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Monday, March 26, 2007

Approaching the Five Year Mark Since QPR's ABC Loan

With QPR's 10 year, 10 million pound "ABC Loan" coming up to the crucial "half-time" mark in May - at which point the 10% per annum interest rate can be raised - or the entire loan could be paid off (with a new loan). And over the weeks, months and years, the messageboards have repeatedly focused on the ABC Loan (and who precisely are the people behind it.

At a recent meeting between the Chairman and various fan group representatives, the subject came up: (As posted on the Official Site - and other sites)

3. Financial

3.1. What is the current financial state (including concerning debts) and financial plan of the club?
GP started off by saying that with regards to clearing bills £250,000 is required and that includes the fee for Deloitte and Touche
He spoke about a recent tax payment (£1.5m) and how tax accrues all the time at the rate of around £300k per month, but that we no longer have a backlog. We have the ABC loan for £10m (£1m per year interest) and said that the aim is to get rid of the ABC loan as by May the interest could by put up to 13% and so this needs to be cancelled urgently and to get a fresh one. He said that the board are working continually on this stating the ground will not be sold and that there will be no sale and leaseback. He went on to describe the running of QPR as “like a big house, we have to pay bills, big bills and sometimes we have to prioritise”. He stated that there things like security bills which amount to £50k per month to be paid and that cashflow is the biggest problem, saying that to keep this club alive we need the money to do so, money in the bank, commenting that we do not even have an overdraft facility with the bank.

When asked about directors loans he said that yes, we are all aware of the directors loans but that if we were to go bust they would lose their money, they have no guarantee on anything and so it is not in their interests for us to go bust or go into administration.

GP denied that there were any truth in the rumour about Paul Kemsley (Tottenham vice chair) taking over/refinancing the ABC loan, saying there was no truth in this whatsoever.

SD again raised some questions that had been flagged on one of the message board’s, the first in relation to the ABC loan, which was regarding the legal implications of it and if the board had looked into this? NDM said that basically when it comes to challenging the loan, losses have to be shown and it would be difficult to establish losses given the club did borrow £10m. It would have to be proved that the company could have borrowed £10m on better terms (e.g. lower interest). He also said even if it was possible to prove corruption there would be little/no chance of receiving damages. ..
Official Site
QPR.CO.UK invited fans to send in their questions for QPR Chairman Gianni Paladini to answer.
Are there negotiations taking place with solicitors, lenders and ABC in order to either re-negotiate with ABC or a high street lender?
John Hardman
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.

QPR RIVALS Clive Whittingham - Q&A with PALADINI
The Paladini Interview - Off The PitchBy Clive Whittingham
Date: 2/5/2006

Five years until the ABC loan expires - should we be worried yet?
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.
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."
Do we even know who ABC Corporation are?
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."

May 2002: QPR Get out ofAdministration having take on the 10 Million Pound loan from the "mysterious" ABC Corporation.
Bucks Free Press - May 31, 2002
QPR on road to cash recoveryQPR or to be strictly accurate, parent company Loftus Road plc are out of administration following a High Court ruling on Monday.
The plc and QPR went into administration in April 2001, but following a refinancing package finalised by the directors last week, the company has been able to pay off its creditors.
Chief executive David Davies said: "This is wonderful news and the conclusion of one of the darkest periods of our history. Having the administration order lifted marks the end of more than a year of tough financial decisions and hard work.
"This would not have been possible were it not for the commitment of coaches, players and backroom staff and the hard work of our administrators."
Mr Davies said, however, that one of the major factors in pulling the club back from the brink had been the supporters: "None it would have been possible without the support of the QPR fans. After seeing the club placed in administration, relegated and then lose more than half of our squad, they stuck by us in record numbers and continue to do so."
He went on to say that he felt the hard lessons learned would benefit the club in the future - "gone are the days when players will be paid excessive wages" - at a time when many clubs are on the verge of calling in the administrators. In the past, QPR had been highlighted as being run "on the economics of the madhouse."
But Mr Davies warned that although coming out of administration was a major step forward, much remained to be done on and off the field, although he was optimistic that the hard work of manager Ian Holloway and others would bear fruit.
"We don't suddenly have a magic wand to wave and make everything better. We are not suddenly flush with cash. With hard work and passion, we will improve this club but by bit and season by season.
"Ian Holloway has restored pride to the team and brought together a hungry and talented bunch of players. With the handcuffs of administration finally removed, we can start to build a solid future for QPR."

QPR Chairman Gianni Paladini Answers QPR Rivals & QPR 1st Questions-
From QPR Rivals Interview/Q&A with QPR Chairman, Gianni Paladini:

Overview -http://queensparkrangers.rivals.net/default.asp?sid=925&p=2&stid=8410351
"On the Pitch" http://queensparkrangers.rivals.net/default.asp?sid=925&p=2&stid=8410348
"Off The Pitch" http://queensparkrangers.rivals.net/default.asp?sid=925&p=2&stid=8410350
And an Update/Clarification - CLarification

Ben Kosky/Kilburn Times Exclusive Q&A with Chairman Paladini - May 2006

FROM QPR 1st Supporters Trust - Report of their April 27th 2006 AGM which included an appearance/address from QPR Chairman, Gianni Paladini - QPR1st

QPR 1st from five Years Ago - QPR1st - May 2002

More Stories re ABC & QPR (and also Derby County)
ABC Loans

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