Owner wipes out debt.

[MooseBreath]

This is fantastic news and reduces the risk associated with the finances of the club massively - though make no mistake this is a sound business decision for the Thais. As owners of the club they will of course be able to take dividends from LCFC if and when they make a profit - and with no debt to service they are likely to profit much sooner.

This means that if the club is promoted, they will be able to claw back at least some of their investment via dividends, and of course the debt free club is then worth more on the open market than a debt ridden one.

So - my two cents, it doesn't necessarily mean that they are in it for the long run, and it's not some kind of gesture out of their back pocket. They will make more money out of this than they would have leaving the money as debt - but overall it works out better for both the club and the owners.

I don't really see how it is of great benefit to the owners. Yes they can take dividends if (and it's a big if) we become profitable. But the interest payment could have been guaranteed. Makes no investing sense to write off a guaranteed fixed rate interest payment in pursuit of an unlikely and variable dividend, which you could have had anyway on top of the interest.

Not having debt does increase the value of the club, but only by the value of the debt. So again no real gain for the owners there.

Personally I think doing this was their intention all along, and the loan scenario was purely a way to reduce tax. As far as I'm aware the club never actually paid any interest on the loans, so effectively they've never really existed. Unless you think the club is going to become vastly profitable sometime soon then this is something of a gesture from the backpocket, as they have bankrolled the debts built up over the last couple of years and aren't going to get it back directly in a hurry.

[Babylon]

Not really - it's unlikely we'll actually spend but he is right in that there is 5m we could now spend without it appearing as a loss on FFP sheets with that cushion.

I'm well aware of the savings, but the cushion they have built into it clearly shows we are still making massive losses, and we need to cut that back even further next season as the losses you can make go down even more.

So yes, I believe anyone thinking this means another spending spree is a bit deluded.

[Babylon]

Promotion would give them their money back....

90m promotion prize...

140m tv revenues

If they wanted to take the profits they could

Eh?

[The Horse's Mouth]

Some of you are acting like this makes us exempt from FFP.

[MooseBreath]

I'm well aware of the savings, but the cushion they have built into it clearly shows we are still making massive losses, and we need to cut that back even further next season as the losses you can make go down even more.

So yes, I believe anyone thinking this means another spending spree is a bit deluded.

What do you mean by "the cushion they have built into it clearly shows we are still making massive losses"? I'd be very surprised if we're making anything like "massive" losses by now.

[katieakita]

Some of you are acting like this makes us exempt from FFP.

 

FFP, So anyone put a value on our marketing rights if we reach the prem? Hasn't Viches wealth gone up by about £1 billion, the guy has serious wealth and clearly runs a very successful business. Having King Power plastered all over Thai tv if we get to the prem cannot be a bad thing for them. As for us it shows their intent to get us promoted. Also it suggests that just getting to the premiership will not be enough and funds wil be available to compete. For me these guys have done nothing but good for this club, they have made mistakes and boy haven't they paid for it.

 

They brought a manager in they rate and have let him do his thing, They have invested throughout the club not just on the first team squad that shows they are here for the long term. The Thai culture i  believe is big on loyalty and there is no reason to doubt them. So from me thank you for all you have done for Leicester City.

[Haydos]

What do you mean by "the cushion they have built into it clearly shows we are still making massive losses"? I'd be very surprised if we're making anything like "massive" losses by now.

We probably would have for everything up to the start of this season. I would really be interested to see the difference in expenditure on staff (wage bill, agent fees, singing fees, transfer fees) between this season and 2 years ago. Word is Nugent and Konchesky are on much higher than average wages as well so it could be cut a further £1m a year just from replacing those two with players on half their wages.

[Thracian]

Delighted - and coupled with yesterday's result a wonderful way to lift spirits and keep players on their toes at a time when we'd started to stutter.

 

Pearson sounds as if there's something a bit special lined up for January and, at the very least with Pearson, it's likely to be properly considered and of worthwhile benefit.

 

Congratulations too for his squeezing a win out of yesterday's game. Returning to the Morgan/Moore combination at the heart of our defence gave us what worked so well earlier in the season and Vardy's winner only helped further vindicate those who've always had faith in the guy.

 

Vardy to me is like Dyer in that you always get 100% from him whether he's having a great game or bad. Although he frustrates me I'd actually say the same about Knockaert. He's not a natural defender but he does keep trying and deserves some credit for that.

 

And, looking through yesterday's line-up it was heartening so see just how many triers we had out there - a whole bloody team full come to think of it.

 

And it's not too often I could have said that over the years since we've been in the footballing Doldrums.    

[_Fatboyslow_]

Eh?

Don't start Babs

[_Fatboyslow_]

Re: interest payment

If the owners take this it would restrict if not kill any investment in players. It would surely push us closer to the FFP limits. Therefore it could be the best decision for the owners and the benefit for the club is secondary.

[Bettsj2]

VICHES AINT SHIT

HAHAHAHAHA!!

[Bettsj2]

The club isnt how they are gonna make money in the western world. They are looking to expand their empire and this is a vehicle to do so. It wouldnt suprise me to see in 5 years time, King Power outlets in minor airports in the uk, and their hotel and leisure facilities around the coast not only in the Uk but Europe too.

We're a small part of their big picture but they need us to be a success in the right way which is why they're so good for us.

[Babylon]

What do you mean by "the cushion they have built into it clearly shows we are still making massive losses"? I'd be very surprised if we're making anything like "massive" losses by now.

The way I interpret it is that the "cushion", is going to be used to cover the losses we will make this season. (Up to £8m allowed under FFP it says in article).

If we weren't still needing to cut back, and were currently meeting FFP (not just this seasons requirements but also next) then it would be easy to get our best players signed up to contracts the same as they are already on. But we aren't, why not?

The idea of of suddenly spending £5m makes no sense to me.

[_Fatboyslow_]

We're a small part of their big picture but they need us to be a success in the right way which is why they're so good for us.

You may well be right with this

[_Fatboyslow_]

The way I interpret it is that the "cushion", is going to be used to cover the losses we will make this season. (Up to £8m allowed under FFP it says in article).

If we weren't still needing to cut back, and were currently meeting FFP (not just this seasons requirements but also next) then it would be easy to get our best players signed up to contracts the same as they are already on. But we aren't, why not?

The idea of of suddenly spending £5m makes no sense to me.

Sound enough thinking, I think the contacts issue is also redefining what we and other clubs can and will pay. As for the 5mill please let us dream a little, it might just be there

[Happy Fox]

http://mercurybusinesseditor.blogspot.co.uk/2013/12/foxes-fans-get-100m-christmas-present.html

 

The owner of Leicester City has provided fans with an early Christmas present - he's gift wrapped a debt-free club.

The Thai chairman has effectively wiped out the £103 million he was owed by the Foxes in a deal known as a "debt-for-equity swap". In other words he's exchanged the debt he was owed for shares in the club.

You may ask: 'didn't he already own 100 per cent of the club anyway, so why do this?' There are two main reasons why he has:

By preventing himself or his family from ever calling in the debt he sends a very strong message about his commitment to the club. Secondly, it allows City to make a £8 million loss this season - the maximum limit permitted under the Financial Fair Play rules, brought in to cut back on the excessive deficits which have been racked up by some clubs, including the Foxes. It also puts the club in better shape to comply with these rules in the future.

Many may see the move by Mr S as merely an accounting exercise - and to be fair chief executive Susan Whelan had indicated this was being planned back in March - but it has to be seen as far more than that.

It had been thought by many the owner would only convert a portion of the debt into shares, because he would never want to rule out getting back at least some of the £77 million in loans he has put into the club. However, he has created 103 million new shares valued at £1 each and swapped them for his very large collection of IOUs. He's also issued an extra 10,000 of these £1 shares, with the intention of buying them in the future. This latter part of the deal allows him to pump £5 million into the club this season, and potentially another £5 million next season, without it being a loan. He would instead be making an investment in the so-called "share capital" of the club. This process of investment is looked at more favourably by the Financial Fair Play rules and allows City to make that £8 million loss this year without being fined or having a transfer embargo imposed.

All in all, Mr S seems to have accepted, if he hadn't from the beginning anyway, that it would take decades to get back his loans and so has done the practical thing. After all, this financial arrangement is nothing new - both Manchester City and Chelsea have done it in recent years.

This eases the concerns of supporters who were always going to fret about what would happen to the club if Mr S decided to walk away, died or was somehow incarcerated (Thailand's politics have been known to change like the wind, after all). So far Mr S and his son Top have proved Far Eastern ownership doesn't always have to turn into a circus, as at Cardiff now and Man City previously. They have come across as benevolent benefactors, and this move only goes to cement that image.

To avoid any questions about the debt situation I'll seek to explain exactly how it was made up. About £77 million of the £103 million came from the chairman's loans, made through his King Power duty free empire. The remainder was from the £26 million debt Mr S inherited from the Milan Mandaric era.

On a more pressing and probably - to most of those reading this - a more interesting one, the three points we took against QPR yesterday will help us towards the financial Eldorado of the Premier League. Bangkok may have its golden temples, but Mr S, like the club's fans, is seeking his City of Gold.

[Guest shearfox]

http://mercurybusinesseditor.blogspot.co.uk/2013/12/foxes-fans-get-100m-christmas-present.html

The owner of Leicester City has provided fans with an early Christmas present - he's gift wrapped a debt-free club.

The Thai chairman has effectively wiped out the £103 million he was owed by the Foxes in a deal known as a "debt-for-equity swap". In other words he's exchanged the debt he was owed for shares in the club.

You may ask: 'didn't he already own 100 per cent of the club anyway, so why do this?' There are two main reasons why he has:

By preventing himself or his family from ever calling in the debt he sends a very strong message about his commitment to the club. Secondly, it allows City to make a £8 million loss this season - the maximum limit permitted under the Financial Fair Play rules, brought in to cut back on the excessive deficits which have been racked up by some clubs, including the Foxes. It also puts the club in better shape to comply with these rules in the future.

Many may see the move by Mr S as merely an accounting exercise - and to be fair chief executive Susan Whelan had indicated this was being planned back in March - but it has to be seen as far more than that.

It had been thought by many the owner would only convert a portion of the debt into shares, because he would never want to rule out getting back at least some of the £77 million in loans he has put into the club. However, he has created 103 million new shares valued at £1 each and swapped them for his very large collection of IOUs. He's also issued an extra 10,000 of these £1 shares, with the intention of buying them in the future. This latter part of the deal allows him to pump £5 million into the club this season, and potentially another £5 million next season, without it being a loan. He would instead be making an investment in the so-called "share capital" of the club. This process of investment is looked at more favourably by the Financial Fair Play rules and allows City to make that £8 million loss this year without being fined or having a transfer embargo imposed.

All in all, Mr S seems to have accepted, if he hadn't from the beginning anyway, that it would take decades to get back his loans and so has done the practical thing. After all, this financial arrangement is nothing new - both Manchester City and Chelsea have done it in recent years.

This eases the concerns of supporters who were always going to fret about what would happen to the club if Mr S decided to walk away, died or was somehow incarcerated (Thailand's politics have been known to change like the wind, after all). So far Mr S and his son Top have proved Far Eastern ownership doesn't always have to turn into a circus, as at Cardiff now and Man City previously. They have come across as benevolent benefactors, and this move only goes to cement that image.

To avoid any questions about the debt situation I'll seek to explain exactly how it was made up. About £77 million of the £103 million came from the chairman's loans, made through his King Power duty free empire. The remainder was from the £26 million debt Mr S inherited from the Milan Mandaric era.

On a more pressing and probably - to most of those reading this - a more interesting one, the three points we took against QPR yesterday will help us towards the financial Eldorado of the Premier League. Bangkok may have its golden temples, but Mr S, like the club's fans, is seeking his City of Gold.

Thanks for that, certainly great news... let's hope we are abit more sensible and don't run ourselves into horrendous debt again, also we have got to get some players tied up to new deals.

[Finn Claw II]

Fulham was rumoured to have been bought for about £200m.  While we are not based in London and hence less attractive we are a bigger club than them and certainly would be if we established ourselves in the Premier League.

 

The owners could certainly make money out of selling us but he needs a lot to go his way (i.e. promotion, 2-3 years in the PL, potential ground expansion etc.)

 

Whatever happens in the future this is good news

[Itsthejoeker]

Why do we always assume that they're looking to sell the club?

[Guest shearfox]

Why do we always assume that they're looking to sell the club?

The moaners will always have a negative opinion on anything, now the owners have done a good thing they need to look for another reason to not like them and to plot the clubs doom.

[Deucalion]

http://mercurybusinesseditor.blogspot.co.uk/2013/12/foxes-fans-get-100m-christmas-present.html

 

The owner of Leicester City has provided fans with an early Christmas present - he's gift wrapped a debt-free club.

The Thai chairman has effectively wiped out the £103 million he was owed by the Foxes in a deal known as a "debt-for-equity swap". In other words he's exchanged the debt he was owed for shares in the club.

You may ask: 'didn't he already own 100 per cent of the club anyway, so why do this?' There are two main reasons why he has:

By preventing himself or his family from ever calling in the debt he sends a very strong message about his commitment to the club. Secondly, it allows City to make a £8 million loss this season - the maximum limit permitted under the Financial Fair Play rules, brought in to cut back on the excessive deficits which have been racked up by some clubs, including the Foxes. It also puts the club in better shape to comply with these rules in the future.

Many may see the move by Mr S as merely an accounting exercise - and to be fair chief executive Susan Whelan had indicated this was being planned back in March - but it has to be seen as far more than that.

It had been thought by many the owner would only convert a portion of the debt into shares, because he would never want to rule out getting back at least some of the £77 million in loans he has put into the club. However, he has created 103 million new shares valued at £1 each and swapped them for his very large collection of IOUs. He's also issued an extra 10,000 of these £1 shares, with the intention of buying them in the future. This latter part of the deal allows him to pump £5 million into the club this season, and potentially another £5 million next season, without it being a loan. He would instead be making an investment in the so-called "share capital" of the club. This process of investment is looked at more favourably by the Financial Fair Play rules and allows City to make that £8 million loss this year without being fined or having a transfer embargo imposed.

All in all, Mr S seems to have accepted, if he hadn't from the beginning anyway, that it would take decades to get back his loans and so has done the practical thing. After all, this financial arrangement is nothing new - both Manchester City and Chelsea have done it in recent years.

This eases the concerns of supporters who were always going to fret about what would happen to the club if Mr S decided to walk away, died or was somehow incarcerated (Thailand's politics have been known to change like the wind, after all). So far Mr S and his son Top have proved Far Eastern ownership doesn't always have to turn into a circus, as at Cardiff now and Man City previously. They have come across as benevolent benefactors, and this move only goes to cement that image.

To avoid any questions about the debt situation I'll seek to explain exactly how it was made up. About £77 million of the £103 million came from the chairman's loans, made through his King Power duty free empire. The remainder was from the £26 million debt Mr S inherited from the Milan Mandaric era.

On a more pressing and probably - to most of those reading this - a more interesting one, the three points we took against QPR yesterday will help us towards the financial Eldorado of the Premier League. Bangkok may have its golden temples, but Mr S, like the club's fans, is seeking his City of Gold.

 

I'm not quite sure I'm understanding this.

 

Is El Dorado a right-winger?

[DANGEROUS TIGER]

I wonder how many owners would have done this?

 

Let's pay them back by gaining promotion.

[hackneyfox]

The way I interpret it is that the "cushion", is going to be used to cover the losses we will make this season. (Up to £8m allowed under FFP it says in article).

If we weren't still needing to cut back, and were currently meeting FFP (not just this seasons requirements but also next) then it would be easy to get our best players signed up to contracts the same as they are already on. But we aren't, why not?

The idea of of suddenly spending £5m makes no sense to me.

Why do we want to sign our best players on contracts that are supposedly well above the norm for this division, pay them no more than they'll be offered elsewhere which almost certainly won't be as much as we are apying.

Perhaps we don't want sign the best of those whose contracts are almost up because should we get promoted they'll hopefully be replaced?

Surely spending 5m in January makes perfect sense if the new players get us promoted?

Is there anything sudden about this, NFP has indicated that he has plans in place, he and his staff have probably known about this for some time, Susan Whelan clearly new and she has already stated to the Foxes Trust that we would hit FFP.

[Number 6]

Just because you can make an £8m loss doesn't mean you should. Great news however.

I got 99 problems but Vichai ain't one.

[Johnny Cash]

We will need to strengthen in January.

 

Rivals will all strengthen through perm/loan signings, we don't need to spend £5M but will will need to spend something.