The Year Of The Fox Posted 2 March 2013 Share Posted 2 March 2013 Club are in discussions to convert £61.6m of loans from the owners into equity. Huge boost to lcfc if that happens. Courtesy of Foxbloggers Twitter To a retard this sounds bloody good but I'm sure someone who knows their stuff can confirm or not! Link to comment Share on other sites More sharing options...
Leicester_Numan Posted 2 March 2013 Share Posted 2 March 2013 Just been reading his tweets. Record losses of £29.7mil including £27.7mil on wages. Cheers Sven Link to comment Share on other sites More sharing options...
The Year Of The Fox Posted 2 March 2013 Author Share Posted 2 March 2013 Just been reading his tweets. Record losses of £29.7mil including £27.7mil on wages. Cheers Sven He was still a good manager Link to comment Share on other sites More sharing options...
bluearmysweden Posted 2 March 2013 Share Posted 2 March 2013 Sounds great to me and is a hint that these owners are damn serious about everything and really want the club in the Premiership! Link to comment Share on other sites More sharing options...
The Year Of The Fox Posted 2 March 2013 Author Share Posted 2 March 2013 Sounds great to me and is a hint that these owners are damn serious about everything and really want the club in the Premiership! do you understand what it means though? I need some layman's terms here Link to comment Share on other sites More sharing options...
Oxshottfox Posted 2 March 2013 Share Posted 2 March 2013 Simple, if the club has debt them that needs to be serviced with interest payments and usually involves some sort of claim on the underlying clubs assets in bankruptcy ( like a mortgage). So if you have debt attached to a club like man utd do you need to keep making money to pay the interest. If it is equity there is no obligation to pay interest ( you may get dividends but these are at the discretion of the club) and in bankruptcy the equity is at the bottom of the pile in terms of claims. If this is true then it is a massive vote of confidence in the club and the willingness of the owners to risk it all. With the purchase of the stadium we owe these new owners a huge debt of gratitude Link to comment Share on other sites More sharing options...
Leicester Lass Posted 2 March 2013 Share Posted 2 March 2013 do you understand what it means though? I need some layman's terms here Debt for equity means that the balance the club owes them is swapped for shares in club. Makes the balance sheet look a lot healthier and will help us comply with FFP. Link to comment Share on other sites More sharing options...
dynamark Posted 2 March 2013 Share Posted 2 March 2013 Rather sounds like after a reckless start(remember sven didnt sign the cheques)own owners have come over all prudent. Link to comment Share on other sites More sharing options...
Leicester_Numan Posted 2 March 2013 Share Posted 2 March 2013 He was still a good manager Was being the operative word, but sadly not for us Link to comment Share on other sites More sharing options...
MikeyT Posted 2 March 2013 Share Posted 2 March 2013 http://www.thisisleicestershire.co.uk/Leicester-City-pound-30-million-record-losses/story-18299504-detail/story.html#axzz2MMWYgv8J Leicester City made a record loss of nearly £30 million during last season's failed push for promotion, it was revealed today. The deficit was nearly double the previous record loss of £15.2 million in 2010/11. However, the Thai owners assured fans they are as committed as ever to getting the club into the Premier League. They blamed the huge loss on a soaring wage bill built up during Sven-Goran Eriksson's reign as manager. The £29.7 million loss – one of the biggest ever reported by a Championship club – was racked up in the year to May 31, 2012. It has been covered by the owners, who pumped in £36 million last season. Their commitment to the club was also highlighted yesterday when it was announced they had bought the King Power Stadium from American pension fund manager Teachers Insurance in a £17 million deal. Chief executive Susan Whelan said: "The fans should not be concerned. This loss has been funded. The owners are committed to the club." Salaries rocketed to £27.7 million in 2011/12 from £16.6 million the previous season. High-wage earners, such as Matt Mills and Sol Bamba, brought in by Eriksson, have since left the club, while Jermaine Beckford is on loan to Huddersfield until the end of the season. Eriksson was sacked by the club in October, 2011, after serving just over a year as manager. The club reported turnover increased by 23 per cent to £21.4 million in 2011/12, helped by a rise in money from sponsorship, executive suites and advertising, which climbed from £3million to £5.5 million. Income from match tickets fell slightly, from £6.02 million to £5.87million, while cash from retailing and merchandise rose from £1.37 million to £1.45 million. Ms Whelan said she was not yet able to give an indication of this season's financial performance. Promotion would bring City a windfall of more than £100 million. However, the club is prepared financially for another season in the Championship, she said. The club's debt rose from £46 million to £85.4 million, mainly as a result of the £29.7 million loss. The remaining £9.3 million is regarded as a debt, but not a loss, because it was an investment in the club, either in transfer fees for players or in club facilities. The club's chairman, Vichai Srivaddhanaprabha, owner of Thai duty-free business King Power Group, took over the club in 2010 after a £39 million deal with previous owner Milan Mandaric. He has given the club loans totalling £61.6 million since he took control, but hopes to eventually convert these loans into shares in an arrangement similar to what has been seen at Chelsea and Manchester City. "My vision is for Leicester City to take its place as a highly respected and successful Premier League club," said Mr Srivaddhanaprabha. "As a club, we should centre around the lives of the fans and the community of Leicester. We will hold the club's heritage in trust, and develop the club to ensure sustainability for future generations. "My commitment to Leicester City has been gratifyingly reciprocated by the club's loyal fans and partners, whose support continues to be valuable in helping the club achieve its long-term objectives." Mr Srivaddhanaprabha changed his surname from Raksriaksorn, last month after being granted a royal honour by the King of Thailand. Link to comment Share on other sites More sharing options...
Happy Fox Posted 2 March 2013 Share Posted 2 March 2013 This explains it clearly from the HRMC website http://www.hmrc.gov.uk/manuals/cfmmanual/cfm11180.htm Where a borrower company is unable to repay its borrowings it may be that the creditor agrees to convert the debt into shares. Where this happens the terms of the conversion will indicate whether there is a release of part of the debt in exchange for the issue of shares, and how much of the debt is treated as released. The remaining debt will be treated effectively as repaid through the issue of the shares. From the lender's point of view this release is simply likely to recognise what the accounts will have indicated already, which is that the debt was unlikely to be repaid in full. The repayment of the remaining part of the debt through the issue of shares will be reflected in the accounts of the lender by the removal of the borrower balance and the inclusion of the shares as assets of the company. From the borrower's point of view the borrowings have been replaced by share capital. The release of part of the debt may create a profit in the accounts of the borrower and the issue of shares will be reflected in the share capital and the share premium account where appropriate. Through the transaction the borrower has reorganised its capital structure. Instead of borrowings it now has share capital in issue. This may enable the company to raise more money through issuing further debt or through borrowing. Link to comment Share on other sites More sharing options...
jonthefox Posted 2 March 2013 Share Posted 2 March 2013 http://www.thisislei...l#axzz2MMWYgv8J Leicester City made a record loss of nearly £30 million during last season's failed push for promotion, it was revealed today. The deficit was nearly double the previous record loss of £15.2 million in 2010/11. However, the Thai owners assured fans they are as committed as ever to getting the club into the Premier League. They blamed the huge loss on a soaring wage bill built up during Sven-Goran Eriksson's reign as manager. The £29.7 million loss – one of the biggest ever reported by a Championship club – was racked up in the year to May 31, 2012. It has been covered by the owners, who pumped in £36 million last season. Their commitment to the club was also highlighted yesterday when it was announced they had bought the King Power Stadium from American pension fund manager Teachers Insurance in a £17 million deal. Chief executive Susan Whelan said: "The fans should not be concerned. This loss has been funded. The owners are committed to the club." Salaries rocketed to £27.7 million in 2011/12 from £16.6 million the previous season. High-wage earners, such as Matt Mills and Sol Bamba, brought in by Eriksson, have since left the club, while Jermaine Beckford is on loan to Huddersfield until the end of the season. Eriksson was sacked by the club in October, 2011, after serving just over a year as manager. The club reported turnover increased by 23 per cent to £21.4 million in 2011/12, helped by a rise in money from sponsorship, executive suites and advertising, which climbed from £3million to £5.5 million. Income from match tickets fell slightly, from £6.02 million to £5.87million, while cash from retailing and merchandise rose from £1.37 million to £1.45 million. Ms Whelan said she was not yet able to give an indication of this season's financial performance. Promotion would bring City a windfall of more than £100 million. However, the club is prepared financially for another season in the Championship, she said. The club's debt rose from £46 million to £85.4 million, mainly as a result of the £29.7 million loss. The remaining £9.3 million is regarded as a debt, but not a loss, because it was an investment in the club, either in transfer fees for players or in club facilities. The club's chairman, Vichai Srivaddhanaprabha, owner of Thai duty-free business King Power Group, took over the club in 2010 after a £39 million deal with previous owner Milan Mandaric. He has given the club loans totalling £61.6 million since he took control, but hopes to eventually convert these loans into shares in an arrangement similar to what has been seen at Chelsea and Manchester City. "My vision is for Leicester City to take its place as a highly respected and successful Premier League club," said Mr Srivaddhanaprabha. "As a club, we should centre around the lives of the fans and the community of Leicester. We will hold the club's heritage in trust, and develop the club to ensure sustainability for future generations. "My commitment to Leicester City has been gratifyingly reciprocated by the club's loyal fans and partners, whose support continues to be valuable in helping the club achieve its long-term objectives." Mr Srivaddhanaprabha changed his surname from Raksriaksorn, last month after being granted a royal honour by the King of Thailand. You can butter this is all you like, but it still worries me. Link to comment Share on other sites More sharing options...
demon_dog Posted 2 March 2013 Share Posted 2 March 2013 This explains it clearly from the HRMC website http://www.hmrc.gov....al/cfm11180.htm Where a borrower company is unable to repay its borrowings it may be that the creditor agrees to convert the debt into shares. Where this happens the terms of the conversion will indicate whether there is a release of part of the debt in exchange for the issue of shares, and how much of the debt is treated as released. The remaining debt will be treated effectively as repaid through the issue of the shares. From the lender's point of view this release is simply likely to recognise what the accounts will have indicated already, which is that the debt was unlikely to be repaid in full. The repayment of the remaining part of the debt through the issue of shares will be reflected in the accounts of the lender by the removal of the borrower balance and the inclusion of the shares as assets of the company. From the borrower's point of view the borrowings have been replaced by share capital. The release of part of the debt may create a profit in the accounts of the borrower and the issue of shares will be reflected in the share capital and the share premium account where appropriate. Through the transaction the borrower has reorganised its capital structure. Instead of borrowings it now has share capital in issue. This may enable the company to raise more money through issuing further debt or through borrowing. That is the worrying part! Link to comment Share on other sites More sharing options...
Happy Fox Posted 2 March 2013 Share Posted 2 March 2013 That is the worrying part! It is worrying you can dress it up all you want but it is a promotion or bust scenario for me the only way that debt will be removed which is accumulating year or year due to player salaries and other factors, is from an imminent return to the prem. Link to comment Share on other sites More sharing options...
Thracian Posted 2 March 2013 Share Posted 2 March 2013 It is a worry without doubt but the capacity for implosion is always there in business - look at the massive high street names that have gone under in recent years - and the bigger the figures involved the greater the potential fallout. But football is a business, the rewards are potentially huge, and you either challenge the competition - which means spending good money wisely - or you'll likely go under in any case. From what I can see money has been spent in our clubs best interests and, post Sven at least, we seem to be getting reasonable value and our player assets seem to be significantly on the rise. At least our owners seem to know how to run a business successfully. What concerns me most is if they lose interest for whatever reason, sell out and leave us with the wrong owners. Being fair, from their comments, it doesn't sound as if they'd ever sell the club irresponsibly but sometimes, people can be left with limited choice. Link to comment Share on other sites More sharing options...
Bettsj2 Posted 2 March 2013 Share Posted 2 March 2013 The sell the club and leave us high and dry scenario is pretty unlikely from their actions. The losses wont be as bad next financial year as NP has obv brought the wageroll down which we can see was the biggest loss. The owners are not LCFC fans, lets not be under that illusion, but the agenda they have is to make money which requires us to be a success. There is no point comparing us to the Pompey scenario as that was completely different. Link to comment Share on other sites More sharing options...
Jace Posted 2 March 2013 Share Posted 2 March 2013 We have a wealthy financial backer and all some fans do is moan and worry, what’s the better alternative? Would these fans prefer not to have a wealthy financial investor? Would we be in a much better position then? Link to comment Share on other sites More sharing options...
Matt Posted 2 March 2013 Share Posted 2 March 2013 We have a wealthy financial backer and all some fans do is moan and worry, what’s the better alternative? Would these fans prefer not to have a wealthy financial investor? Would we be in a much better position then? I would prefer a football club ran primarily as a football club rather than a business but as is such and football nowadays it isn't just a game anymore but a business we are in the best position we could hope for. Link to comment Share on other sites More sharing options...
MooseBreath Posted 2 March 2013 Share Posted 2 March 2013 The debts exist because of the loans. Converting the loans to equity means no more loans therefore no more debt. All of the money they've put into the club then becomes much more of a gift. It will finally put to bed all of the concerns about the mysterious 8% loans. Which is brilliant news. Between this and the stadium the owners have played an absolute blinder this week. Link to comment Share on other sites More sharing options...
Dan LCFC Posted 2 March 2013 Share Posted 2 March 2013 He was still a good manager The bloke's a fraud. Link to comment Share on other sites More sharing options...
Jace Posted 2 March 2013 Share Posted 2 March 2013 I would prefer a football club ran primarily as a football club rather than a business but as is such and football nowadays it isnt just a game anymore but a business we are in the best position we could hope for. We all would mate unfortunately unless a football club has worldwide support like Man Utd or Barcelona with a big commercial turnover to support it its almost impossible to run a successfully without a loss and financial backing. It’s this way or the Coventry way Link to comment Share on other sites More sharing options...
Guest ttfn Posted 2 March 2013 Share Posted 2 March 2013 Essentially it takes the liability off the club and into the hands of the owners. The club would no longer be obliged to repay the loans, although the owners would (if so minded) still be able to fleece the club through asset stripping and paying huge dividends to themselves. That said, this can only be a good thing if teye Link to comment Share on other sites More sharing options...
Finnegan Posted 2 March 2013 Share Posted 2 March 2013 Pointing fingers at Sven is retarded, regardless of whether we like our owners it was them that let him spend the money. It's not like he held them at gunpoint and said "Matt Mills, five million, now." Link to comment Share on other sites More sharing options...
MooseBreath Posted 2 March 2013 Share Posted 2 March 2013 Pointing fingers at Sven is retarded, regardless of whether we like our owners it was them that let him spend the money. It's not like he held them at gunpoint and said "Matt Mills, five million, now." They trusted the manager to spend the money wisely. Hardy a criticism, unless you'd prefer the type of owners who make signings on the managers behalf? Link to comment Share on other sites More sharing options...
21st Century Fox Posted 2 March 2013 Share Posted 2 March 2013 Pointing fingers at Sven is retarded, regardless of whether we like our owners it was them that let him spend the money. It's not like he held them at gunpoint and said "Matt Mills, five million, now." I imagine it more like, he threatened to scold Top with a pot of very hot green tea. Link to comment Share on other sites More sharing options...
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