MooseBreath Posted 15 March 2013 Posted 15 March 2013 right but when you loan a club money, you get interest plus the capital. when you turn it into equity the interest goes away. right now they are loaning us money, and charging us for the privelidge. if we ever get to the prem, they can pay off their loans (up to a point), but they earned all that interest off us whilst we were in debt, and you can be sure that if they didn't fund the loans form liquid cash, they added a point or two on the loan they took out to loan us the money. so debt is important inasmuch as paying the interest adds to it if you can't cover it all. confusing yes. point is, we ride the debt in the hope that eventually we make it to the promised land, when for them all will be rosy, but for us just means more cost, higher price tickets (not just home but away, how many people would go to the emirates???). and if don't get there, at some point the plug will be pulled. a good businessman does not throw bad money after good. Who is this us and them? It is them and them, bro. They OWN the club, they don't need to loan the club money to make money from the club, they can just reach in and take as much cash as they like, whenever they like, but it's already THEIR cash, so what's the point. It's like taking money from your left pocket and putting into your right, you haven't made any money, you've just moved it around.
Swiss_tony Posted 15 March 2013 Posted 15 March 2013 it isn't them and them because they own the club through a holding company. "The latest £26m of the £53m injected by Raksriaksorn, who owns Leicester through the holding company Asian Football Investments, is a loan at 8% and not interest-free as, say, Abramovich has done with Chelsea." not the same as equity.
Libertine Dream Posted 15 March 2013 Posted 15 March 2013 it isn't them and them because they own the club through a holding company. "The latest £26m of the £53m injected by Raksriaksorn, who owns Leicester through the holding company Asian Football Investments, is a loan at 8% and not interest-free as, say, Abramovich has done with Chelsea." not the same as equity. AFI don't own the club, they transferred it to KPI (King Power International)
Swiss_tony Posted 16 March 2013 Posted 16 March 2013 true, i had forgotten that, but the point being they fund us through loans right now, not equity. and with ffp, there will be a limit on equity investment to cover losses next year.
Deucalion Posted 16 March 2013 Posted 16 March 2013 true, i had forgotten that, but the point being they fund us through loans right now, not equity. and with ffp, there will be a limit on equity investment to cover losses next year. They stated in the financial statement that they would look at converting debt into equity. If they do this, then all questions about the owners intentions should be laid to rest. We should just be grateful that any mistakes they did make, they have put right. What do you mean by 'limits on equity investments under FFP'?
Guest Col city fan Posted 16 March 2013 Posted 16 March 2013 Pardon me for being ignorant,but what does 'converting debt to equity' mean and imply?
cc_star Posted 16 March 2013 Posted 16 March 2013 Pardon me for being ignorant,but what does 'converting debt to equity' mean and imply? I don't understand the exact implications, but I think it's almost certain it will only be a part of the debt. Essentially they'd be 'giving' us whatever money is converted & the loan for that part of the debt written off. As businessmen they'd presumably only convert whatever can be covered by firm assets. Like the ground for example, they've purchased it for £17m... and I think it's been valued (some time ago) at over £40m. This means under a worse case scenario if things went belly up they'd be able to get that portion of what they've 'given' us back by selling it. Under a best case scenario they'd get their money back just by owning us and drawing on profits. I'm sure somewhere along the line it would help King Power's fincances or tax situation too, although I don't know.
Guest Col city fan Posted 16 March 2013 Posted 16 March 2013 I don't understand the exact implications, but I think it's almost certain it will only be a part of the debt. Essentially they'd be 'giving' us whatever money is converted & the loan for that part of the debt written off. As businessmen they'd presumably only convert whatever can be covered by firm assets. Like the ground for example, they've purchased it for £17m... and I think it's been valued (some time ago) at over £40m. This means under a worse case scenario if things went belly up they'd be able to get that portion of what they've 'given' us back by selling it. Under a best case scenario they'd get their money back just by owning us and drawing on profits. I'm sure somewhere along the line it would help King Power's fincances or tax situation too, although I don't know. Cheers for that CC
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