KP Debt to Equity

[los dedos]

11 hours ago, hackneyfox said:

Jesus ****ing Christ some of you miserable ***** would moan if you got a Porsche for Xmas.

Its a positive a postive however you look at it, for the love of god stop wringing the joy out of every situation.

Did the person giving me the Porsche take a loan out in my name to pay for it ?

[Claridge]

12 hours ago, hackneyfox said:

Jesus ****ing Christ some of you miserable ***** would moan if you got a Porsche for Xmas.

Its a positive a postive however you look at it, for the love of god stop wringing the joy out of every situation.

Spot on, the whining on here is a bit pathetic. Rather have an Aston Martin though to be fair

[st albans fox]

The question here is are they just protecting  their investment over the years - so far £420m. If top and KP walk away then they lose at least half of that money.  If you were asked to buy the club with that debt then you’d discount the price by £124m straight away. And then you’d probably try and negotiated that down further. By removing the debt , that avenue is closed completely. There may be tax disadvantages of doing it but then I doubt that top and KP live in the same world as we do on taxes! 

 

For us to be more hamstrung on spending makes no sense if the end game for the family is no different. They aren’t getting that £124m back from the club as it doesn’t exist. So they may aswell convert it to shares which gives PSR a few million help and therefore gives the club a little bit of help to budget better for next season in the championship and try to get back up. 
 

the only way they mitigate some of their loss is to sell but they’d barely get back   half of what they’ve invested thus far. (In cash terms).   Possibly more if they could convince Forest to buy seagrave for £50m! 

If they don’t make that conversion of debt to shares then the club is a little more likely to fail psr in the championship next season and the valuation will diminish further.  As mentioned above, it’s not new money and it’s not investment of new money.  

[Kitchandro]

2 hours 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)

He’s a billionaire. Not your mate.

[HankMarvin]

3 hours 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’s essentially interest free loans that he has borrowed to help with the funding of the club. It’s quite common. Well it was until November and the Man City case and how the rules are changing..

 

“Existing loans can be converted into shares, wiping out the borrowing and placing a club beyond the coming scrutiny”

“Their outgoing rules have just been found to break competition law, so clubs must be careful not to create a new problem”

 

When you sail close the wind you need all the help you can get with balance sheets.

 

its also makes the club a more attractive selling proposal, Everton had shareholder loans of £450m factored into their selling price and made their deal drag on.

Edited 25 January by HankMarvin

[CosbehFox]

interesting when Forest’s owner did it (£82m debt to equity) on 3rd January there was no statement by Forest and it was only because of companies house that the press were alerted 

[HankMarvin]

4 minutes ago, CosbehFox said:

interesting when Forest’s owner did it (£82m debt to equity) on 3rd January there was no statement by Forest and it was only because of companies house that the press were alerted 

There was January 11th deadline.

 

this is taken from an article in November before Everton were sold.

 

“The Everton owner has committed to waiving the huge debt on completion of his planned sale to the Friedkin Group, and will convert it to equity if it appears that will not happen before 11 January. From that date shareholder loans will become subject to a fair market value test by the league after last week’s vote on associated party transaction rules to which opposition was led by Manchester City”

[Silva Fox]

5 minutes ago, CosbehFox said:

interesting when Forest’s owner did it (£82m debt to equity) on 3rd January there was no statement by Forest and it was only because of companies house that the press were alerted 

I think we all know what the timing and messaging is intended to do here!

[Footballwipe]

2 minutes ago, Silva Fox said:

I think we all know what the timing and messaging is intended to do here!

And it's worked to a tee. Look at them all in this thread. Very quiet over the last week but this PR piece has them crawling out of the woodwork to defend a billionaire scrabbling for credit.

[st albans fox]

1 minute ago, Silva Fox said:

I think we all know what the timing and messaging is intended to do here!

If top/king power were subject to U.K. taxes then I think it would be a hit for him/them to convert to shares rather than keeping it as debt. But they aren’t so i reckon it makes little difference to them. If there is liquidity in the club at some point then they can take dividends instead of loan repayments. For U.K. residents that would have tax implications but not the case here. At best it shows commitment to club and saves a few million in interest, at worst it’s just a PR exercise. 
 

people will take their position on that from their view of the owners. 

[DJ Barry Hammond]

1 hour ago, Ricey said:

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.

Look, you are one of many in this thread talking twaddle.

 

The club haven’t tried to dress it up as ‘new investment.’ 
 

It is the blandest of bland factual statements as is usually the case for finance related statements - it’s quite clearly been written by an accountant - there is no spin or creative flourish to it whatsoever.

 

Now of course the club has needed continued investment - I don’t recall a period when the club wasn’t regularly losing money! 
 

Indeed most football clubs are being run at eye watering losses.

 

But even if the club had had near perfect performance on and off the pitch - it still would have been haemorrhaging money because the level of finance required to compete at the top level is miles away from what our current revenue streams can provide.

 

I should also be clear - this point shouldn’t be viewed as a defence or endorsement of the current ownership situation - if is simply trying to ground sentiment and feeling with reality.

 

The way a lot of people talk on here, they make it seem like running a successful football club is easy.

[FrankieADZ]

3 hours ago, FOXSE said:

Top: here is £124m for your club..

 

Foxestalk: get out of my club!

while we all are thankful for what hes done, he needs to have the balls to bring the ones accountable for the mess we are in behind the scenes

any other line of work etc, theyd have been sacked and a complete restructure, which the club hasnt done any in donkeys years

[FOXSE]

28 minutes ago, FrankieADZ said:

while we all are thankful for what hes done, he needs to have the balls to bring the ones accountable for the mess we are in behind the scenes

any other line of work etc, theyd have been sacked and a complete restructure, which the club hasnt done any in donkeys years

Very true.

[merlin1969]

Leicester City chairman wipes out £124m of debt as statement released

In the second such move in just over two years, Aiyawatt 'Top' Srivaddhanaprabha and King Power have effectively relieved the club of the debt owed to him and the parent company

 

• Share

[Ricey]

3 hours ago, DJ Barry Hammond said:

Look, you are one of many in this thread talking twaddle.

 

The club haven’t tried to dress it up as ‘new investment.’ 
 

It is the blandest of bland factual statements as is usually the case for finance related statements - it’s quite clearly been written by an accountant - there is no spin or creative flourish to it whatsoever.

 

Now of course the club has needed continued investment - I don’t recall a period when the club wasn’t regularly losing money! 
 

Indeed most football clubs are being run at eye watering losses.

 

But even if the club had had near perfect performance on and off the pitch - it still would have been haemorrhaging money because the level of finance required to compete at the top level is miles away from what our current revenue streams can provide.

 

I should also be clear - this point shouldn’t be viewed as a defence or endorsement of the current ownership situation - if is simply trying to ground sentiment and feeling with reality.

 

The way a lot of people talk on here, they make it seem like running a successful football club is easy.

I literally posted the quote that says “it takes the investment up to…” which very much makes out as if it is fresh money. They know what they are doing.

[Skidmark]

I don't know why you'd ever own a football club. 

 

His family have thrown £450 million in the bin since owning the club. 

 

 

[st albans fox]

4 minutes ago, Skidmark said:

I don't know why you'd ever own a football club. 

 

His family have thrown £450 million in the bin since owning the club. 

 

They’ve had a couple of nice days out though over the years …..

many people have spaffed more money than that over the years for way less exposure and no trophies.