Monday, April 21, 2008

More snags for Lightning sale

With prospective owner Oren Koules still trying to secure the necessary financing - which at this point might even include current owners Palace Sports and Entertainment as a potential lender - the direction the team takes on the ice is not defined.
Oren Koules, the prospective buyer of the Tampa Bay Lightning, has lost his second lender in three months as the global credit crisis continues to take its toll on sports financing.

CIT Group, which finance sources said had appeared ready to lend Koules up to $110 million, backed out earlier this month. This follows the loss of a pending loan earlier this year from Société Générale, which abruptly exited the sports business and scuttled an oral agreement with the Hollywood movie producer....

“It is fair to say that the financial markets are strained, as we speak, and we will look to help with the financing of a portion of the purchase price,” wrote Tom Wilson, chief executive officer of Palace Sports & Entertainment, which owns the Lightning, in an e-mail. “The deal is still on.”
The seller becomes the lender? Interesting arrangement.



At 2:17 p.m., April 21, 2008, Blogger J. Michael Neal said...

The seller becomes the lender? Interesting arrangement.

Why not? It's what Citigroup did with a couple of billion worth of Chrysler debt. Maybe the Lightning will be sold for 72 cents on the dollar, too.

At 2:43 p.m., April 21, 2008, Anonymous Anonymous said...

That's called vendor financing.
When money gets tight at the banks, motivated sellers sometimes have to agree to become the lender.
The term would be shorter and the interest rate would be higher than the bank would offer, to account for the risk.
Often, the vendor later sells the debt at a discount, in order to cash out of the deal.
It's coming soon to a depressed subdivision near you.

At 3:11 p.m., April 21, 2008, Anonymous Anonymous said...

Now I know why Stamkos had a face on him like he envied the dead when the Lightning won the draft lottery.
The Lightning have come full circle.
Starting out as a penniless under financed franchise to a penniless under financed franchise.
Is Jim Balsillie lurking anywhere?


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