777 Partners / Whatever the hell you like

[HalfTimeSayers]

Yeah surprisingly clued up for someone from Sky TV. We do not want these Vultures no matter what. The fan/ Customer she brought up was spot on, they don't want to sell you Hotdogs and beer, they want you to buy Insurance. Yeah that will be needed when we are getting slammed 3-0 by Bournemouth..

The idea on paper is that the profits from selling insurance, banking, god knows what else is what funds the improvement in the club profitability, thus ability to spend, and then the on pitch performance. That then increases the value of their investment by hundreds of millions. Selling Everton branded home insurance to literally a few thousand naive Everton fans (who should be buying the best/cheapest insurance not the Everton branded version) will make them two fifths of sod all. Even if every penny of those policy sales went directly into their pockets (it wouldnt) these fellas would blow that money one single private jet hire to watch one of our games. Literally.

It’s a horrible soundbite this hyper commercialisation and it was a stupid thing to say by an investor as it’s not what fans want. But be in no doubt, they increase their wealth by increasing the value of the club which can only really be done ultimately by being much less crap. Their plan will be to fund that on pitch improvement with hyper commercialisation of the fanbase. Arguably we get what we want if it works, but it does sound hugely distasteful. We’d all love our improvement to be funded by an infinitely wealthy foreign state, or sales from a well run academy, but that isn’t happening.

 

[Martin Alvito]

He said R&M were happy with it. Not said anything about MSP being happy, so it sounds like they are the potential blockage.

It's crazy all these conflicting interests having a say - R&M vetoed MSP so MSP loaned us some cash instead of their investment, now they have a say to block 777.

At some point the lenders have to realise that Moshiri has us on a path to insolvency and if that happens they don't get their money back. They can't go on vetoing new investors forever, even if it's ones they don't like.

It's important to understand the lenders' perspectives here. From where they sit, Moshiri is getting a payday in excess of what the club is now worth, after their encumbrances. A significant portion of that payday will be financed by 777 Partners taking out their own loans. 777 will do that at high interest rates, because it's clear enough they don't have the capital and are not a creditworthy borrower themselves. The money to pay 777's interest charges has to come from somewhere, and the only place to get it is the club. Those loans may or may not be secured by the club, but they will surely be financed by it.

Another thing to understand is that a high interest loan is very different from a low interest one. If I lend you money at 4% for thirty years, you start paying significant amounts against principal right away. If I lend it to you at 11%, all you do is pay interest for years and years. You can check this in seconds with an amortization calculator.

If the lenders think the club will be stripped faster than they get paid interest and principal paydown (and the math suggests it will) and is doomed to administration under these sale terms, they're better off cutting their losses now. What's also happening, though, is a game of chicken between the lenders and Moshiri where they figure he has to swerve. They're probably trying get him to knock down what he recovers in a sale by paying them off, or paying down the balances from his proceeds. He recovers near-zero in administration, with a ticket to the Championship guaranteed and the sale of the club forced. If he pays them off from his sale proceeds, 250 million pounds is a lot more than zero.

That's effectively a 60% off sale price, at which point I would expect to see more reputable players enter the game despite the condition of the finances. We're a fixer-upper, but you can flip those at a profit if the sale price is right. The more I think about it, the more I suspect Moshiri announced a probable doomed sale way too early in the process for free media coverage. He's tipping his hand on his bargaining range, but he knows he never gets the top end anyway. If 777 was the only taker near the list price, perhaps getting the word out there that he has to cut the price will attract more serious interest.

 

[degsy]

But why would any secret investor, dodgy or otherwise, sink hundreds of millions into a financial shipwreck like EFC?

It doesn’t make sense to me.

They must think there is money to be made, probably by finishing the stadium and selling us on.
Which, tbh, was Moshiri's (and by extension, allegedly Usmanov's) joint plan.
Events and Moshiri's incompetence have left them with no stomach / real money to finish the race.

If 777 goes through OR it doesn't
Does the PL really, really, want one of their founder members to fold - all in the name of regulatory compliance / pour encourager les autres??

 

[Simon Buttle]

They must think there is money to be made, probably by finishing the stadium and selling us on.
Which, tbh, was Moshiri's (and by extension, allegedly Usmanov's) joint plan.
Events and Moshiri's incompetence have left them with no stomach / real money to finish the race.

If 777 goes through OR it doesn't
Does the PL really, really, want one of their founder members to fold - all in the name of regulatory compliance / pour encourager les autres??

I did wonder if they see us as a 'quick flip' type thing. Basically they use capital from their multi club system to get us back on the straight an narrow and finish the stadium and then flip it for a quick profit. Most of the signings at their clubs are clever data driven ones that fit a profile rather than big money ones.

 

[Davideeyore]

Absolute scenes if it turns out that Esk was right by the way lol

Most of us don't have a clue about this '777 partners'. But if they don't have the collateral, the question remains where are they getting the finance from?
Or, is it that Moshiri is selling for a quick sale, and has allowed 777 (in the loosest sense) to use Klarna to pay for it?


Also, anyone who thinks we're better sticking with Moshiri (rather than selling up) need to realise that apart from the very important matter of him not having any
funds available to him, that he's made an absolute pigs ear of the running of this football club. When Everton fans protest we don't just want the board out, we
want Moshiri and Kenwright to go too. I for one, don't believe a word that man says.

There seems to be an undercurrent of fans saying you can't have one with out the other. You can't get rid of Moshiri and then be unhappy with the new owner.
Bull. IF at all, Everton fans may well be the only "hope" in ensuring the wrong people don't take over Everton Football Club.

 

[Charles Hawtrey]

See this is what I don’t get and maybe some can explain it to me.

Yes, the loan to R&M funding will be secured against the club/business and its revenues, so how are they able to veto the ownership? As long as the club meets it repayments schedule, how can they have an issue (outside of the speculation we Kenwright). It couldn’t possibly be a contractual entitlement because no one in their right mind would allow a lender that sort of power. It would be akin to having a mortgage, getting married and wanting you wife to join the mortgage and the lender saying no surely?

Except in this case it would be getting married and divorced on the same day and leaving your wife to pay off the mortgage. They didnt lend the money to her so they might have some say on her assuming the debt.

 

[evertony]

None of us really know the financial position of Moshiri/Usmanov or 777 Partners - we're simply postulating on whatever is available in the mainstream media and on the web. And based on how much absolute misinformation there is across those platforms then it's odd that we're either very-Pro or very-Anti 777's intended takeover.

What every single Evertonian should want first and foremost is a Board of Directors that have the right blend of business acumen and understanding of top-level sport. We need a management Board that can navigate us out of the absolute tur(d)moil we've been embroiled in whilst still helping to make us competitive.

 

[Blue peter]

Except in this case it would be getting married and divorced on the same day and leaving your wife to pay off the mortgage. They didnt lend the money to her so they might have some say on her assuming the debt.

They have provided the loan to Everton, not the owners. Everton is still Everton regardless of who the owners are.

The only reason they may have objected, as I think others have indicated, and in light of the speculation around their ability to fund it, is if this is a leveraged purchase where the club pays back to loan taken out to acquire it, which potentially jeopardises payment of the loan to R&M, and presumably MSP would be in the same boat (even though I think that’s to Everton Stadium Ltd) but I’m sure someone mentioned that this type of acquisition has now been banned?

Im off to get an economics GCSE

 

[Toffe3m4n]

They must think there is money to be made, probably by finishing the stadium and selling us on.
Which, tbh, was Moshiri's (and by extension, allegedly Usmanov's) joint plan.
Events and Moshiri's incompetence have left them with no stomach / real money to finish the race.

If 777 goes through OR it doesn't
Does the PL really, really, want one of their founder members to fold - all in the name of regulatory compliance / pour encourager les autres??

I did wonder if they see us as a 'quick flip' type thing. Basically they use capital from their multi club system to get us back on the straight an narrow and finish the stadium and then flip it for a quick profit. Most of the signings at their clubs are clever data driven ones that fit a profile rather than big money ones.

I've mentioned it before - but it reminds me of the Shinawatra situation at City years ago. He mainly bought City to boost his reputation in Thailand with a short-to-medium term view on ROI via a similar 'flip'. He made roughly £120m when he sold them to the Mansours 18 months later.
.

 

[Martin Alvito]

See this is what I don’t get and maybe some can explain it to me.

Yes, the loan to R&M funding will be secured against the club/business and its revenues, so how are they able to veto the ownership? As long as the club meets it repayments schedule, how can they have an issue (outside of the speculation we Kenwright). It couldn’t possibly be a contractual entitlement because no one in their right mind would allow a lender that sort of power. It would be akin to having a mortgage, getting married and wanting you wife to join the mortgage and the lender saying no surely?

Certain provisions of the deal are public record, in much the same way they are in the United States on home loans. I can't read the terms of your home loan over here if I am so inclined, unless you hand me the note, but I can read your mortgage provisions (which confer the security interest to the bank) if I go to the local register of deeds. A security interest in real property is not actionable unless it is registered, and the government has an interest in ensuring that the provisions of that contract are compliant with state law.

If you read the terms that are public record, Moshiri conceded that degree of power (and a whole bunch of other non-standard stuff, relative to when I read the provisions of more conventional bank loans to football clubs). How did the lender get those terms? The implication is that Moshiri was in a bad way financially and didn't have a choice in the matter. If he had alternatives, he would have told them where to stick it. Since he didn't, he acquiesced.

 

[Streetender1878]

He said R&M were happy with it. Not said anything about MSP being happy, so it sounds like they are the potential blockage.

It's crazy all these conflicting interests having a say - R&M vetoed MSP so MSP loaned us some cash instead of their investment, now they have a say to block 777.

At some point the lenders have to realise that Moshiri has us on a path to insolvency and if that happens they don't get their money back. They can't go on vetoing new investors forever, even if it's ones they don't like.

Remember when we wanted to build on the park end and knocked part of the wall down on walton lane only for someone bill had taken loans out with objected and said they want paying before anything else can go ahead. How times have changed.

 

[T LEAFE]

Brian Rix would be proud

 

[Martin Alvito]

Then they are gambling on us not being relegated.

And hedging against that risk with provisions in the sale contract, according to media reports.

 

[Davideeyore]

They have provided the loan to Everton, not the owners. Everton is still Everton regardless of who the owners are.

The only reason they may have objected, as I think others have indicated, and in light of the speculation around their ability to fund it, is if this is a leveraged purchase where the club pays back to loan taken out to acquire it, which potentially jeopardises payment of the loan to R&M, and presumably MSP would be in the same boat (even though I think that’s to Everton Stadium Ltd) but I’m sure someone mentioned that this type of acquisition has now been banned?

Im off to get an economics GCSE

I got Economics GCSE in 1990 fat load of good that did me.

 

[pfim]

Certain provisions of the deal are public record, in much the same way they are in the United States on home loans. I can't read the terms of your home loan over here if I am so inclined, unless you hand me the note, but I can read your mortgage provisions (which confer the security interest to the bank) if I go to the local register of deeds. A security interest in real property is not actionable unless it is registered, and the government has an interest in ensuring that the provisions of that contract are compliant with state law.

If you read the terms that are public record, Moshiri conceded that degree of power (and a whole bunch of other non-standard stuff, relative to when I read the provisions of more conventional bank loans to football clubs). How did the lender get those terms? The implication is that Moshiri was in a bad way financially and didn't have a choice in the matter. If he had alternatives, he would have told them where to stick it. Since he didn't, he acquiesced.

Most commercial loans will have change of control covenants, where the lender has the ability to call in the loan should there be a change of a controlling interest in the club. This is fairly standard, it gives the lender an out should the controlling shareholder decide to throw his hands up and give the club away to a homeless guy (or Josh Wander).

It's also possible that Moshiri has personally guaranteed some portion of those loans, giving the lenders another lever. If they won't allow Moshiri to discharge his personal liability, it makes it far less likely that he'll agree to a sale.