KP Debt to Equity

[SemperEadem]

Dodgy junta money.

[CosbehFox]

1 hour ago, hackneyfox said:

But he still did it and it’ll save some interest every year. Try seeing tube positive.

its a spiral of negativity on here, if we won th FA cup posters would start moaning that we’d struggle in Europe the following season rather than celebrate the moment.

Don’t like it block me. 

[Dan]

6 hours ago, BluethroughtheMiddle said:

Amazing, he puts in another £125m to help the club and people are moaning. FFS only on Foxestalk.

Yes we have issues, yes things need to change in the day to cay management, but to be cynical about this is beyond belief.

Beyond belief? Seriously? It's hardly like it's out of character.

 

It's about time people did stop just assuming benefit of the doubt.

[Larry_LCFC]

Let's be honest, this is like stabbing someone and then giving them first aid straight after. Totally self inflicted this mess and now hes just wiping the debt he's caused himself through sheer incompetence. Should we be grateful?

[foxinsocks]

Seems that losing the debt makes the club more profitable and strengthens the balance sheet. This could help with psr or emerging rules from a regulator.  Converting it to equity when you already own 100% wouldn't matter ... unless top is diluting some other equity holder (chinaman?)

On the other side the debt would allow owners to take money out tax free... to have control in an administration situation... and to sell the club but retain the debt.

Clearly they have done the former... why is anyone's guess

Edited 25 January by foxinsocks

[5waller5]

My take on this is that Top is committed long term to the club. He may be really wondering what he’s meant to do to make the situation on the pitch and with the fans better.

 

He’s putting his money down and potentially stands to lose even more of it but he keeps pouring it in.

 

However, good intentions don’t make good business. He has the cash but not the ability to run a successful business. It’s a great shame as I’m sure his heart is in the right place.

 

He desperately needs some good advice. 
 

[Pliskin]

If this is top coming to a realisation that’s he’s let the club slip, and is taking it upon himself to correct the issues, then fair play to him. This needs to be the start of remedying the problems. 

[FoxesTez]

Very interesting reactions to the conversion this time compared to when they happened earlier under King Power stewardship. It is a sensible and beneficial move for us as a club, the difference from before is that this is money that has been invested to no obvious benefit on the pitch, whereas previously it was funding that allowed us to progress as a club. 

[Leeds Fox]

Would there be any reason this has been done after the PSR outcome?

 

Could it be Top trying to free up some avoidable outgoings (interest) for a final push to bring signings in. Last chance saloon to secure his asset’s worth?

[shiv]

5 hours ago, Larry_LCFC said:

Let's be honest, this is like stabbing someone and then giving them first aid straight after. Totally self inflicted this mess and now hes just wiping the debt he's caused himself through sheer incompetence. Should we be grateful?

The debt isn’t incompetence. It’s a very normal way of financing. Debt is just Top’s way of putting money into the club. The difference is he’s not expecting the money to be repaid (unlike the Glazers, Mike Ashley etc).

 

It really baffles me that people get so passionate about a topic without fully understanding it. 

[Cheese Me]

Amazed how people don’t get this.

 

He’s literally written off a massive amount of debt and still people criticise because they don’t understand.

 

It’s not a PR stunt, it’s a huge, huge boost for the club. If the debt exists it earns interest, at some point it can be called in (the club made to repay it) and we’d be screwed, certainly in administration, possibly out of existence. By writing off the debt that interest and risk is removed and Top is massively out of pocket.

 

We actually do have amazing owners, just some on here don’t understand and can’t remember / imagine a counter factual (ie what it would be like without them)

[Samilktray]

5 minutes ago, Cheese Me said:

Amazed how people don’t get this.

 

He’s literally written off a massive amount of debt and still people criticise because they don’t understand.

 

It’s not a PR stunt, it’s a huge, huge boost for the club. If the debt exists it earns interest, at some point it can be called in (the club made to repay it) and we’d be screwed, certainly in administration, possibly out of existence. By writing off the debt that interest and risk is removed and Top is massively out of pocket.

 

We actually do have amazing owners, just some on here don’t understand and can’t remember / imagine a counter factual (ie what it would be like without them)

Why don’t you kiss him if you love him that much 

[DJ Barry Hammond]

1 hour ago, Leeds Fox said:

Would there be any reason this has been done after the PSR outcome?

 

Could it be Top trying to free up some avoidable outgoings (interest) for a final push to bring signings in. Last chance saloon to secure his asset’s worth?

It’s part of PSR requirements for debt to be converted to equity when loss amounts are above the upper loss limit.

 

It’s why this sort of thing has happened essentially every year under Top / Vichai / King Power for years now and is commonplace across most Premier League clubs - I’m sure I saw Forest announce a similar move by Marinakis recently.

 

So whilst it will be a positive move for the clubs balance sheet (again); it’s got very little to do with January signings.

 

Indeed, my understanding is the problem being had with January signings is once again down to complying with PSR - not the lack of Top wanting to invest in the club.

[Ricey]

5 minutes ago, Cheese Me said:

Amazed how people don’t get this.

 

He’s literally written off a massive amount of debt and still people criticise because they don’t understand.

 

It’s not a PR stunt, it’s a huge, huge boost for the club. If the debt exists it earns interest, at some point it can be called in (the club made to repay it) and we’d be screwed, certainly in administration, possibly out of existence. By writing off the debt that interest and risk is removed and Top is massively out of pocket.

 

We actually do have amazing owners, just some on here don’t understand and can’t remember / imagine a counter factual (ie what it would be like without them)

It is not a huge, huge boost to the club. It’s taking loans from KP and Top and turning them into shares for KP and Top. It’s just a different way of paying them back, if or when the club is sold. They were never going to get the money back whilst they owned the club.

 

It’s purely shifting things around to avoid this new PSR rule around interest on owner debts. A lot of other clubs are doing it.

 

It could also be aimed at making us more attractive to investors, but I doubt it.

 

It’s not new money being invested, which is how the club are spinning it. Don’t believe the hype.

[Leicester_Loyal]

26 minutes ago, Cheese Me said:

Amazed how people don’t get this.

 

He’s literally written off a massive amount of debt and still people criticise because they don’t understand.

 

It’s not a PR stunt, it’s a huge, huge boost for the club. If the debt exists it earns interest, at some point it can be called in (the club made to repay it) and we’d be screwed, certainly in administration, possibly out of existence. By writing off the debt that interest and risk is removed and Top is massively out of pocket.

 

We actually do have amazing owners, just some on here don’t understand and can’t remember / imagine a counter factual (ie what it would be like without them)

We really do have some wet lettuce pathetic fans don’t we ffs 

[RonnieTodger]

Your average Facebook fan just doesn’t have a clue about football full stop. Half of them don’t even know what PSR is.

[FOXSE]

16 hours ago, FrankieADZ said:

massive well done to him

 

but all due respect, it feels like something thats just been done to try distract the fans and try and win them back over

Top: here is £124m for your club..

 

Foxestalk: get out of my club!

[DJ Barry Hammond]

16 hours ago, Stevosevic said:

 

Does this strengthen us at all transfer wise? 

To answer the OP, because I’ve seen a lot of inaccurate and bad takes in this thread.

 

Not really.

 

This happens every year - clubs breaching the “upper loss limit” under PSR are required to do this. 

 

The issue the club continues to have with regards to transfers is fitting them inside PSR limits - rather than not having the available cash (or owner credit facility in our instance) to do so.

 

[CosbehFox]

1 hour ago, Cheese Me said:

Amazed how people don’t get this.

 

He’s literally written off a massive amount of debt and still people criticise because they don’t understand.

 

It’s not a PR stunt, it’s a huge, huge boost for the club. If the debt exists it earns interest, at some point it can be called in (the club made to repay it) and we’d be screwed, certainly in administration, possibly out of existence. By writing off the debt that interest and risk is removed and Top is massively out of pocket.

 

We actually do have amazing owners, just some on here don’t understand and can’t remember / imagine a counter factual (ie what it would be like without them)

Shout it louder. 

HE HAD TO DO IT BECAUSE OF A PL RULE CHANGE. OTHER CLUBS DO IT TOO. THE LOAN IS KING POWER SETTLING A DEBT TO KING POWER
 

 

[DJ Barry Hammond]

55 minutes ago, Ricey said:

It’s purely shifting things around to avoid this new PSR rule around interest on owner debts. A lot of other clubs are doing it.

 

 - - -

 

It’s not new money being invested, which is how the club are spinning it. Don’t believe the hype.

Secured funding; via such a vehicle as debt to equity conversions; are a stipulation for breaching the upper loss limit under PSR.

 

So this is not something new - they’ve done this consistently over the years. 

 

- - - 

 

The club haven’t ‘spun’ anything here - it’s a very bland factual statement that is intended for the eyes of the Premier League. 
 

And whilst it is not ‘new money’ per say - it is an indication of the underlying investment Top / King Power are providing.

Edited 25 January by DJ Barry Hammond

[MattFox]

Top really wheeling out the big guns on this one

 

First Stringer now Vaz….

(It’s genuinely him)

 

[Corky]

10 hours ago, hackneyfox said:

But he still did it and it’ll save some interest every year. Try seeing tube positive.

its a spiral of negativity on here, if we won th FA cup posters would start moaning that we’d struggle in Europe the following season rather than celebrate the moment.

They really wouldn't. Fans are fed up with the dross on the pitch and aren't excited about this because it had to be done rather than a benevolent gesture.

 

Facebook is the place for unconditional support. But we all want to be successful.

[Ricey]

37 minutes ago, DJ Barry Hammond said:

Secured funding; via such a vehicle as debt to equity conversions; are a stipulation for breaching the upper loss limit under PSR.

 

So this is not something new - they’ve done this consistently over the years. 

 

- - - 

 

The club haven’t ‘spun’ anything here - it’s a very bland factual statement that is intended for the eyes of the Premier League. 
 

And whilst it is not ‘new money’ per se - it is an indication of the underlying investment Top / King Power are providing.

It is an indication of the loans Top / King Power have needed to provide to tick along.

KP’s aim was always to make us self sufficient, but the incompetence recently has caused us to haemorrhage money.

 

The club is trying to dress it up as new investment: “This latest debt-to-equity conversion takes the Srivaddhanaprabha family’s overall investment during its ownership of Leicester City to over £420m.”

 

It is not new money, it’s a conversion of previous loans.

[ronnup]

I reckon he might finally be shaping up to sell

[john ridley]

Wouldn't need to dip his hand in his pocket if the bloody club was run right .Serves him right ,one day hopefully  he'll  wake up.No gratitude  from me ,all self inflicted.