Bobc
Well-Known Member
Now in liquidation I hear. What a shame.
Discovery Yachts gone
- Thread starter Bobc
- Start date
Blue Sunray
Well-Known Member
So it would seem 100 jobs at stake as bank refuses yacht builder £3m coronavirus loan.
It rather looks like their nasty scheme to avoid their damages liability didn't work out after all.
What's going on at Discovery yachts?
It rather looks like their nasty scheme to avoid their damages liability didn't work out after all.
What's going on at Discovery yachts?
dom
Well-Known Member
And I thought long-term capital was generally provided by shareholders and bond lenders not banks. I'm afraid that local MP is making a bit of a fool of himself here; Discovery appears to be chancing its arm and Santander has read the play.
From the article you linked:
New Forest East MP Julian Lewis has blasted the bank’s decision, saying: “Santander is badly failing a company in my constituency when 100 jobs are at stake. What we are finding here is that older banking habits die hard and they are not adapting to the crisis when there are companies trying to survive. It’s very hard to see why the bank is completely unhelpful in a situation as urgent and extreme as the current one.”
Discovery Shipyard’s managing director John Burnie told the A&T he believed the loan decision was “unfair”. He claimed it was based on financial problems which a small, former part of the firm suffered in 2019 under different management. He stressed its immediate future was not at risk, saying: “The loan we have asked for is to help us in the long-term."
Frogmogman
Well-Known Member
It's still a sad day for the employees.
Blue Sunray
Well-Known Member
That's more than a trifle disingenuous as well.
Lucy52
Well-Known Member
The MP may well know, but has to be seen to be supporting his constituents. Why let a small trifle get in the way of re-election.
dom
Well-Known Member
A bit if a bugbear of mine, but the latest Bank of England/UK Government blue-light Debt Service is part of a trend which enables free-market democracies to operate on ever-thinner quantities of risk capital. This brings obvious benefits to shareholders and other asset holders, which in turn contributes to the wealth gaps we see today.
This debt model is ultimately not sustainable, any more than if I started to feed nitrous oxide into my old Merc. Politicians must stop getting suckered into the notion that any job-creating entrepreneur has a God-given right to accrue large returns on tiny slivers of risk capital.
There is a neat free-market solution: a new Government service which explains to investors how to operate those foldy leather thingies tucked into their back pockets!
This debt model is ultimately not sustainable, any more than if I started to feed nitrous oxide into my old Merc. Politicians must stop getting suckered into the notion that any job-creating entrepreneur has a God-given right to accrue large returns on tiny slivers of risk capital.
There is a neat free-market solution: a new Government service which explains to investors how to operate those foldy leather thingies tucked into their back pockets!
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doris
Well-Known Member
Oh so true Dom.
You could almost make me a pinko, well almost!!!
Praxinoscope
Well-Known Member
It's all too easy to lump in shareholders as part of the problem, most of us are shareholders in some form or other, if you have an insurance policy, pension or even rely upon council services, then you are relying upon the dividends that come from investments made by numerous companies and organisations.
Concerto
Well-Known Member
This thinking started in the 1960's as it made sense to borrow money and make it work for you and earn profits that would then pay the interest and overtime inflation made the value of capital to be paid back reduce as prices soared. Later in the 1980's the stock exchange became more of a massive gambling den with almost no regard to potential risks of failure. It was driven by short term gains rather than long term investment. Many of these people are now running our major companies on a wing and a prayer, even more today than 6 months ago. No wonder so many companies with little capital behind them will survive this closedown.
lw395
Well-Known Member
Isn't the real basic problem here more about the business not making a decent profit?
dunedin
Well-Known Member
Yes. And their relatively narrow customer base likely drying up due to both external and self created disasters.
They made some great boats. But sadly I had been wondering when (not if) this would arise.
1) All businesses with buildings, machinery and stock plus a small number of large orders are vulnerable to a cash flow shortage, even in normal times.
2) Add in a huge economic impact that will mean that many of their target customer base are themselves suddenly less affluent and/or have less liquidity - unable to sell their large houses, their businesses, or their stocks which might typically fund a £m dream boat purchase.
3) And the way they appeared to handle the dissatisfied customer with what seemed to be (unlike Oyster and Polina Star) relatively solvable QC issues, but (at least appeared to) chose to walk away and do a Phoenix instead. They didn’t seem to take much account of the likely impact on future customer confidence.
Every business leader must know that it takes years to build up a brand reputation, and just days to wreck one.
Let’s hope there is a white knight investor with masses of cash to burn who wants to take them over as a plaything to compete with the new Oyster. But that might be an optimistic outcome.
dom
Well-Known Member
To an extent, yes. But low profitability and iffy management can be opposite sides of the same debt coin.
Imagine I say to you:
dom: Hey lw395, fancy going halves on the London Gherkin for £750 million?
lw385: What analysis have you done?
dom: Nothing
lw395: Not on your nelly then
dom returns: I've a new plan, the BoE, banks and taxpayers will lend us £749, 990, 000; give me £5k and you own 50% of it
lw395: What's the catch?
dom: If it all goes tits, we've lost £5k each. However, if London real estate recovers we keep all the profit which might be ££££s
lw395: Great stuff dom, here's the dosh. BTW are you going to manage this building properly?
dom: Nah, not worth it, too busy looking for the next deal!
AndrewfromFal
Well-Known Member
On a more micro level their credit rating (from a supplier perspective) has apparently been in the toilet for a while. Supplier confidence was, I am told, not helped by the Discovery people they dealt with, who didn't seem to be strong in the arena of competence.
pvb
Well-Known Member
Wasn't Sean Langdon so lucky to sell his shareholding when he did? Great timing!
doris
Well-Known Member
Did he get anything for them?
pvb
Well-Known Member
Where did the shares come from which were sold to the crowdfunders for £2.2 million? He also sold another 20% of the company to Binti later.
Seven Spades
Well-Known Member
I can't find any confirmation of this.
Frogmogman
Well-Known Member
Seven Spades
Well-Known Member
I think that is the old company. I believe they are trading as Discovery Shipyard.
