CIG deal with Coutts & Co?

Turrican187 · June 2017

I heard a rumor that CIG made a Bank deal for a loan at Coutts, and that they securing it with the whole IP, all assets and basically everything. On top of that the deal has a licence that Coutts is allowing CIG to develop the game further on as long as the loan exist.

That sounds a bit harsh, especially when CIG has gathered so much money up to date.
I mean there are so many things that go wrong, to put the complete IP on risk is ... uhmmm

Any infos or thoughts on this?

Excession · June 2017

If you believe DS, yes.
Loan details here

Babuinix · June 2017

It's called leveraging your wealth.

Coutts & Co. Is a bank for the elite. Actually not just a bank, but a wealth management bank.

They manage the fortune of the the British Royal Family for example.

You have to have at least £1,000,000 in tangible assets, and even then they are extremely picky about the clients they take on.

So what this show's is that CIG is a company with solid accounting and that's why one of the oldest banks in world is whiling to give them money.

Ofc that derek shart and the rest of it's entourage of trolls will try to spin it into something negative lol.

Such is the life of the miserable of spirit.

But hey at least we get some laughs from it, that's better than nothing imo.

MaxBacon · June 2017

>> UPDATE: CIG HAS JUST RESPONDED AND CLARIFIED THIS:

https://robertsspaceindustries.com/spectrum/community/SC/forum/1/thread/re-uk-tax-rebate-advance-for-foundry-42

"We have noticed the speculations created by a posting on the website of UK’s Company House with respect to Coutt’s security for our UK Tax Rebate advance, and we would like to provide you with the following insight to help prevent some of the misinformation we have seen.

Our UK companies are entitled to a Government Game tax credit rebate which we earn every month on the Squadron 42 development. These rebates are payable by the UK Government in the fall of the next following year when we file our tax returns. Foundry 42 and its parent company Cloud Imperium Games UK Ltd. have elected to partner with Coutts, a highly regarded, very selective, and specialized UK banking institution, to obtain a regular advance against this rebate, which will allow us to avoid converting unnecessarily other currencies into GBP. We obviously incur a significant part of our expenditures in GBP while our collections are mostly in USD and EUR. Given today's low interest rates versus the ongoing and uncertain currency fluctuations, this is simply a smart money management move, which we implemented upon recommendation of our financial advisors.

The collateral granted in connection with this discounting loan is absolutely standard and pertains to our UK operation only, which develops Squadron 42. As a careful review of the security will show and contrary to some irresponsible and misleading reports, the collateral specifically excludes “Star Citizen.” The UK Government rebate entitlement, which is audited and certified by our outside auditors on a quarterly basis, is the prime collateral. Per standard procedure in banking, our UK companies of course stand behind the loan and guarantee repayment which, however, given the reliability of the discounted asset (a UK Government payment) is a formality and nothing else. This security does not affect our UK companies’ ownership and control of their assets. Obviously, the UK Government will not default on its rebate obligations which will be used for repayment, and even then the UK companies have ample assets to repay the loan, even in such an eventuality which is of course unthinkable.

This should clarify the matter. Thank you. "

Turrican187 · June 2017

That's fine but why has the bank to allow CIG to develop further if CIG still owns the IP and just loose it when they are not paying?
There seems to be a term that Coutts is ALLOWING CIG "to develop, produce, exploit and otherwise deal with the Game."
This allowance expires if they can not pay.

Furthermore what happens if any other studio needs financial support from a bank. All stuff that they've got or will get in the future are covered.

@babunix Sure Coutts is dealing with them if the line is at 1,000,000.00$, CIG should be worth more than that

Didn't they do the whole Crowdfunding / Presale stuff to be independent of any Investors/Bankers/Publishers? They've got 150million Dollar now, how much more do they need?

MaxBacon · June 2017

Turrican187 said:

That's fine but why has the bank to allow CIG to develop further if CIG still owns the IP and just loose it when they are not paying?
There seems to be a term that Coutts is ALLOWING CIG "to develop, produce, exploit and otherwise deal with the Game."
This allowance expires if they can not pay.

Furthermore what happens if any other studio needs financial support from a bank. All stuff that they've got or will get in the future are covered.

If you're taking that out of reading people that read it we might be missing context and clarity to that.

In a contract like this CIG owns everything, the bank only stands the right if they miss payments, they stand no right over the Company and IPs if the payments are met. Only if they owned CIG they would be able to control them like that, so it feels like just a clarification and not a term where they own CIG and need to state that to allow them to develop the game.

Kefo · June 2017

MaxBacon said:

From FQ42's financials, they have taken loans since 2015. The difference between that and this last one is that the guarantees given to the bank are of the IP itself.

But that is highly irrelevant because they do have a constant stream of funding, independent of what they need the loan for, so they don't run the risk of failing the contract.

This is pretty much the alternative of getting behind a Publisher, but a publisher means interference in the game's development and decision-making (over wanting its money back + profits cut) while the bank is just interested in being paid back.

Likely covering operating costs at a longer term (side of the crowdfunding); they could have gone with layoffs to scale the costs to income but they are not doing that.

That's not the best argument in the world to be honest. Their constant stream of funding is from backers, who may or may not become pissed off at this and choose to stop funding.

I thought all money coming from backers was to be put directly to game dev but I guess it's now going to paying off the loan cause yeah if they default then there goes everything this company owns.

The difference between getting behind a publisher and getting behind a bank is that if the publisher gets unhappy they just force you to release early and you patch it in later but a bank getting unhappy means they just seize all assets and tell everyone to go fuck themselves as they sell everything off to the highest bidder

Babuinix · June 2017

@babunix Sure Coutts is dealing with them if the line is at 1,000,000.00$, CIG should be worth more than that

Didn't they do the whole Crowdfunding / Presale stuff to be independent of any Investors/Bankers/Publishers? They've got 150million Dollar now, how much more do they need?

Well but they are still independent, they are just leveraging their wealth, CIG as been working with Coutts since 2015 and they have said several times now that they have funding coming in from other sources than the backers.

They don't have 150 million dollar, they have raised almost 153$ millions from backer pledges alone. How much they have in total now is undisclosed as it should be.

MaxBacon · June 2017

Kefo said:
That's not the best argument in the world to be honest. Their constant stream of funding is from backers, who may or may not become pissed off at this and choose to stop funding.

I thought all money coming from backers was to be put directly to game dev but I guess it's now going to paying off the loan cause yeah if they default then there goes everything this company owns.

The difference between getting behind a publisher and getting behind a bank is that if the publisher gets unhappy they just force you to release early and you patch it in later but a bank getting unhappy means they just seize all assets and tell everyone to go fuck themselves as they sell everything off to the highest bidder

There's no way that the funding stream is stopping anytime soon, either way you might see it. If it might decay over time but even so it's still dozens of millions coming in per year.

I actually think CIG might see increases in funding with the release in 3.0 and beyond the delivery rate is higher than it ever was before.

If it's about money then the bank is the solution.

Remember a Publisher is also a sort of loan, not only do they want their money back they also want a cut of profits, as they do interfere with the development and decision-making. The bank has no right to get unhappy as long they pay the loan they made over time.

Turrican187 · June 2017

Babuinix said:

They don't have 150 million dollar, they have raised almost 153$ millions from backer pledges alone. How much they have in total now is undisclosed as it should be.

That's what I meant. However as per Kickstarter rules they should have opened their books by now ... but that's something completly different.

Turrican187 · June 2017

MaxBacon said:

Turrican187 said:

That's fine but why has the bank to allow CIG to develop further if CIG still owns the IP and just loose it when they are not paying?
There seems to be a term that Coutts is ALLOWING CIG "to develop, produce, exploit and otherwise deal with the Game."
This allowance expires if they can not pay.

Furthermore what happens if any other studio needs financial support from a bank. All stuff that they've got or will get in the future are covered.
If you're taking that out of reading people that read it with selective bias we might be missing context and clarity to that.
[...]

Maybe the original document will help.
https://beta.companieshouse.gov.uk/company/08815227/charges/W3FsufjDb8gTRZZqoCvnEAJKzSk
View the 29 page PDF Its on Page 16 under "24. LICENSE"

Babuinix · June 2017

Turrican187 said:

Babuinix said:

They don't have 150 million dollar, they have raised almost 153$ millions from backer pledges alone. How much they have in total now is undisclosed as it should be.

That's what I meant. However as per Kickstarter rules they should have opened their books by now ... but that's something completly different.

What kickstarter rules?

Game is in active development they don't have to show shit about their financials lol

Turrican187 · June 2017

MaxBacon said:
[...]
The bank has no reasons to get unhappy, all they want is their money paid back.

All those happy bankers everywhere

SCNR

Kefo · June 2017

MaxBacon said:

Kefo said:
That's not the best argument in the world to be honest. Their constant stream of funding is from backers, who may or may not become pissed off at this and choose to stop funding.

I thought all money coming from backers was to be put directly to game dev but I guess it's now going to paying off the loan cause yeah if they default then there goes everything this company owns.

The difference between getting behind a publisher and getting behind a bank is that if the publisher gets unhappy they just force you to release early and you patch it in later but a bank getting unhappy means they just seize all assets and tell everyone to go fuck themselves as they sell everything off to the highest bidder

There's no way that funding stream is stopping anytime soon, either way you might see it. If it might decay over time but even so it's still dozens of millions coming in per year.

If it's about money then the bank is the solution.

Remember a Publisher is also a sort of loan, not only do they want their money back they also want a cut of profits, as they do interfere with the development and decision-making. The bank has no reasons to get unhappy, all they want is their money paid back.

Yeah but a publisher won't kick you out of your building and sell everything to whoever wants it if you don't release a game on time.

There's a clause that states the chargee grants the chargor exclusive rights to develop, produce, exploit and deal with the game. If the chargor defaults then they no longer have the license which means no working on the game. That doesn't sound like something a publisher would do

donger56 · June 2017

MaxBacon said:

From FQ42's financials, they have taken loans since 2015. The difference between that and this last one is that the guarantees given to the bank are of the IP itself.

But that is highly irrelevant because they do have a constant stream of funding, independent of what they need the loan for, so they don't run the risk of failing the contract.

Constant stream of funding huh? They only have funding as long as people keep throwing money at them for something that doesn't exist yet. That stream can very quickly reverse flow if people start losing confidence in the project. This would actually be a great way for Roberts and his crew to eject from the project. Take out a huge loan, cash out, default on the loan and dump the entire company off to the creditors. Then he has the perfect excuse to disappear. The truth is no one really knows how much money they have raised or how much has been spent because they have no obligation to do so. Only time will tell, but the longer this goes on for, the bigger disaster this is going to be if it doesn't pan out.

Kefo · June 2017

donger56 said:

MaxBacon said:

From FQ42's financials, they have taken loans since 2015. The difference between that and this last one is that the guarantees given to the bank are of the IP itself.

But that is highly irrelevant because they do have a constant stream of funding, independent of what they need the loan for, so they don't run the risk of failing the contract.

Constant stream of funding huh? They only have funding as long as people keep throwing money at them for something that doesn't exist yet. That stream can very quickly reverse flow if people start losing confidence in the project. This would actually be a great way for Roberts and his crew to eject from the project. Take out a huge loan, cash out, default on the loan and dump the entire company off to the creditors. Then he has the perfect excuse to disappear. The truth is no one really knows how much money they have raised or how much has been spent because they have no obligation to do so. Only time will tell, but the longer this goes on for, the bigger disaster this is going to be if it doesn't pan out.

And when CR comes back in another 10-20 years to try and develop another game he will be blasting those evil publishers AND banks this time around lol

MaxBacon · June 2017

Turrican187 said:
Maybe the original document will help.
View the 29 page PDF Its on Page 16 under "24. LICENSE"

As I also posted "it feels like just a clarification and not a term where they own CIG and need to state that to allow them to develop the game."

If that wasn't the case the contract would have some implication over their ownership over the company.

Turrican187 said:
All those happy bankers everywhere SCNR

It's true though, they don't care about anything else but getting the loan they granted paid back, and as long that's met then you indeed have happy bankers, even if that's a rare sight now isn't it

Kefo · June 2017

Turrican187 said:

MaxBacon said:

Turrican187 said:

That's fine but why has the bank to allow CIG to develop further if CIG still owns the IP and just loose it when they are not paying?
There seems to be a term that Coutts is ALLOWING CIG "to develop, produce, exploit and otherwise deal with the Game."
This allowance expires if they can not pay.

Furthermore what happens if any other studio needs financial support from a bank. All stuff that they've got or will get in the future are covered.
If you're taking that out of reading people that read it with selective bias we might be missing context and clarity to that.
[...]

Maybe the original document will help.
https://beta.companieshouse.gov.uk/company/08815227/charges/W3FsufjDb8gTRZZqoCvnEAJKzSk
View the 29 page PDF Its on Page 16 under "24. LICENSE"

Well max was right about the selective bias but he probably didn't think he was talking about himself lol

MaxBacon · June 2017

Kefo said:
Yeah but a publisher won't kick you out of your building and sell everything to whoever wants it if you don't release a game on time.

There's a clause that states the chargee grants the chargor exclusive rights to develop, produce, exploit and deal with the game. If the chargor defaults then they no longer have the license which means no working on the game. That doesn't sound like something a publisher would do

That's irrelevant, they stand no right on the company whatsoever if the loan keeps being paid back. Just like a house mortgage...

MaxBacon · June 2017

donger56 said:
Constant stream of funding huh? They only have funding as long as people keep throwing money at them for something that doesn't exist yet. That stream can very quickly reverse flow if people start losing confidence in the project. This would actually be a great way for Roberts and his crew to eject from the project. Take out a huge loan, cash out, default on the loan and dump the entire company off to the creditors. Then he has the perfect excuse to disappear. The truth is no one really knows how much money they have raised or how much has been spent because they have no obligation to do so. Only time will tell, but the longer this goes on for, the bigger disaster this is going to be if it doesn't pan out.

The constant stream of funding is ongoing, you saying it can quickly reverse flow is pure speculation.... speculation that doesn't quite fit the current development reality, especially the in near/medium-term future.

Not only 3.0 is at the door this year, the delivery rate is higher than it ever was before, the likeness of a severe drop in funding anytime soon is not something I would ever bet on currently. If anything the project might be seeing one increase in funding (this year comparing to the previous) post-3.0. To be seen.

Kefo · June 2017

MaxBacon said:

Kefo said:
Yeah but a publisher won't kick you out of your building and sell everything to whoever wants it if you don't release a game on time.

There's a clause that states the chargee grants the chargor exclusive rights to develop, produce, exploit and deal with the game. If the chargor defaults then they no longer have the license which means no working on the game. That doesn't sound like something a publisher would do

That's irrelevant, they stand no right on the company whatsoever if the loan keeps being paid back. Just like a house mortgage...

except it sounds like they already have the right to it based on that license clause. But aside from that you're right as long as the loan is being paid back but ask yourself this.

If they don't have enough coming in now to keep going so they needed to take out a loan then how exactly are they going to keep going and pay back a loan at the same time especially when their funding stream is dependant on other people throwing money at them

Babuinix · June 2017

Anyone expecting a decline in funding or backers will clearly hasn't been paying attention lol

[mod edit]

Turrican187 · June 2017

What I basically can not understand is why the hell the WHOLE company ... all IP, all digital and physical assets.
And it is a risk, what if funding stagnates, what if there is another global banking crisis - they are putting >400 jobs at risk - there are too many things that can happen and they wont get any other financial support because they went all-in on one card.

Turrican187 · June 2017

MaxBacon said:

Kefo said:
Yeah but a publisher won't kick you out of your building and sell everything to whoever wants it if you don't release a game on time.

There's a clause that states the chargee grants the chargor exclusive rights to develop, produce, exploit and deal with the game. If the chargor defaults then they no longer have the license which means no working on the game. That doesn't sound like something a publisher would do

That's irrelevant, they stand no right on the company whatsoever if the loan keeps being paid back. Just like a house mortgage...

But I don't need a mortgage if I have enough money

Babuinix · June 2017

Turrican187 said:

What I basically can not understand is why the hell the WHOLE company ... all IP, all digital and physical assets.
And it is a risk, what if funding stagnates, what if there is another global banking crisis - they are putting >400 jobs at risk - there are too many things that can happen and they wont get any other financial support because they went all-in on one card.

No they really aren't lol, they are leveraging their fortune to have acess to more money a will most likely hire more 100+ people in the next years. Their head count keeps growing and growing and they have people all over the world working on the game. Frankfurt Studio will probably become as big as the UK one in a couple of years.

MaxBacon · June 2017

Kefo said:
except it sounds like they already have the right to it based on that license clause. But aside from that you're right as long as the loan is being paid back but ask yourself this.

If they don't have enough coming in now to keep going so they needed to take out a loan then how exactly are they going to keep going and pay back a loan at the same time especially when their funding stream is dependant on other people throwing money at them

That would mean they own CIG, what is not the case neither is stated in that contract, so all that matters is paying the loan back, the bank can't interfere as they wish if the contract isn't breached.

I don't have to even consider that because I know CIG has the the crowdfund as a counterbalance, this is not a company that has no money flow that has to ask for a loan and work to complete a product to then pay the bank back from its sales. The risk this involves is the same as it is without the loan, the dependency on the crowdfund is what created the company in the first place.

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