Wasps Consent Solicitation

[meldrewlives]

Anyone else following the above announcement and the associated Trading Update?

The detailed numbers apart, I don't like the smell!

Accounts not published yet, schoolboy accounting errors: confusing income and equity and even which year the transaction should be posted to.

Haven't yet decided whether its a 'bail out' or 'buy more' proposition, given the price hit.

[GoSeigen]

Anyone else following the above announcement and the associated Trading Update?

The detailed numbers apart, I don't like the smell!

Accounts not published yet, schoolboy accounting errors: confusing income and equity and even which year the transaction should be posted to.

Haven't yet decided whether its a 'bail out' or 'buy more' proposition, given the price hit.

That really stinks. I'd characterise them as criminal errors rather than schoolboy personally -- they look completely deliberate i.e. designed to conceal the true position of the business. If I were you I'd look very carefully at the identity of the responsible shareholder here and if he is any thing short of squeeky clean I'd run a mile. Last time I saw this sort of thing I lost almost 100% of my bond value within weeks. I won't mention the F word but the possibility should be in the back of bondholders' minds.

Sadly, there is no way for bondholders as a group to extricate themselves now -- over a barrel is the term I think. OTOH, individual holders can say: "I've just about broken even, and there are other opportunities in the world. If Wasps are struggling to stay afloat after a home-run season then I'll pass the bag to someone else who cares less about their capital."


GS

[Alaric]

Anyone else following the above announcement and the associated Trading Update?

That's the retail bond presumably.

http://www.telegraph.co.uk/finance/pers ... erest.html

http://www.coventrytelegraph.net/news/w ... s-14069622

[everhopeful]

My post of July 29th on this board was timely it seems. I am glad I sold.

[runnygum]

Anyone else voting against the consent?

They are offering 0.2% that they dont have to buy consent. But give then capital loss so far, the fact the stadium is security Im not minded to agree.

[Mapfumo]

Always thought this looked quite a risky proposition for a 6.5% return.

Price seems to be up a few % today. What would be the consequences of bondholders not giving their consent?

[runnygum]

Management will have to stop lying to themselves and investors and stop pissing money against the wall and actually manage the business.

Time for investors to stop bending over imo

[shaunm]

The Company Secretary has recently jumped ship
PARKER, John Charles Moore
Correspondence address
Ricoh Arena, Judds Lane, Longford, Coventry, England, CV6 6AQ
Role RESIGNED
Secretary
Appointed on
30 March 2016
Resigned on
28 February 2018

Relative short stay for a senior position

[shaunm]

30th June 2017 Statutory Accounts now overdue at Companies House

[PinkDalek]

30th June 2017 Statutory Accounts now overdue at Companies House

You've included a question mark but may have seen this:

https://beta.companieshouse.gov.uk/company/04187289

[GoSeigen]

Anyone else following the above announcement and the associated Trading Update?

The detailed numbers apart, I don't like the smell!

Accounts not published yet, schoolboy accounting errors: confusing income and equity and even which year the transaction should be posted to.

Haven't yet decided whether its a 'bail out' or 'buy more' proposition, given the price hit.

That really stinks. I'd characterise them as criminal errors rather than schoolboy personally -- they look completely deliberate i.e. designed to conceal the true position of the business. If I were you I'd look very carefully at the identity of the responsible shareholder here and if he is any thing short of squeeky clean I'd run a mile. Last time I saw this sort of thing I lost almost 100% of my bond value within weeks. I won't mention the F word but the possibility should be in the back of bondholders' minds.

Sadly, there is no way for bondholders as a group to extricate themselves now -- over a barrel is the term I think. OTOH, individual holders can say: "I've just about broken even, and there are other opportunities in the world. If Wasps are struggling to stay afloat after a home-run season then I'll pass the bag to someone else who cares less about their capital."


GS

Please note the following statements about Wasps Holdings Group (sole source of the issuer's income) in the latest results:

http://www.wasps.co.uk/docs/default-source/Bonds/wasps-finance-plc-fy17-final-signed.pdf?sfvrsn=0

The auditors were also presented with evidence which their testing revealed to have been falsified.

and

PricewaterhouseCoopers LLP have notified the directors that they will be resigning as auditors of the company.


Also note the comments on reliance on support of the shareholder for continued viability as a going concern of the company.

[...] the condition identified above regarding the ongoing support of the Company’s shareholder indicates the existence of a material uncertainty which may cast significant doubt about the Company’s ability to continue as a going concern.



Not one, not two but three huge red flags, so I reiterate what I wrote earlier, quoted above.

Holders and potential buyers should read the audit notes carefully. There are extremely serious matters raised therein. Also read the sections on related party transactions and controlling party (and maybe check who is on the audit committee of the Group -- I haven't done this, but it is where I'd go next if I were a holder).


Inexplicably the bond price is still holding up so a chance to get out if any holders need to e.g. if you invested because you thought this would be a "safe" or "steady" source of income -- it is not.

For those interested in a speculative punt, I see little reason to buy now, I'd want a large return and material changes within the Group finances to mitigate the risks already exposed.

GS

[Alaric]

Inexplicably the bond price is still holding up

I'd suspect a certain amount of "fan base" non-financial support. It is a popular Rugby Union club after all.

[GoSeigen]

Inexplicably the bond price is still holding up so a chance to get out if any holders need to e.g. if you invested because you thought this would be a "safe" or "steady" source of income -- it is not.

Very little comment on the ongoing collapse of the Wasps bond price. Hopefully that means holders who post here took advantage of the above opportunity and offloaded their bonds...

The proximate causes of the weak price appear to be
1. The alleged "cooking of the books" with "falsified information" by Wasps a couple of years ago;
2. The consequent FCA probe announced in Apr 2019;
3. The ongoing financial losses at Wasps, annual results are due imminently;
4. Reliance of the business on funding from the controlling shareholder to remain a going concern;
5. Concern over the long-term viability of the business.
6. Looming refinancing requirement when the bonds fall due in 2022.
7. Breaches of covenants which have already occurred.

GS

[Alaric]

6. Looming refinancing requirement when the bonds fall due in 2022.

A price of around 70 on a 6.5% bond due to mature in May 2022 is well into junk territory. Presumably then the price reflects a risk that the bond will not be able to be paid off or refinanced when it hits the maturity date.

[Gan020]

Regrettably it seems buyer beware with a number of the more recent issue retail bonds (last couple of years). I assume they are coming to the retail bond market as the borrowers aren't able to get them away through other means.

Which is all a great pity as there is certainly an appetite from PI's seeking fixed returns.

I took some inital interest in Wasps and then rejected as I was concerned how they were going to re-pay the principle and I've followed the story for some time. I read the "questionable accounts" and their accounting treatment and have not paid much attention since.

The few snippets I've picked up since around the financing of the stadium suggest to me that it is now difficult to work out a fair value for the bonds although my view is they may be worth far less than they are trading at.

[GoSeigen]

Wasps finally trading at a proper investable price: 25p today. Can't see what has precipitated the price change but related to cancelling of rugby fixtures perhaps and the poor financial report last week?

GS