to become a tad defensive, saying that himself and AC had put so much into the club, and then mentioned that at that very time, whilst he cannot say too much, AC was currently away in Milan attempting to see if he could find a solution to being able to refinance the ABC loan, saying “I realise what you Tracy, and others are talking about today about paying off the loan, but we need to try to look at ways of refinancing it, and getting it away from ABC when the 5-year term is up”. He then went onto mention that whilst he appreciated people’s concern, he wanted to give an example of how gossip on messageboards does have the potential to scupper possible commercial deals, citing how they had apparently verbally agreed with a High Street bank a renegotiation of the loan, only for them to pull out due to lack of confidence following rumours of the company going into administration. http://www.qpr1st.co.uk/documents/QPR1stAGM06DOC.doc