30 October 2018

Saracens Ltd pay Saracens Copthall LLP

As ever there is a complex corporate structure when property is involved. The above, from the published accounts, shows the state of play at June 2012 of Saracens Ltd which is the trading company of the club.

Move forward 5 years and the financial situation is worse. When will the losses end?

In the July committee report the council said this:

That may well be the case but doesn't now matter as the loan vehicle was changed in the October report to Saracens Copthall LLP. It was also a cosmetic move with assets and liabilities being moved from one pocket to another without any fundamental change in underlying profitability.

The council planned to ask for assurances.

Sounds marvellous doesn't it, an assurance from rich shareholders. The trouble is that if you go back up to the statements made in the published publicly available accounts an assurance (a letter of support) isn't legally binding, it's like a weak promise that you can legally walk away from.

What the council needs to obtain in the way of assurance is a proper personal guarantee for the entire length of the loan, for the full amount of the loan and which cannot be rescinded and from a person with sufficient financial standing to make good their undertaking if it comes to it. In Mr Wray's case he is 70 years old so we need a guarantee that will run until he is 100. Not an attractive proposition is it?

If the council can't get cast irons guarantees the loan should not be made and if they can get cast iron guarantees then the backers should put their own money in, they are the ones with skin in the game, not council tax payers.

Yours frugally

Mr Mustard

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