King Power Writes Off Entire Club Debt

[MrSpaM]

I guess Covid hasnt hit king power quiet as bad as once thought

 

Does make you wonder quite how much money they actually have

[st albans fox]

5 minutes ago, Chocolate Teapot said:

Struggle to see how this is a big deal.

We don’t know what the motivation is - is it for our finances - eg.  to release some funds (against existing interest repayments) re ffp or it’s something back in Thailand re KP or family finances.   Perhaps it’s both. it was done 31 dec 2022 - surely that’s relevant - more likely Thailand than here. 
 

anyone noticed any Qataris wandering around Morrisons ??

[Guest foxestalkisfullofidiots]

3 hours ago, An Away Move said:

What might be the motivation to do this? - For those of us skeptical that it’s not just from the heart. 

Kieran Maguire said on twitter this was a case of tidying up the balance sheets as its money that would be unlikely to ever be paid back, personally I think its a good thing, would imagine a lot of football owners would leave it as an outstanding debt 

[st albans fox]

6 minutes ago, foxestalkisfullofidiots said:

Kieran Maguire said on twitter this was a case of tidying up the balance sheets as its money that would be unlikely to ever be paid back, personally I think its a good thing, would imagine a lot of football owners would leave it as an outstanding debt 

There has to be a good reason to tidy up the balance sheets or it wouldn’t be done. I guarantee that doing this has cost money on legals etc. you don’t spend money just to tidy up a few bits of paper.  There are reasons for doing this and they are likely all positive for the club. 
 

we just don’t know for sure what the reasons are ….

[Tommy G]

13 minutes ago, MrSpaM said:

I guess Covid hasnt hit king power quiet as bad as once thought

 

Does make you wonder quite how much money they actually have

You do realise he hasn’t actually parted with any cash here when he’s done to loans to equity trf?

[sishades]

Just read this on the BBC web site. Wow. Simply outstanding. 

[volpeazzurro]

Whatever the motives and reasoning you can't say fairer than that really. Hopefully they'll have learned something in the more recent mistakes such as in the transfer market that departed from the previous goals ie speculate, buy young to improve and grow, sell and reinvest. The purchases of Perez, Vestergaard and Bertrand were expensive departure from that model in terms of age, fee, wages and contracts to some extent though players also have to be played to their strengths to get the best out of them. Supporters have to accept, I think, that we're never going to compete financially with the top six and tbh, that doesn't bother me personally because it's nice to spring the occasional surprise as the underdog. 

 

What isn't acceptable is dour, obsolete, unambitious system football and thereafter,  excuses of mammoth proportions. The latest three signings may or may not work but they are more like the old model and possibly certain people within the club have had their wings clipped hopefully. 

 

A slight air of optimism can be afforded because of their arrival and hopefully, they and our current squad would have to be extremely poorly managed to get relegated, no excuses. Rodgers talks the talk, gets paid elite managers money, he now needs to shut up and produce!

[Guest foxestalkisfullofidiots]

2 minutes ago, st albans fox said:

There has to be a good reason to tidy up the balance sheets or it wouldn’t be done. I guarantee that doing this has cost money on legals etc. you don’t spend money just to tidy up a few bits of paper.  There are reasons for doing this and they are likely all positive for the club. 
 

we just don’t know for sure what the reasons are ….

There could be a reason, personally I've always felt every financial decision as always been in the clubs best interests 

[filbertway]

I guess this prevents them from absolutely screwing us by calling in the loan if things ever turned sour?

 

Aside from that, not sure it means much else. The value essentially just gets added to the club. 

 

So instead of club worth x (also owe 194 debt). It's club now worth x + 194 (owe 0 debt). This is me working on the assumption that the owners would have called in the loan if they sold the club.

[the draper]

Wow puts an end to the nonsense about the families commitment 

 

Thank you Khun Top

[StriderHiryu]

24 minutes ago, MrSpaM said:

I guess Covid hasnt hit king power quiet as bad as once thought

 

Does make you wonder quite how much money they actually have

China recently cancelled restrictions on holiday travel and it has SURGED over there, numbers higher than pre-covid. Unsurprising given that many living there were not allowed to travel for 2 whole years, some quite literally locked into their own apartments for months at a time. 

 

It won't sustain forever, but most likely they are through the worst of it and might even be on track for a record quarter. 

[st albans fox]

14 minutes ago, Tommy G said:

You do realise he hasn’t actually parted with any cash here when he’s done to loans to equity trf?

well king power did spend the cash on us which is why we owed them the money 
 

10 minutes ago, foxestalkisfullofidiots said:

There could be a reason, personally I've always felt every financial decision as always been in the clubs best interests 

This one could be a win win on all sides 

[StanSP]

30 minutes ago, MrSpaM said:

I guess Covid hasnt hit king power quiet as bad as once thought

 

Does make you wonder quite how much money they actually have

It hit them hugely?! 

[An Away Move]

20 minutes ago, st albans fox said:

There has to be a good reason to tidy up the balance sheets or it wouldn’t be done. I guarantee that doing this has cost money on legals etc. you don’t spend money just to tidy up a few bits of paper.  There are reasons for doing this and they are likely all positive for the club. 
 

we just don’t know for sure what the reasons are ….

My hunch is that they are either looking for an investment partner or to sell. Most people who come into business have an exit strategy. Their’s would a good one. Delivered trophies, transformed infrastructure. Sold at a profit. Perhaps the flirt with relegation has sharpened the thinking. All speculation of course. 

[st albans fox]

Just now, An Away Move said:

My hunch is that they are either looking for an investment partner or to sell. Most people who come into business have an exit strategy. Their’s would a good one. Delivered trophies, transformed infrastructure. Sold at a profit. Perhaps the flirt with relegation has sharpened the thinking. All speculation of course. 

I read their comments on the club website - they aren’t inconsistent with your thoughts. They could have been more specific about the future under king power. Of course I’m likely guilty of looking for something that isn’t there ……

[MrSpaM]

8 minutes ago, StanSP said:

It hit them hugely?! 

Please share some figures

[StanSP]

3 minutes ago, MrSpaM said:

Please share some figures

 

https://www.statista.com/statistics/565893/global-turnover-of-king-power-international-group/

 

 

[Wasyls Pec Deck]

Hopefully this can herald a new era of positivity on and off the pitch. Christ knows that we need it! 

[5waller5]

37 minutes ago, coolhandfox said:

Not sure how it works. The interest is recorded in the P&L so I assume the interest is seen as expenditure in the FFP calcs. 

 

We just don't pay it, it just gets added to the overall debt to the owner. 

 

 

It’s not paid, as in money leaving LCFC account to arrive in KP account, however the interest still has to be accounted for in the outgoing accruals. 
 

So the motivation may be:

 

To lower FFP risk

To increase transfer funds

To increase borrowing capability

To simplify accounts for potential buyers

To seek new owners or investors

To show commitment to the club 

 

There are potentially another dozen reasons probably involving tax.

 

Whatever the mix of reasons, as a LCFC supporter, it’s hard to find a negative one. 

[hackneyfox]

4 hours ago, An Away Move said:

What might be the motivation to do this? - For those of us skeptical that it’s not just from the heart. 

jeez

2 hours ago, SemperEadem said:

KP are so deep in the merky worlds of Thai politics that their monopoly i’m sure would be safe even with less toblerones sold.

What type of (realistic) owner would you like, you clearly don't like the current owners.

[5waller5]

7 minutes ago, StanSP said:

 

https://www.statista.com/statistics/565893/global-turnover-of-king-power-international-group/

 

 

OUCH!

[TheStig]

40 minutes ago, st albans fox said:

There has to be a good reason to tidy up the balance sheets or it wouldn’t be done. I guarantee that doing this has cost money on legals etc. you don’t spend money just to tidy up a few bits of paper.  There are reasons for doing this and they are likely all positive for the club. 
 

we just don’t know for sure what the reasons are ….

It of course has consequences for the financial result of the KP group - so could be a tax saving process. All the same highly positive for the club

[coolhandfox]

4 minutes ago, 5waller5 said:

It’s not paid, as in money leaving LCFC account to arrive in KP account, however the interest still has to be accounted for in the outgoing accruals. 
 

So the motivation may be:

 

To lower FFP risk

To increase transfer funds

To increase borrowing capability

To simplify accounts for potential buyers

To seek new owners or investors

To show commitment to the club 

 

There are potentially another dozen reasons probably involving tax.

 

Whatever the mix of reasons, as a LCFC supporter, it’s hard to find a negative one. 

I know as I posted  that earlier.

 

Not worried about the motivation as it can only be a positive thing for the club.

[AyewJoking]

This is very nice of him but a sceptic may say he is just doing us (and the next owner) a favour

 

May take a while for us to payback 194 million when we're in the football league for the next 15 years and parachute payments are already spoken for.

[coolhandfox]

56 minutes ago, filbertway said:

I guess this prevents them from absolutely screwing us by calling in the loan if things ever turned sour?

 

Aside from that, not sure it means much else. The value essentially just gets added to the club. 

 

So instead of club worth x (also owe 194 debt). It's club now worth x + 194 (owe 0 debt). This is me working on the assumption that the owners would have called in the loan if they sold the club.

It's only worth what someone is willing to pay.