[dangerman]

This all going to end in tears, isn't it?

For the fans, yeah it looks that way.

Maybe I am being a bit over the top butI get the feeling there is a real chance we could be the first real "big" club to go to the wall if things don't change.

[baggiejohn]

For the fans, yeah it looks that way.

Maybe I am being a bit over the top butI get the feeling there is a real chance we could be the first real "big" club to go to the wall if things don't change.

The club has a philosophy of living within our means & minimum risk, so there's little danger of us going to the wall. It does mean though that we will not be in a position to compete at a very high level.

[robnewbold]

The fact that we used to be 'big' and laughed at the Villa and screamed at the Dogs seems a lifetime away now.
 Short termism and a poo or bust strategy by owners and hench men have led us to were we are now, but then we all know that.
Unless we get a sensible buyer i do believe it is only a matter of time and a relatively short amount of time at that, before the dominos start falling.
The Club seems locked in a death spiral at the moment.

[paulosull]

The club has a philosophy of living within our means & minimum risk, so there's little danger of us going to the wall. It does mean though that we will not be in a position to compete at a very high level.

agree that football club lives well in its means but owner is taking hard earned cash from club in loans and is refusing to pay they back .

[overseas baggie]

agree that football club lives well in its means but owner is taking hard earned cash from club in loans and is refusing to pay they back .

They’ll be repaid when the club is sold, which surely will be in the not too distant future.

[Standaman]

The problem for the club is although it has historically been conservatively run last two seasons it has been anything but and without an ownership willing or able to bankroll our current liabilities. We are reliant on commercial finance which is costing us £2m plus a year to bridge the gap between income and expenditure. Cash flow will become an increasingly pressing we let O'Shea go for less than the release clause because there was a chunk of cash up front.

There is plenty of evidence of the financial strain the club is under. The Wisdom Smart loan is guaranteed by Holdings but that is very much jam tomorrow and wholly dependent on a sale which is not imminent and in the mean time the club has little choice but to work within the financial constraints imposed on it.

[dangerman]

The club has a philosophy of living within our means & minimum risk, so there's little danger of us going to the wall. It does mean though that we will not be in a position to compete at a very high level.

Agreed but the club arn’t just living within its means. They’ve also got to pay a fat loan with high interest back.

We could be the first club to go that actually hasn’t spent beyond’s it’s means and simply down to poor management.

I’d feel slightly better about the situation if we’d have bought top players in the last few years and won a cup or two but we’ve not even got that as an excuse.

I can’t begin to understand the situation and only base my opinion on the limited facts around.

So my question is, how serious is the situation and do my worries have some legitimacy to them?

[Mo]

Agreed but the club arn’t just living within its means. They’ve also got to pay a fat loan with high interest back.

We could be the first club to go that actually hasn’t spent beyond’s it’s means and simply down to poor management.

I’d feel slightly better about the situation if we’d have bought top players in the last few years and won a cup or two but we’ve not even got that as an excuse.

I can’t begin to understand the situation and only base my opinion on the limited facts around.

So my question is, how serious is the situation and do my worries have some legitimacy to them?

The situation is very serious I’m only going off the same information as you but informed people seem to be suggesting the situation has got worse .

Perhaps the poster Sedgley Albion can advise further .

[baggiejohn]

Agreed but the club arn’t just living within its means. They’ve also got to pay a fat loan with high interest back.

We could be the first club to go that actually hasn’t spent beyond’s it’s means and simply down to poor management.

I’d feel slightly better about the situation if we’d have bought top players in the last few years and won a cup or two but we’ve not even got that as an excuse.

I can’t begin to understand the situation and only base my opinion on the limited facts around.

So my question is, how serious is the situation and do my worries have some legitimacy to them?

Businesses that go bust do so because they don't have enough assets to cover their debts.

We have players whose transfer value would cover the MED loan without having to sell the Hawthorns, so technically we're not going bust.

IMO, it's important to differentiate, if we're financially viable or if we're capable of competing at Championship level.

As things stand, I would say we'll continue to be financially viable, but the fans won't like it because we won't be able to afford to compete.

[liverbaggie]

Just a thought chaps,
Because the Hawthorns is a valuable thing for the area and not for sale as such, could the local council buy WBA for the community and we become a community project until a decent buyer arrives?

[SmethDan]

Just a thought chaps,
Because the Hawthorns is a valuable thing for the area and not for sale as such, could the local council buy WBA for the community and we become a community project until a decent buyer arrives?

From what I've read online Sandwell council can't afford to repair the bogs in West Brom market. Buying West Bromwich Albion may prove beyond their means.

[SmethDan]

Do any of the ITK posters on here know how much of the MSD loan money is going towards the training ground upgrades which were reported in the press a few days ago?

[gazberg]

Kieran Maguire

The £2m loan taken out by West Brom owner and business genius Guochuan Lai, which charges interest at 5% a month, will hit £10 million by March 2025 if it is not repaid...and his record for repaying loans is best described as 'Bobbins' #WBAFC

[BAGGIE5]

I’m totally confused with all these loans. For my understanding the club has a 20 million msd loan which it needs to pay back. Then lai owes the club 5 million. Then Peace loaned 5 million but Lai took the debt in the sale. Now there’s a new loan of 2 million which Lai has taken or club?

Lai is really getting close to losing it all if he don’t sell soon.

[LiamTheBaggie]

Just a thought chaps,
Because the Hawthorns is a valuable thing for the area and not for sale as such, could the local council buy WBA for the community and we become a community project until a decent buyer arrives?

Keep that thought because it will never ever ever happen.

[SedgleyAlbion]

Ali, I'm sorry, but I don't know what all this means.

West Bromwich Albion Group consists of West Bromwich Albion Holdings owned by Yunil (88%) and the minority shareholders represented by Shareholders for Albion (12%).

West Bromwich Albion Holdings is available for sale.

If Holdings has a value of say £60 million & Lai sold a portion of that, there  would be no advantage to seller or buyer.
What the club needs is a cash injection, so additional investment. If that were to happen, then the investor would want some control.

Not even an advantage if, for instance, the loan was used as a leverage to extort more shares in exchange for writing off the debt. Hearn knows he’s not getting his money, so next best option is shares in the club. Lai has already had the £2m don’t forget. Also what would happen if some more undesirables, like for example Kashkashy and Farnell (whose business partners with Bassini) joined together?

Obviously, I’m just speculating, but what if? Then Lai wins, the two mentioned win as they get an ‘in’ and Hearn wins because he wasn’t getting his £4m and knows it.

[SedgleyAlbion]

The club has a philosophy of living within our means & minimum risk, so there's little danger of us going to the wall. It does mean though that we will not be in a position to compete at a very high level.

You are so so far wrong it’s incredible

[BalisPen]

Don't know if true, but on a4a facebook page i read a post that said they knew the person behind warmfront, and he was a season ticket holder.

Any confirmation of this?

[SedgleyAlbion]

The situation is very serious I’m only going off the same information as you but informed people seem to be suggesting the situation has got worse .

Perhaps the poster Sedgley Albion can advise further .

What I think could happen is this Warmfront guy Alex Hearn will be joining up with some others unsuitables (potentially like Farnell & Kashkashy) to use this to get equity of share in return for ripping up loan agreement.

Farnell and Kashkashy win as they get in through back door. No Fit and proper persons test either as it’s below minimum stake

Hearn wins as he gets bigger share

Lai wins as loan gets repaid

Only people that lose is the club as that £2m long gone.

We have worked hard to prove this but we can’t get it fully verified, but it’s that important I’m telling you folks. I can’t publicly as I can’t risk a libel case. But that’s what I think could happen.

Which is why we tried to do something yesterday

[SedgleyAlbion]

Don't know if true, but on a4a facebook page i read a post that said they knew the person behind warmfront, and he was a season ticket holder.

Any confirmation of this?

A season ticket holder yes. At Aston Villa. And no, I’m not joking.

[Mo]

What I think could happen is this Warmfront guy Alex Hearn will be joining up with some others unsuitables (potentially like Farnell & Kashkashy) to use this to get equity of share in return for ripping up loan agreement.

Farnell and Kashkashy win as they get in through back door. No Fit and proper persons test either as it’s below minimum stake

Hearn wins as he gets bigger share

Lai wins as loan gets repaying

Only people that lose is the club as that £2m long gone.

We have worked hard to prove this but we can’t get it fully verified, but it’s that important I’m telling you folks. I can’t publicly as I can’t risk a libel case. But that’s what I think could happen.

Which is why we tried to do something yesterday

Thank you this is greatly appreciated.

[Standaman]

The Warmfront loan is an absolute doozy. The default interest rate is 5% per month (roughly equivalent of 75% apr) at that rate of accrual the value of Lai's shares are exceeded by the interest payments somewhere around year 4 and it needs to be remembered the original loan was only for £2m.

Fortunately for the day to day operation of the club it's assets are ring fenced by the charge on them by the MSD loan. So Lai cannot access them to repay the Warmfront loan. However the person who controls the loan in effect controls the club assuming Lai is not in a position to repay it (which seems to be the case)

When the loan is called in the club will have been sold for £2m plus a write off of interest which never was going to be paid. When the shareholding changes hands the persons concerned will be subject to EFL approval but not until then because they don't actually control the club.

The only route out of this for Lai is either he raises funds to repay Warmfront or the club is promoted this year. At that point the MSD loan could be settled and Lai could raid the club's coffers to repay the Warmfront loan which at the start of next season will have grown to over £6m. 

[GlenGrant]

Will Lai sell a business that is providing him and his Chinese associates handsome salaries every week. Loans and lump sums at regular opportunities.
Will Lai sell up losing a large sum of his initial investment.
Will any new owner take on Lai's debts.
Will any potential new owner pay Lai's asking price.
No no no no no.
So to service out debts and stay afloat more assets will have to be sold and continue to be sold. Until we have nothing left.
We're looking at Administration sooner or later. As for being sold the longer we continue to build up debts the tougher it gets to find a buyer. Currently we owe £32million and are losing £30million a year on operating costs. It doesn't take a genius to reach a simple conclusion we will have serious cashflow problems  very soon.

[SmethDan]

What I think could happen is this Warmfront guy Alex Hearn will be joining up with some others unsuitables (potentially like Farnell & Kashkashy) to use this to get equity of share in return for ripping up loan agreement.

Farnell and Kashkashy win as they get in through back door. No Fit and proper persons test either as it’s below minimum stake

Hearn wins as he gets bigger share

Lai wins as loan gets repaid

Only people that lose is the club as that £2m long gone.

We have worked hard to prove this but we can’t get it fully verified, but it’s that important I’m telling you folks. I can’t publicly as I can’t risk a libel case. But that’s what I think could happen.

Which is why we tried to do something yesterday

This Warmfront Alex Hearn or is there another right Alec out there?

'Alex is widely recognised as a serial entrepreneur, with business interests in professional football, leisure and tourism and overseas property developments'

https://www.warmfrontteam.co.uk/about/senior-management-team/54.htm

Edit: managed a quick look at the website and we are listed as one of their 'partners'.

[overseas baggie]

What I think could happen is this Warmfront guy Alex Hearn will be joining up with some others unsuitables (potentially like Farnell & Kashkashy) to use this to get equity of share in return for ripping up loan agreement.

Farnell and Kashkashy win as they get in through back door. No Fit and proper persons test either as it’s below minimum stake

Hearn wins as he gets bigger share

Lai wins as loan gets repaid

Only people that lose is the club as that £2m long gone.

We have worked hard to prove this but we can’t get it fully verified, but it’s that important I’m telling you folks. I can’t publicly as I can’t risk a libel case. But that’s what I think could happen.

Which is why we tried to do something yesterday

Not correct.  The club does NOT lose that £2m as it’s not a club loan and never was!  The £2m didn’t come out of the club in the first place - it was borrowed by Holdings from Warmfront.  The only loser is Yunyai whose shareholding in Holdings will have been reduced if the loan converts until equity.

“Follow the money” is always a useful starting point.