Long term problems and short memories

Exactly four years ago this week the Sevco High Command told The People to ignore a chap in Ireland.

Their statement was very strong and highly unequivocal.

The Holding Company Vehicle stated that reports of a cash flow crisis had been massively exaggerated.

It worked, Ireland was mentioned and The People obeyed in time-honoured Pavlovian tradition.

Your humble correspondent had been tracking the Sevco cash crisis very closely at that point in 2014.

I haven’t gone away, you know.

Then three weeks later the chaps in the Blue Room had to organise an emergency loan to prevent an insolvency event.

The £1.5m was secured against some of the assets in the dignified basket.

The finance was initially provided by Laxey Partners and the Easdales brothers.

Now it is Close Brothers and the quantum is double.

The finance house was told by the Sevco High Command that the £3m plus full APR would be paid back from season ticket monies when they arrive in May.

That’s non-negotiable.

If they fail to make that then there are penalty clauses in the loan agreement.

This emergency loan will, best case scenario, cover the operating costs until April.

By that time the season ticket monies will start to come in.

I’m also told that Close Brothers were also very aware of the Take Over Panel issues.

Attempts were then made to provide a degree of comfort to them about more money being provided in the near future from a supporters group.

Moreover, the repayment of short-term loans that had been provided by two directors recently was also pushed back to the summer.

I’m sure that they will get their money back.

It is no coincidence that the amount required is exactly that which should have arrived in November from NOAL.

Perhaps Dave was misquoted in the RIFC year-end accounts…

After a discussion with the Serious Professional, an inter-galactic PR guru suggested that the best way to sell this to the fans was to trumpet it as an overdraft facility.

It isn’t.

It is a securitised loan just like the one that King et al berated the old board for back in February 2014.

However, this time it is for double the amount and almost certainly at much more punitive interest rates.

That this has been swallowed by The People as a good news story is a testament to their credulity and goldfish collective memory.

Accessing a securitised loan at punitive rates to provide operating cash is the sign of a distressed company.

That this morning The People are rejoicing says a lot about that sub-culture.

The other crucial part of the  Sevco  jigsaw is an almost complete absence of journalistic scrutiny from the local media.

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