Billy One Mate Posted March 21, 2005 Author Share Posted March 21, 2005 Work it out, borrowings to date; Initial loan 180 million Second loan 120 million Future loan 50 million Total 350 million Intrest payments @ say 6% 21 million per year I heard quoted on the radio 25 million What beats me is how they can ever possibly hope to repay the borrowings when the annual sales revenue for the MEA is about 35 million per year. These figures do not stack up!!!!!!!!!!!!!!!! If they trade in just electric and electrical goods with a population of 75 thousand there is no chance of ever repaying the loan and only a small chance of meeting the intrest payments. My view is that we are seriously in the manure. Link to comment Share on other sites More sharing options...
Paul H Posted March 21, 2005 Share Posted March 21, 2005 Work it out, borrowings to date; Initial loan 180 million Second loan 120 million Future loan 50 million Total 350 million Intrest payments @ say 6% 21 million per year I heard quoted on the radio 25 million What beats me is how they can ever possibly hope to repay the borrowings when the annual sales revenue for the MEA is about 35 million per year. These figures do not stack up!!!!!!!!!!!!!!!! If they trade in just electric and electrical goods with a population of 75 thousand there is no chance of ever repaying the loan and only a small chance of meeting the intrest payments. My view is that we are seriously in the manure. <{POST_SNAPBACK}> Maybe they are going to sell electricity to the U.K to raise some profit? Billy, I think you are right. SERIOUS MANURE! Link to comment Share on other sites More sharing options...
P.K. Posted March 21, 2005 Share Posted March 21, 2005 Intrest payments @ say 6% 21 million per year I heard quoted on the radio 25 million What beats me is how they can ever possibly hope to repay the borrowings when the annual sales revenue for the MEA is about 35 million per year. These figures do not stack up!!!!!!!!!!!!!!!! If they trade in just electric and electrical goods with a population of 75 thousand there is no chance of ever repaying the loan and only a small chance of meeting the intrest payments. <{POST_SNAPBACK}> Clearly this is completely wrong. In order to secure loans of around £350 Million the MEA would have to convince the banks that their business plan was viable to continue running their business, repaying the interest and also repaying the capital over a certain period. If all those things were not in place then they could NEVER have obtained the loans. No bank would loan amounts like that to an untenable business unless they were either sure of the investment or could call in guarantees with penalties in the event it bellies up. Ooerrr................ - Link to comment Share on other sites More sharing options...
Paul H Posted March 21, 2005 Share Posted March 21, 2005 <{POST_SNAPBACK}> Clearly this is completely wrong. In order to secure loans of around £350 Million the MEA would have to convince the banks that their business plan was viable to continue running their business, repaying the interest and also repaying the capital over a certain period. If all those things were not in place then they could NEVER have obtained the loans. No bank would loan amounts like that to an untenable business unless they were either sure of the investment or could call in guarantees with penalties in the event it bellies up. Ooerrr................ - <{POST_SNAPBACK}> But look at the loans they managed to secure for the companies set up under the MEA? These companies I suppose had the personal guarantees of the directors? I think not, because non of the directors could underwrite such loans. So where did they get the surety for that? I think there is an issue with the lending banks here in regulations relating to responsible lending. Link to comment Share on other sites More sharing options...
crumlin Posted March 21, 2005 Share Posted March 21, 2005 The MEA secured the loans by using the Governments AAA rating, this rating is now in doubt, thats what all the fuss has been about. Link to comment Share on other sites More sharing options...
Paul H Posted March 21, 2005 Share Posted March 21, 2005 The MEA secured the loans by using the Governments AAA rating, this rating is now in doubt, thats what all the fuss has been about. <{POST_SNAPBACK}> But if these are stand alone companies surley someone with authority within Government must of given permision for them to use the AAA rating and the government must of been fully aware? Sorry, I just don't get it Link to comment Share on other sites More sharing options...
crumlin Posted March 21, 2005 Share Posted March 21, 2005 The MEA secured the loans by using the Governments AAA rating, this rating is now in doubt, thats what all the fuss has been about. <{POST_SNAPBACK}> But if these are stand alone companies surley someone with authority within Government must of given permision for them to use the AAA rating and the government must of been fully aware? Sorry, I just don't get it <{POST_SNAPBACK}> Government did know, but cant take the flack now its gone tits up. On Manx Radio they said that the interest payments for this year amounted to£27-3 million, the £50 they now want is to meet the interest payments and working capital. Tha damage is done and like aways they taxpayer foots the bill or Government goes bust. The UK Government must be loving this, just waiting to bail the Island out EDIT: fixed quotes Link to comment Share on other sites More sharing options...
Billy One Mate Posted March 21, 2005 Author Share Posted March 21, 2005 Spot on Crumlin, that is my understanding also. The Banks recieved the comfort of the IOM Government investment rating, which does put doubt on the Council of Ministers stating that they were unaware of the loan. As I stated before this is extremely serious andnot just another storm in a tea cup. Link to comment Share on other sites More sharing options...
Fatty Posted March 21, 2005 Share Posted March 21, 2005 Work it out, borrowings to date; Initial loan 180 million Second loan 120 million Future loan 50 million Total 350 million Intrest payments @ say 6% <{POST_SNAPBACK}> Ah, i see where you're coming from... But, the first 180 mill... Wasn't that a government bond, surely that won't be at 6%, would it, other wise why bother with it? Also, i know this extra £50 mill has made the press/radio etc, but i think i must have missed something... Have they actually asked for it?? Or is this a figure that some one has said they need just to stay in business? On another more interesting note, i found this web site that may be of interest... http://www.windsave.com/index.htm One of those would cut the cost of the house hold power bill... Link to comment Share on other sites More sharing options...
Billy One Mate Posted March 21, 2005 Author Share Posted March 21, 2005 Fatty as I stated "future loan" 50 million. However this was stated by Alan Bell as being needed by the MEA, which he confirmed in Tynwald. Yes the first 180 million was supposedly a bond similar to what was obtained by the Water Authority but as it is being reported in the media that 25 million is the interest payment my 6% PA appears to be near the mark. We are not talking about small change here but a national debt of considerable magnitude which will have to be paid off by an Economy that is currently just able to support its current comitments. I thought I should also add that if we all get wind turbines for our roofs the MEA will struggle to get enough money for their Christmas Parties let alone the interest repayments. Link to comment Share on other sites More sharing options...
FCMR Posted March 21, 2005 Share Posted March 21, 2005 If the MEA is in such a mess and cant pay its bills, then they are breaking the law, its against the law to trade if insolvent. Any person that feels that the MEA are insolvent can make a complaint to the Companies Registra, who then has to take action. Link to comment Share on other sites More sharing options...
Paul H Posted March 22, 2005 Share Posted March 22, 2005 "Government did know, but cant take the flack now its gone tits up. On Manx Radio they said that the interest payments for this year amounted to£27-3 million, the £50 they now want is to meet the interest payments and working capital. Tha damage is done and like aways they taxpayer foots the bill or Government goes bust. The UK Government must be loving this, just waiting to bail the Island out" If this is the case it looks as though potentially the current Government of the Isle of Man might be the last. Well, thanks a bunch Tynwald. It’s not your property to jeopardise, and don’t you forget it! The reality is that whatever the outcome, the public of the Isle of Man are going to financially worse off. What did we do to deserve this? Not one of them (MHKs) has had the decency to be ‘transparent’ about the situation and offer a satisfactory explanation as to what has gone wrong. I expect to hear apologies and see resignations very soon. This must be followed by immediate and decisive action to limit any further damage and try to safeguard the island’s financial status. If the power station was the only capital project blunder we as the public might be a little more forgiving. But I strongly suspect that public forgiveness won’t extend to the Iris Scheme, the new Noble’s Hospital, the Incinerator, the ‘Wedding Cake’, Ned’s, Mount Murray, Gas Pipeline, Underwater Cable, etc, etc. This many mistakes are inexcusable let alone forgivable Link to comment Share on other sites More sharing options...
manxman8180 Posted March 22, 2005 Share Posted March 22, 2005 Work it out, borrowings to date; Initial loan 180 million Second loan 120 million Future loan 50 million Total 350 million Intrest payments @ say 6% 21 million per year <{POST_SNAPBACK}> I get what you're saying, but it depends how you calculate the interest. For instance, I would doubt it would be a variable rate like a credit agreement or mortgage. It would be at an agreed fixed rate IMO. When you get a fixed rate bank loan the amount of interest is calculated and added at the start of the loan. So taking the potential total of £350 million at 6% works out like this: 350,000,000 21,000,000 (6% interest) 371,000,000 (these figures will not, or course, be exactly correct owing to the nature of either compound or simple interest rates, but, frankly I can't be arsed working my head that much) Paid back over (? don't know?) 10 years = 37.1 million pa 15 years = 24.73 million pa 20 years = 18.55 million pa So maybe the repayment period is 15 years going by the reports. Hence my wondering about the reported 27million interest only payments. It's still an effing disgrace, but it may appear a little more manageable with more realistic figures. Link to comment Share on other sites More sharing options...
When Skies Are Grey Posted March 22, 2005 Share Posted March 22, 2005 If the MEA is in such a mess and cant pay its bills, then they are breaking the law, its against the law to trade if insolvent. Any person that feels that the MEA are insolvent can make a complaint to the Companies Registra, who then has to take action. <{POST_SNAPBACK}> Thats not strictly true...trading when insolvent only occurs if the company has insufficient income to meet its debts when they fall due or when the value of its assets is less than its liabilities. Without sight of a balance sheet it would be difficult to assess whether latter would also be the case. Under the insolvency act the Directors of a Company can be held personally liable for the debts of a company if it continues to trade whilst there is "no longer any reasonable prospect of avoiding insolvency". This is known as misfeasance in so far as the duty of fiduciary care is breached by the Director(s). Link to comment Share on other sites More sharing options...
FCMR Posted March 22, 2005 Share Posted March 22, 2005 Work it out, borrowings to date; Initial loan 180 million Second loan 120 million Future loan 50 million Total 350 million Intrest payments @ say 6% 21 million per year <{POST_SNAPBACK}> I get what you're saying, but it depends how you calculate the interest. For instance, I would doubt it would be a variable rate like a credit agreement or mortgage. It would be at an agreed fixed rate IMO. When you get a fixed rate bank loan the amount of interest is calculated and added at the start of the loan. So taking the potential total of £350 million at 6% works out like this: 350,000,000 21,000,000 (6% interest) 371,000,000 (these figures will not, or course, be exactly correct owing to the nature of either compound or simple interest rates, but, frankly I can't be arsed working my head that much) Paid back over (? don't know?) 10 years = 37.1 million pa 15 years = 24.73 million pa 20 years = 18.55 million pa So maybe the repayment period is 15 years going by the reports. Hence my wondering about the reported 27million interest only payments. It's still an effing disgrace, but it may appear a little more manageable with more realistic figures. <{POST_SNAPBACK}> Interest is added on each year so on the basic sums the interest would be £21million per year and over ten years = £210million, add this to the capital sum =£560 million = £56million per year to be paid back. The MEA dont earn that sort of money so whats the outcome. With a population of about 75000 it means every man, woman and child would have to pay £746 per anum to cover the dept and this would be on top of the electric bills Link to comment Share on other sites More sharing options...
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