Assuming CIG default on their payment. In theory, if the UK pays the tax rebate, that won’t happen. And if you believe in what Ortwin said, would UK default on the tax rebate, CIG would still have the resources in their US parent company to pay the loan.
The problem is if CIG defaults (and doesn’t try to fix it in 60 days). If the company is financially sound (or close to it), that would be very unlikely. We’ll have to wait and see.
There’s also the possibility that CIG actually loaned more than the tax rebate value, since we don’t know the actual values negotiated in the loan. But I personally find that unlikely.
For me, the point about the loan is that it’s weird. It raises a lot of questions:
- They had tax rebates before and never needed a loan. Why now?
- Why is the collateral so big/potentially risky?
- Why go for that specific bank?
- Why the sudden need for liquidity?
It’s weird. Maybe it’s nothing, but it still feels weird to me.
Despite the misgivings I aired previously about their ability to crowdfund record amounts in perpetuity, their total 2017 pledge revenue is tracking almost perfectly with that of 2016 thus far.
Where did that data come from?
mok
3948
LOL look at the 2 week hourly income. Pledges spike when this latest news came out. Again, controversy funds this project.
EDIT: ok so they were also selling a special ship…
This is the spreadsheet that @Juan_Raigada linked in the thread previously. I assume it’s someone (or a group of people) manually updating the spreadsheet with data from https://robertsspaceindustries.com/funding-goals each day.
Well, assuming the data is true, then it only makes things even weirder. If CIG has the same monthly revenue as last year, why would they need a loan now? Also, the pound has lost a lot of value compared to the dollar, with a huge down spike happening at about this time of the year in 2016. So converting money from US to pound is actually better now than it was a year ago, and yet, no loans needed last year.
Something doesn’t add up. It’s weird and it only gets weirder.
Of course, if the data is not true, that would explain a lot of the weirdness.
Coutts claims to specialise in media banking (historically they were a private bank for wealthy individuals, but they do some commercial lending). I don’t know how true that is, or what proportion of UK games company lending they represent, but there you go.
OBJECTION!
Sorry, I couldn’t resist. Are you a lawyer by any chance? Because your avatar always makes me think you are. :)
Project Cars is wonderful. I paid 25 euros and already got some 80 back over the years. Very cool.
No, though I do write about legal issues a fair bit.
Coutts has always had a bit of a hand in tax-driven financing, naming no film LLPs relying on limited recourse loans.
But, TBH, it seems like a perfectly reasonable bit of factoring to do to match the cashflows between the tax relief and the spending generating the relief, particularly with short term interest rates being so low right now. The main risk, of course, is HMRC scrutinising and delaying the claim, but that should be a matter of timing and quantum rather than getting it delayed completely, and, again, with interest rates so low…
[quote=“rhamorim, post:3950, topic:74635, full:true”]Of course, if the data is not true, that would explain a lot of the weirdness.
[/quote]
I think it’s a script tracking the information from the SC page, so the data is good as long as the official funding page provides truthful info, and the wild swing we can see, apparently not hiding away bad months seem to suggest the info is mostly accurate (I don’t know if they take away returns, for example).
But yeah, the spreadsheet is the best resource we have so far to track crowdfunding for the project. I’ve checked the spreadsheet about 10-15 times (normally around “news” about the project like this) and it’s always been 100% accurate to the official funding page.
Hmmm, that’s a good point. If interest rates are much lower than they were last year, a loan could become an interesting option. It’s still weird, but that would make it far less weird, especially if the added collateral contributes to lowering the interest rates even further.
Timex
3958
Just so I’m clear, they’re primarily borrowing against the expected government payment, right? Similar to borrowing against your accounts receivable? I’m honestly not really digging into it much, so maybe I misinterpreted that, but I thought that was the primary basis for the loan.
Yeah, a script would make more sense, as that would be the only way to get an accurate citizen and fleet count at the conclusion of each day.
Ortwin says the loan was intended to work as an “advancement” of sorts of the expected government payment, but if that was the sole primary basis for the loan, it makes sense that it would also be the only collateral. The collateral though goes way beyond that, which may mean any number of things.
Timex
3961
Ya, so they were basically borrowing against the government payment. Any additional collateral would likely just improve the interest rate, although without seeing the actual terms of the loan it’s all just speculation I guess.
Either way, whatever. Seems like another “red flag” which was supposed to put CIG out of business last year… and the year before that. I’ll continue to look forward for the upcoming 3.0 release, which looks pretty sweet. I think that stuff is slated for the PTU next month.
No such thing happened last year or the year before that. And “red flags” are just an indication that something might be wrong, not something that puts companies out of commission by itself.
Well, Chris said 3.0 was coming out by the end of last year, so it’s only 7-8 months late. And who knows if the 3.0 coming out will have the (by then) promised featureset. But hey, no red flags there. At all. (For the record, I do hope it comes out soon and shows some real progress)
Timex
3963
Ya, it was just other things that supposedly spelled out the doom and bankruptcy for CIG.
LIke I said, I’m not real worried. I think part of it is that in the absolute worst case, I simply don’t get to play what was going to be a cool game. It’s not some kind of life changing event either way.
Ya, I seem to recall that they juggled stuff around a bit in terms of what was going in different releases.
Well, the current development status looks like they’re on track with the thing going to the Evocati PTU in a few weeks, and the PTU later in the month. The set of stuff which is either complete or feature complete seems pretty solid at this point.
As Timex pointed out, the development is pretty open and you can check progress against milestones for yourself. It’s certainly a lot more open and transparent than the development I do day in day out.
