Ricky_ 893 Posted November 21, 2012 Share Posted November 21, 2012 That hasn't helped! Let's say I want to buy Rangers tomorrow. I agree a fee of a pound. I then set up a company to buy the club and loan it a pound. I buy Rangers through the company. Have I not just loaned myself a pound? How can Green loan his own company 5.5m? btw I not for a minute suggesting im right in my thinking I simply can't understand the process.Green created the fake person. The fake person needed 5.5m to buy rangers. It also needed other funds to run the club.Green and other investors all chipped in to give the fake person the money it needed.The 5.5m was given as a loan. The other money invested was in return for a share holding to the fake person.When the fake person starts making money, it starts to repay green and chums the 5.5, after that, it pays dividends to everyone who owns shares.Its only fair those who put forward the initial moolah that they are first in the que. Dont kid yourself, they are here to make money. Quote Link to post Share on other sites More sharing options...
ZZed 4,510 Posted November 21, 2012 Share Posted November 21, 2012 When he bought the assests he also needed to put money in to keep it all running until it started to trade and make money again. This is internal debt, buying the assests is the same as starting a company from new, the money has to come from somewhere so these tend to be loans to form the new company and once it is in profit the loans can be paid back from the company, this is internal debt. nothing to worry about, common practice. Quote Link to post Share on other sites More sharing options...
trueblueal 2,117 Posted November 21, 2012 Share Posted November 21, 2012 I get they are here to make money, I always thought though that by paying the cash upfront then running the business well they would increase its value and make money that way. If you can buy a company by money loaned from the company itself is that not a Glazer style leveraged buyout? Where is the risk to the initial investor if the initial funding is only a loan? Quote Link to post Share on other sites More sharing options...
Thermopylae 15,287 Posted November 21, 2012 Share Posted November 21, 2012 CG getting the club for £5.5 million now looks like an absolute steal ... although to be fair to him he took the plunge when no one else would Quote Link to post Share on other sites More sharing options...
Ricky_ 893 Posted November 21, 2012 Share Posted November 21, 2012 I get they are here to make money, I always thought though that by paying the cash upfront then running the business well they would increase its value and make money that way. If you can buy a company by money loaned from the company itself is that not a Glazer style leveraged buyout? Where is the risk to the initial investor if the initial funding is only a loan?Its the same risk if you get shares in return. No difference really.If your mate created a business and you give his business $100, would you prefer to simply get it back when he makes money (loan) or would you ask for a % share in his business?Either or, the risk is it could go tits up leaving u as a creditor looking to retrieve some money back. Quote Link to post Share on other sites More sharing options...
harry handsome 629 Posted November 21, 2012 Share Posted November 21, 2012 Why wouldnt they want the money back from the purchase of the club, otherwise said money will become fluid and taxable. (See the Glaziers and Manyoo)Its all about maximum investment minimum tax. Quote Link to post Share on other sites More sharing options...
trueblueal 2,117 Posted November 21, 2012 Share Posted November 21, 2012 So what do we actually owe to our investors? If it is just the initial 5.5 that is ok i suppose. By what about subsequent investors have they all simply bought shares and we owe them nothing? Quote Link to post Share on other sites More sharing options...
Ricky_ 893 Posted November 21, 2012 Share Posted November 21, 2012 So what do we actually owe to our investors? If it is just the initial 5.5 that is ok i suppose. By what about subsequent investors have they all simply bought shares and we owe them nothing?Yes but they permanantly own a shareholding. They will recieve dividends upon good financial performance and will expect the value of their shares to rise, meaning they can sell at a profit. Quote Link to post Share on other sites More sharing options...
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