QPR's Week in Review: Positive Signings...Concerns re Finances and New ABC Loan

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On the field, a good week. Off the field, an additional loan from ABC with disturbing-to-some payback conditions. Several statements in response by a QPR Director and Legal Counsel sent to fan sites and to the press; but not a word on the club's Official Site. And in the background, numerous "strong" rumours of positive news re investor developments. [And in today's Sunday Mirror the headline "QPR Chief to Sell Up" and claim of a transfer embargo.

This week after many weeks of hopes and fears and rumours, Lee Camp finally signed for QPR. Also signing for QPR this week: A name no one had linked to QPR until a couple days before his signing: Charlton's Simon Walton. Camp and Walt together cost QPR a reported 500,000 pounds. (QPR of course received 2.5 million up front from the Lee Cook sale, but much of that money was needed to pay back loans). In signing Camp, QPR made a specific point of noting there had been no external financing of the deal Camp. Also joining QPR, on three months loan: Chelsea's highly-rated forward,Ben Sahar. Meanwhile QPR's Baidoo is having a trial with Bournemouth.

On Saturday, QPR played Wycombe at Wycombe, and won 1-0.

Re QPR, Additional ABC Loan & Comments by QPR Director and Legal Counsel, Nick De Marco: See below:

New Investment? Off the field, there are strong rumours re forthcoming new "investment" which is being termed very exciting.

QPR Fans Rank 12th in Championship in Optimism Survey! Optimistic QPR Fans

QPR Will Receive An Additional £750,000+ League Windfall?
BBC - League gives 'solidarity package' "The Premier League is to give more than £90m to the Football League over the next three seasons.... Clubs in the second tier of English football will receive an extra £11.2million next season." Depending on ranking, the fifth-placed club will receive £1,383,602. The lowest amount a club will get will be £775,000. Windfall

Report of QPR's Roof for Rent: The sky's the limit for QPR sponsorship- Rangers want a sponsor for the roof of their main stand
Loftus Road is on the Heathrow flight-path and QPR believe a deal similar to the one Brentford have with Qatar Airways could earn them £100,000-a-year.

AGENTS SPENDING: The Football League's latest report on clubs' spending on agents fees has been released. For QPR, it's way down to just £5,000 in the January-June 2007 Period. (For the entire year:Total Amount Committed to Agents - 1 July 06 to 30 June 07 £192,340 - Agents Fees

Which QPR Player Voted into PFA Hall of Fame?- Still waiting to See!
The Players Football Association (PFA) as part of its Centenary had the supporter of each club vote to decide which one of their players (current or past) should be voted into the Hall of fame. The voting closed June 29. a number of other clubs have announced their vote winner. QPR as of yet, have not." QPR Official Site - June 22, 2007 EVERY VOTE COUNTS Statement
Hall of Fame

Ex-QPRs Update - No Adam Czerkas to Motherwell...Dichio Named to MLS All- star roster. Justin Cochrane trialing at Brentford.

CONCERNS RE ADDITIONAL ABC LOAN AND PAY BACK CONDITIONS
The reports on this new loan came out a week ago on the QPR1st site:
Saturday, July 21. QPR's Director and Legal Counsel, Nick De Marco then offered responses to QPR1st,to LSA, to the Kilburn Times, to the Daily Mail.

QPR1st Initial Statement
ABC New Loan Agreement raises concern
QPR1st have learnt of a new loan agreeement made between QPR Holdings Limited and ABC Corporation.
Details of the agreement have been lodged with Companies House. The documents detail a new loan of £1,300,000 which is repayable in full on or before 15th August 2007. The documentation is dated to 2nd July 2007 and the charge is dated 22md June 2007.
Apart from the obvious suprise that QPR have gone back to ABC for more money when all the noises coming from the board have talked about moving the existing loan away from ABC, the Trust is specifically concerned about 2 additional elements in the documentation.
Firstly "payment in full on or before the repayment date set out in clause 6 1 2 of the new loan agreement (ie 31 July 2008) of the loan of £10,000,000 (ten million pounds sterling) advanced by ABC to the Company persuant to the terms of the Original Loan Agreement"
The Trust would like clarification on what exactly clause 6 1 2 in the new load agreement actualy states and whether the term of the original loan has been shortened to 2008 as suggested in the above paragraph copied from the Companies form 395 or whether this date is just an example and the original term of 10 years (2012) still applies to the new agreement.
Secondly we are concerned about the following paragraph submitted as short particulars on the same Companies House 395 form
" The Company grants ABC an option during the period of 16 months from the date of the Options Agreement ("the option period") to buy the freehold property at Loftus Road Stadium, South Africa Road, Hammersmith, London W12 7PA registered at HM Land Registry with title absolute under title number LN64521 (the "Property") at the purchase price of £10,000,000 (ten million pounds sterling (exclusive of VAT) from the company with full title guarantee"
The Trust has asked for an explanation as to why it is included and confirmation of the start date of the "option period" which we are currently assuming falls in line with the New Loan agreement 22nd June 2007. As far as the Trust is aware no such clause was within the original loan agreement.
In Total their are 3 new documents lodged at Companies House relating to the new agreement and we understand that these matters and the documentation associated with them are complex. We have tried to contact several directors of the club today but have failed to get a response however we realise that with it being the weekend they may not have rec'd the messages yet. We also tried to call the club but could not get a response over the phone. It may well be that there is a context to this information that will make it seem less alarming than it appears to us through the documentation available to us at the moment. As soon as we get a response from an official club representative we will post a follow up. QPR1st

COMPILATION OF QPR's LEGAL COUNSEL & DIRECTOR, NICK DE MARCO

NICK DE MARCO RESPONSE TO QPR1st

"QPR were faced with a winding-up order in July. If the club had not found a substantial sum of money to pay off before 4 July, the club would have been put in administration.
"Faced with that risk and the need to pay various other debts and on-going costs, the club had no alternative than to seek a short-term bridging loan.
"Nobody was prepared to lend the club the sums required in time, apart from ABC. It's not a great agreement for QPR but it was a choice between that and administration. QPR are able to repay the loan now, in part from the proceeds of sale of Lee Cook." Daily Mail

"...Fans will be aware that QPR was faced with a winding up order from both the IR and VAT in July. If the Club had not found a substantial sum of money to pay off before 4 July, the Club would have been put in Administration. At that point administrators would have been appointed and the players would have been sold off for way below their market price. ABC would have reclaimed their loan and could have enforced the term of the agreement allowing them to sell the ground. The Club would have been left with no ground or players. This is something the Board was determined to avoid at any cost.
The Board has announced that it is seeking new investors. It is necessary for QPR's long term survival and progression that such new investors come in. There are currently promising discussions in this regard. The Board has also looked to re-finance the ABC loan. Despite positive noises from some, nobody has yet agreed to take it on on better terms.
Faced with the risk of administration if a substantial sum was not paid to the taxman, the need to pay various other debts and of course on-going costs, the Club had no alternative than to seek a short term bridging loan. Nobody was prepared to lend the Club the sums required in time, apart from ABC who were themselves concerned that they might not be able to recover the debt owed to them by the Club if it went into administration.
That is why a variation of the loan agreement with ABC was negotiated. It's not a great agreement for QPR, but it was a choice between that and administration and the disastrous consequences that would have followed. QPR is able to repay the loan now, in part from the proceeds of sale of Lee Cook. Fans will recognise that when we have no new investment the only source of revenue is selling players or going into debt. The Board has attempted to avoid either of these options as far as possible, but at times it is necessary to keep the Club going which has to be the first priority. In any event, the Board believes the Cook deal is a good one for the Club.
It is also true that the club must find a replacement for the ABC loan in the next year. We are confident that we will do that, and financially it is necessary to do anyway. The advantage is that QPR will now be able to get out of the ABC loan earlier than the full 10 years once an alternative lender has been put in place. The on-going discussions with new investors obviously take this into account.
It is hoped that some new investment deal will be agreed in the next few weeks, otherwise an alternative loan provider from ABC will be agreed. It is not possible to go into detail about this at this stage because to do so may jeopardise those discussions.
I know fans understand that the main problem here is that the Club came out of administration with far greater debts than it went into it. The initial ABC loan agreement has cast a very long shadow over QPR. From the day that agreement was made, ABC effectively had the right to sell the ground. In essence, the initial loan agreement sold the ground to ABC for £10 million with interest, and only if that money was paid back to ABC would the ground be QPR's again. That has been the major difficulty facing the Board at QPR since, under both the Chairmanships of Bill Power and Gianni Paladini.
The Club has to pay its debts to survive, and we have to attract new investors now that the investment from the Monaco investors (which has kept the Club going for 4 years) has come to an end. Until the new investors come in, I am sure fans will agree that the main objective must be to avoid administration at all costs.
I realise that I might not have been able to answer all your questions in one email, and some people will inevitably describe this response as "spin", but I thought it better to give you a response as soon as possible. We hope to able able to report a lot more over the next couple of weeks or so. I know it's also time we had another fans consultative meeting and I am sure people will want a discussion of this then.
In the meantime, we have avoided administration and have secured the Club's short term future. All the Board's attention is now turned to the discussions which will hopefully resolve the long term future, over the next few weeks. QPR1st

NICK DE MARCO'S Follow-up RESPONSE TO QPR1st

Clarification from QPR on the "option to purchase"

"...Although I was not involved in the drawing up of the agreements with ABC, I have seen those agreements. I can categorically confirm that the “option” you speak of only arises after the repayment date of the original loan (of £10 million) has past, and only if the debt has not been repaid as of that date. The “option period” only arises after that date. This is very clear in the express terms of all the signed documentation. ABC have no option at present. QPR still has to find an alternative lender to replace the ABC loan, but so long as it does that before the expiry of the loan then the option does not arise...."
QPR1st

NICK DE MARCO'S RESPONSE TO LSA

"...It ought to be obvious why the details were not gone into at that stage. We all know the club has continued financial difficulties, but if it was announced that we needed £1.3million by the end of August or faced defaulting on a loan, do you think there would be any chance of getting more than the £1.5million Fulham bid upfront for Lee Cook? I can tell you there would be no chance at all. So by the news coming out a couple of weeks later we may have brought in an extra one million and are in a better position to sort out the financial mess. I am sure you would all agree that makes sense, and there are times when certain things have to remain completely confidential for the benefit of the Club. It remains the case, as was said at that meeting, that the only long term solution is brining in new investors and that is what we are spending all out time trying to agree....
LSA

NICK DE MARCO, QUOTED IN BEN KOSKY, KILBURN TIMES

Ben Kosky/Kilburn Times - Cook move prevents cash crisis
"Lee Cook's departure to Fulham has effectively staved off the threat of QPR being forced into administration for a second time.
Rangers increased their debt to the ABC corporation by £1.3m at the start of the month to avoid a potentially disastrous winding-up order from the Inland Revenue.
But the sale of Cook, which netted the club £2.5m up front, will enable them to repay the second loan - even though 15 per cent of the fee goes to the winger's former club Watford.
The Rs could eventually receive as much as an extra £2m from Fulham, dependent on how many appearances Cook makes for them and their success over the next four years.
QPR director Nick de Marco explained that the club had no choice but to turn to ABC, who effectively hold an option to sell Loftus Road under the terms of their original £10m loan in 2002.
He told the Times: "No-one else can lend us money with the ground as security because of the existing arrangement with ABC, so it was either borrowing from them or administration.
"As a result, the chances of administration are now not as great as they might have been a few weeks ago.
"We felt that to get £2.5m up front with no conditions attached is a good deal for someone who hasn't been tested in the Premiership - much better than we got from Watford for Danny Shittu."
He added that the board will continue discussions with potential investors, with a view to refinancing the remaining ABC loan, and hope to make an announcement in the next few weeks.... Kilburn Times

Compilation

Was then reported in the press:
July 24 - Ben Kosky/Kilburn Times - Cook move prevents cash crisis
"Lee Cook's departure to Fulham has effectively staved off the threat of QPR being forced into administration for a second time.
Rangers increased their debt to the ABC corporation by £1.3m at the start of the month to avoid a potentially disastrous winding-up order from the Inland Revenue.
But the sale of Cook, which netted the club £2.5m up front, will enable them to repay the second loan - even though 15 per cent of the fee goes to the winger's former club Watford.
The Rs could eventually receive as much as an extra £2m from Fulham, dependent on how many appearances Cook makes for them and their success over the next four years.
QPR director Nick de Marco explained that the club had no choice but to turn to ABC, who effectively hold an option to sell Loftus Road under the terms of their original £10m loan in 2002.
He told the Times: "No-one else can lend us money with the ground as security because of the existing arrangement with ABC, so it was either borrowing from them or administration.
"As a result, the chances of administration are now not as great as they might have been a few weeks ago.
"We felt that to get £2.5m up front with no conditions attached is a good deal for someone who hasn't been tested in the Premiership - much better than we got from Watford for Danny Shittu."
He added that the board will continue discussions with potential investors, with a view to refinancing the remaining ABC loan, and hope to make an announcement in the next few weeks.
Rangers finally conceded defeat in the battle to retain their Player of the Year last week, when he agreed personal terms and signed a four-year deal at Craven Cottage....

Daily Mail - July 26 - Rangers saved by £2.5m fee for Cook
Fulham saved west London rivals Queens Park Rangers from administration when they paid £2.5million for winger Lee Cook, it has emerged.
The deal allows the debt-ridden club to repay a £1.3m loan from Panama-based money-lenders, the ABC Corporation, which is secured against Loftus Road.
Rangers already owe ABC £10m from the deal which took the club out of administration in 2002 but needed the extra cash to pay an outstanding tax bill and stave off a winding-up order from HM Revenue and Customs.
The money from last week's Cook transfer will allow the club to pay off the short-term loan and give chairman Gianni Paladini more time to find new investors.
Rangers director Nick De Marco said: "QPR were faced with a winding-up order in July. If the club had not found a substantial sum of money to pay off before 4 July, the club would have been put in administration.
"Faced with that risk and the need to pay various other debts and on-going costs, the club had no alternative than to seek a short-term bridging loan.
"Nobody was prepared to lend the club the sums required in time, apart from ABC. It's not a great agreement for QPR but it was a choice between that and administration. QPR are able to repay the loan now, in part from the proceeds of sale of Lee Cook."
Rangers are understood to be close to refinancing the £10m ABC loan with another money lender.
To aid this process, QPR directors have negotiated an early-repayment clause with ABC, which had not originally been expecting its money back until 2012.
Under the deal, QPR have until 31 July next year to pay off ABC with cash from another lender or the company will have the right to take over ownership of Loftus Road.
The possibility of losing the ground has raised alarm among fans but QPR sources are "extremely confident" the 2008 option will never be exercised.
The club are in advanced negotiations with a new financial backer and hope to make an announcement in the next few weeks....Mail
OTHER ITEMS

See QPR Report for further details of all these stories.