Club Finances - new charge registered against club (Macquaire Bank Limited)

[Ricey]

Leicester City will announce later today that manager Brendan Rodgers has put pen to paper on a brand new 10 year contract, believed to be worth £19.4m a year.

[Nalis]

Next confirmation statement isnt due until November 2023 which is annoying 

 

Wonder if there is any investment behind the KP group itself?

[desertfox2]

11 minutes ago, stu said:

I was going to ask to those people with more financial knowledge that me, does this mean that the club is more or less likely to be up for sale at some point in the near future?

Hypothetically it would make it a lot easier to sell or bring in another party as a minority investor. Assuming KP have converted all of their debt to shares then basically it shows their total investment so far has been 194.24m. So any prospective buyer would just buy those 194.24m shares at a price agreeable to KP and then service the Macquaire Bank debt. Or a minority investor would inject cash and they would allocate a new share for every pound of investment. 

 

I think with the level of interest in football clubs at the moment from overseas as investments then it's quite likely Top has had quite a few enquiries. Hopefully he sticks around for a lot longer though.  

[turlo]

info from Kieran Maguire

 

 

 

 

 

 

 

Edited 1 February 2023 by turlo
typo

[Babylon]

1 hour ago, stu said:

I was going to ask to those people with more financial knowledge that me, does this mean that the club is more or less likely to be up for sale at some point in the near future?

I doubt it makes the slightest bit of difference, they aren’t bank loans or loans from a third party. They are loans directly from the owners, in which case they can negotiate how they see fit with any prospective buyer. And the prospective buyer can negotiate to get the loans gone!

[UHDrive]

3 hours ago, Babylon said:

As of last year what we owned KP and Top was £180m. So quite possibly coverted all of that debt into equity… which would be quite some statement. 
 

Doubt there would have been investment without a change to the directors etc. 

I'm not the most intelligent in this area but i know historically you have been. Can you tell me where does the money exist after its been moved I.e. who with and if it still exists on part of the KP's business? 

[UHDrive]

Could this have anything to do with wiping existing loans in order to free up new loans for the stadium expansion? 

[Mickyblueeyes]

It’s just good housekeeping. The value of the club is sufficient for what is effectively a write off. The owner is confident he’ll obtain some if not all return on the investment. I’ve criticised them recently but from their perspective - the owner/his board and CEOs strategy - it’s good business. 
 

The rumours earlier in the season that the club was up for sale because the club had met with corporate finance specialist is probably true - the club were getting valuations. Someone took that and added 2+2 and got 45. 
 

I also wouldn’t be surprised to see us in receipt of an outside investor in the near future. 

[StanSP]

It's still very high, but down from over 100% not so long ago. 

 

[moore_94]

https://www.lcfc.com/news/3043434
 

LCFC Chairman Provides Future Security With Debt-To-Equity Conversion

 

Leicester City Chairman Aiyawatt Srivaddhanaprabha has relieved the Club of its outstanding debts to its parent company, King Power International.

 

Over £194M in loans and related interest has been capitalised into equity issued to King Power International Co Limited (KPI), which is wholly owned by the Srivaddhanaprabha family. These loans have been provided by KPI to the Club over the last four years to fund the construction of the Club’s world-class new training ground at Seagrave and to continue to support the Club’s investments into its squad and Women’s football during the COVID-19 pandemic. Their conversion into equity serves to strengthen the Club’s balance sheet, reduce its interest costs, and provide further evidence of King Power International’s commitment to supporting the Club’s long-term sustainability.

 

It is the second time such a process has been undertaken since the family took ownership of Leicester City in 2010, having completed a £103M debt-to-equity transfer in 2013. In both cases it has ensured that all existing shareholder investment in the Club will not be carried forward as debt.

 

Leicester City Chairman Aiyawatt Srivaddhanaprabha said: “Maintaining long-term stability is vital for sustainable growth and a fundamental principle that has always guided our investments in the Club’s future. We want to make sure we continue on that path from the strongest, most secure financial footing.

 

“I believe with all my heart in Leicester City and what the Club can achieve for our fans, our people and our communities – in Leicester, Thailand and around the world. The faith they continue to place in us to run their Club responsibly with ambition and integrity guides our decision making and remains vital to us building on one of the most successful eras in the Club’s history.”

Edited 1 February 2023 by moore_94

[Chocolate Teapot]

15 minutes ago, StanSP said:

It's still very high, but down from over 100% not so long ago. 

 

Newcastle are going to be an interesting one to watch as can't imagine their revenue is going to grow that much.

[CosbehFox]

2 hours ago, st albans fox said:

Something else missed above is that if you’re looking to sell a business, being debt free is a plus. what usually happens is that the debt is taken of the valuation but there could be circumstances where you’d want the the deal to be done without any debt involved.   This is the least likely scenario but worth a mention.  Just occurred to me that if someone wants to buy into a business, having no debt is an even bigger plus. Now I’m intrigued…..

My thoughts 

[eblair]

4 minutes ago, Chocolate Teapot said:

Newcastle are going to be an interesting one to watch as can't imagine their revenue is going to grow that much.

strange new betting firms registered in saudi arabia (would you believe it) paying millions in advertising revenues 

 

FFP a farce

[Babylon]

39 minutes ago, UHDrive said:

I'm not the most intelligent in this area but i know historically you have been. Can you tell me where does the money exist after its been moved I.e. who with and if it still exists on part of the KP's business? 

The money had already been spent, so it's merely moving it around on paper I suppose. As it's no longer a loan they can't charge interest on it, can't demand payment... but it's their club at the end of the day and they have other ways of getting cash out. 

 

I'd rather it not be on the books as a loan than on it, but I'm not sure it makes a terrible amount of difference if they REALLY wanted to claw the cash back. I'd like to think it just shows their commitment to the club once again and the financial support they have provided. 

 

We just don't know the ins and outs, for all we know it could be a final bail out from the family, and after that no more (seeing as Vichais wife now seems to be in charge at KP and not Top).

[lcfcbluearmy]

7 minutes ago, eblair said:

strange new betting firms registered in saudi arabia (would you believe it) paying millions in advertising revenues 

 

FFP a farce

Think its over 3 years so as long as they either increase revenue or decrease wage over next couple of years that should be fine. 

 

However even if they so fall foul of the rules they will probably just get fancy lawyers to get them out of it or toothless prem/ uefa will only fine the 1 million

 

[lcfcbluearmy]

1 minute ago, Babylon said:

The money had already been spent, so it's merely moving it around on paper I suppose. As it's no longer a loan they can't charge interest on it, can't demand payment... but it's their club at the end of the day and they have other ways of getting cash out. 

 

I'd rather it not be on the books as a loan than on it, but I'm not sure it makes a terrible amount of difference if they REALLY wanted to claw the cash back. I'd like to think it just shows their commitment to the club once again and the financial support they have provided. 

 

We just don't know the ins and outs, for all we know it could be a final bail out from the family, and after that no more (seeing as Vichais wife now seems to be in charge at KP and not Top).

Could it potentially make it eisier for the club to get loans for other things instead such as the stadium expansion or further signings? 

[StriderHiryu]

19 minutes ago, Chocolate Teapot said:

Newcastle are going to be an interesting one to watch as can't imagine their revenue is going to grow that much.

A miscellaneous Saudi sponsor will back them for 200m sponsorship in the summer, just you watch. 

 

Man City have a betting sponsor for which there is no known address and seemingly don't even operate as a business. It's of course, swept under the carpet.

https://offthepitch.com/a/exclusive-another-manchester-city-sponsor-seemingly-no-staff-no-active-products-and-being-run-out

 

 

 

Edited 1 February 2023 by StriderHiryu

[UHDrive]

5 minutes ago, Babylon said:

The money had already been spent, so it's merely moving it around on paper I suppose. As it's no longer a loan they can't charge interest on it, can't demand payment... but it's their club at the end of the day and they have other ways of getting cash out. 

 

I'd rather it not be on the books as a loan than on it, but I'm not sure it makes a terrible amount of difference if they REALLY wanted to claw the cash back. I'd like to think it just shows their commitment to the club once again and the financial support they have provided. 

 

We just don't know the ins and outs, for all we know it could be a final bail out from the family, and after that no more (seeing as Vichais wife now seems to be in charge at KP and not Top).

Ahhh OK. So it's positives and negative. Appreciate that thanks.

[st albans fox]

28 minutes ago, Mickyblueeyes said:

It’s just good housekeeping. The value of the club is sufficient for what is effectively a write off. The owner is confident he’ll obtain some if not all return on the investment. I’ve criticised them recently but from their perspective - the owner/his board and CEOs strategy - it’s good business. 
 

The rumours earlier in the season that the club was up for sale because the club had met with corporate finance specialist is probably true - the club were getting valuations. Someone took that and added 2+2 and got 45. 
 

I also wouldn’t be surprised to see us in receipt of an outside investor in the near future. 

Hypothetically- I want to invest £150m into LCFC 

if the club owes KP £190m then what happens with my money when it’s invested ?  Theoretically it could be used to pay off the loan so I would be adjusting my shareholding in the business to take account of that. But it makes things v complicated unless my investment was part of an agreed full take over at a set price. 

 

by removing the KP loans, any investor is buying into the club at the same level as the owners. It just makes things much cleaner. 
 

 

[AKCJ]

What does this all mean then?

[st albans fox]

1 minute ago, AKCJ said:

What does this all mean then?

Potentially nothing on a day to day basis (if you were already of the opinion that the family are currently  committed to the club) 

 

but it could be part of something much bigger 

 

the first line is more likely than the second ! 

Edited 1 February 2023 by st albans fox

[Aus Fox]

39 minutes ago, StanSP said:

It's still very high, but down from over 100% not so long ago. 

 

That looks much better, when we factor in Kasper, Fofana, Perez and Albrighton all leaving and being replaced by Faes, Kristiansen, Tete and Souttar. 
I would imagine the 4 arriving would have a combined lower wage than the 4 departing.

With some big earners on the way out at the end of the season their should be some money available to rebuild the squad.

[baldeagle]

1 minute ago, AKCJ said:

What does this all mean then?

Our owners haven’t lost interest and are still the best 

[turlo]

4 minutes ago, AKCJ said:

What does this all mean then?

The speculation that the owners didn't care about the club, had never put a penny into the club (300 mill of owner loans to the club now written off) and were going to call the loans owed to KP in,  which would bankrupt the club turned out to be rather inaccurate

[scinnell]

2 hours ago, st albans fox said:

Something else missed above is that if you’re looking to sell a business, being debt free is a plus. what usually happens is that the debt is taken of the valuation but there could be circumstances where you’d want the the deal to be done without any debt involved.   This is the least likely scenario but worth a mention.  Just occurred to me that if someone wants to buy into a business, having no debt is an even bigger plus. Now I’m intrigued…..

I have heard rumours of this last week. Personally, took it with a pinch of salt but you never know.