ramblur Posted March 5, 2013 Share Posted March 5, 2013 Am I right in thinking that (for example) if a club's owner has loaned them £90m and doesn't really expect to get it back, then it's not much different (ignoring the accounting terms) to equity anyway? What would the practical difference be? If they sold the club they'd get the money (or part of it) back right? The loan route would give them secured creditor status,which the equity route wouldn't.I think this would give certain advantages in the event of administration,such as voting rights.I don't think the Revenue like this as it means they could be heavily outgunned in a vote (seem to remember this happened with Pompey,but I may be wrong-I'm talking CVA) Having said that,I wouldn't like to create the impression that this is behind our owners' thinking.My own guess is that they consider the £14.3m equity injections + £16m for purchase to be an efficient capital base and that they hope to (eventually) claw back the loan capital .Pure guesswork however. Link to comment Share on other sites More sharing options...
curb Posted March 5, 2013 Share Posted March 5, 2013 So the debt gets 'transferred' to the new owners, who would probably want to recoup it when they sell, and so on. If Leicester's owners write it off, then When or if they sell up the debt isn't transferred. Link to comment Share on other sites More sharing options...
ramblur Posted March 5, 2013 Share Posted March 5, 2013 So the debt gets 'transferred' to the new owners, who would probably want to recoup it when they sell, and so on. If Leicester's owners write it off, then When or if they sell up the debt isn't transferred. The bottom line is that any new owner is only ever going to pay what they feel a club is worth.If a large amount of loan capital is involved,then the negotiations start as part of the buy out package. Link to comment Share on other sites More sharing options...
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