Roman loses £12 billion on the stock exchange
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peanuts for him.
he got lots more to spend on chelski
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12 000 000 000
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Originally posted by zocoss:
Err... sometimes, its not so simple as "just paper loss"... It can take years or decades for that stock to rise to an acceptable level again... While your stock is in depreciation, you may have no working capital.The country's ailing economy and foreign capitalists withdrawing billions of pounds worth of investment won't help and it could bring more prolong instability to that nation.
If you dont have the cash you have to use other assets which generally means you have to sell stock regardless of the price to pay your bills... so it is far more complicated than to say "just paper loss"
And unlike with oil companies, mining stocks are far more difficult to recover compare to oil which is of greater demand... No one is safe.... Millionaires can wake up broke, Billionaires too with the size of this current worldwide meltdown... And in the process, new millionaires and billionaires could be created...
Slightly OT zocoss but why would be that one may not have working capital when the stock is in depreciation? Working capital is the difference between current assets and current liabilities. I don't think current assets of a company includes stock of that company.Hopefully Roman did not pledge his stocks as security for any loan or else he will hard pressed to top-up those stocks to maintain the value of the security.
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Originally posted by JLennon:
Slightly OT zocoss but why would be that one may not have working capital when the stock is in depreciation? Working capital is the difference between current assets and current liabilities. I don't think current assets of a company includes stock of that company.Hopefully Roman did not pledge his stocks as security for any loan or else he will hard pressed to top-up those stocks to maintain the value of the security.
There is nothing OT or SB to my earlier post at all... If you notice my earlier post, I said "may have no working capital"How a company raise more fund either to advance in new investments or just to meet annual overheads cost is quite straight forward. Mainly either you are making profits annually, borrow with collateral as you mentioned pledging his stocks is one way, or you release more company shares to generate funds...
A lot of companies may not have lots of spare cash lying around. In most cases, its used up for reinvestments in the company or projected operation cost in a normal environment in their yearly budget. In other words, working capital in a usual environment. The sudden downturn in the world's economy may throw a spanner in its work, banks are going bankrupt, Institutions are more unwilling to lend and people are buying less... The projected profits or revenue that may have been incorporated may now not materialize... But the overheads and cost continues to remain that could lead the company into the reds. And if the situation remains for a prolong period, and I don't mean years, just one or two... It could have very serious consequence... Working capital may need to be raise in order to maintain the business.
How strong is the fundamentals of the company we are not very sure, But just by the sheer depreciation alone, I don't think there is great confidence in it at this moment. We only know that its funded by Roman's billions before the downturn and he was perceived to have lost $12b pounds from just the amount of the depreciation alone... So he could have invested maybe $13 to $14b in it.
Such things can change very fast in a short space of time... Singapore's projected GDP was first estimated at between 4.5 to 6%, then it became 3 to 4.5% then its 0 to 3% and now they say in technical recession. All within the space of just months...
The thing here is there are only a total free-float of 14 percent of its share in the open market and the rest could be Roman's... For all we know, maybe Roman owns more than 80 percent of the company... So meaning he will have the biggest liability to the rest... The $12 billion loss is any indication of the amount of shares he hold, then I think it can't be a small sum.
A lot of rich businessman are valued by the measured of the shares he owns and their value at that point in time. Some of these so called rich businessman may not have "cold hard cash" in hand. They may have outstanding loans to banks and other institutions when they purchase stuff like (Houses, Yacht or other major things). Their reputation allows them to get loans easily but when bad news starts to appear, these people will be the first ones to chase them to recover their loans...
Singapore's very own former richest man Mr Khoo was top of the list for a number of years mainly because of the shares he hold in the Standard Chartered Bank and its value...
Another point we have to ask is if Chelsea has a debt of almost $750m, why is it that Roman is only willing to fund almost $600m of it and the rest are owe to other institutions? Why don't he come up with the full sum instead and save up on the huge interest? The $150m loan is not a small sum either... Arsenal has a loan of about $260m and they are already paying interest at the expense of players recruitment... Perhaps the $500+m could have been loan out during his earlier years when he was still a cash rich oil baron instead of now a businessman.
In March 2008, Roman was still valued at US$23.5 billion. He is estimated to have lost US$20 billion. In other words, Pounds $12 billion... His value is now around 3.5b US about $2b pounds. So if this downturn continues, Roman could be in trouble... But if it change soon, he will be rich again provided that his company's stock goes up...
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song bo?
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Originally posted by zocoss:
There is nothing OT or SB to my earlier post at all... If you notice my earlier post, I said "may have no working capital"How a company raise more fund either to advance in new investments or just to meet annual overheads cost is quite straight forward. Mainly either you are making profits annually, borrow with collateral as you mentioned pledging his stocks is one way, or you release more company shares to generate funds...
A lot of companies may not have lots of spare cash lying around. In most cases, its used up for reinvestments in the company or projected operation cost in a normal environment in their yearly budget. In other words, working capital in a usual environment. The sudden downturn in the world's economy may throw a spanner in its work, banks are going bankrupt, Institutions are more unwilling to lend and people are buying less... The projected profits or revenue that may have been incorporated may now not materialize... But the overheads and cost continues to remain that could lead the company into the reds. And if the situation remains for a prolong period, and I don't mean years, just one or two... It could have very serious consequence... Working capital may need to be raise in order to maintain the business.
How strong is the fundamentals of the company we are not very sure, But just by the sheer depreciation alone, I don't think there is great confidence in it at this moment. We only know that its funded by Roman's billions before the downturn and he was perceived to have lost $12b pounds from just the amount of the depreciation alone... So he could have invested maybe $13 to $14b in it.
Such things can change very fast in a short space of time... Singapore's projected GDP was first estimated at between 4.5 to 6%, then it became 3 to 4.5% then its 0 to 3% and now they say in technical recession. All within the space of just months...
The thing here is there are only a total free-float of 14 percent of its share in the open market and the rest could be Roman's... For all we know, maybe Roman owns more than 80 percent of the company... So meaning he will have the biggest liability to the rest... The $12 billion loss is any indication of the amount of shares he hold, then I think it can't be a small sum.
A lot of rich businessman are valued by the measured of the shares he owns and their value at that point in time. Some of these so called rich businessman may not have "cold hard cash" in hand. They may have outstanding loans to banks and other institutions when they purchase stuff like (Houses, Yacht or other major things). Their reputation allows them to get loans easily but when bad news starts to appear, these people will be the first ones to chase them to recover their loans...
Singapore's very own former richest man Mr Khoo was top of the list for a number of years mainly because of the shares he hold in the Standard Chartered Bank and its value...
Another point we have to ask is if Chelsea has a debt of almost $750m, why is it that Roman is only willing to fund almost $600m of it and the rest are owe to other institutions? Why don't he come up with the full sum instead and save up on the huge interest? The $150m loan is not a small sum either... Arsenal has a loan of about $260m and they are already paying interest at the expense of players recruitment... Perhaps the $500+m could have been loan out during his earlier years when he was still a cash rich oil baron instead of now a businessman.
In March 2008, Roman was still valued at US$23.5 billion. He is estimated to have lost US$20 billion. In other words, Pounds $12 billion... His value is now around 3.5b US about $2b pounds. So if this downturn continues, Roman could be in trouble... But if it change soon, he will be rich again provided that his company's stock goes up...
The reference to OT was not to your post but my query on working capital. What does "SB" mean?Yeah, sometimes its not enough to be valued a lot. You need to realise those assets first. As for Chelsea's non-Roman debt of $150m, I would hazard a guess that interest rates could have been lower then or his cash is simply tied up in other investments. I would be surprised if those $150m loans are not personally guaranteed by Roman.
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Originally posted by JLennon:
The reference to OT was not to your post but my query on working capital. What does "SB" mean?Yeah, sometimes its not enough to be valued a lot. You need to realise those assets first. As for Chelsea's non-Roman debt of $150m, I would hazard a guess that interest rates could have been lower then or his cash is simply tied up in other investments. I would be surprised if those $150m loans are not personally guaranteed by Roman.
i thought Roman already cleared debt for Chelsea when he brought it?
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Originally posted by youyayu:
i thought Roman already cleared debt for Chelsea when he brought it?
Its been quite a few years since he took over so more debt may have been incurred as result. It was reported that a lot of the money he injected (that was spent on players) was by way of an interest-free loan, not equity. By doing it this way and in the event that Chelsea Football Club is dissolved, he would be a creditor for those sums of money and therefore rank at least pari passu with other senior unsubordinated lenders.