777 Partners / Whatever the hell you like

[degsy]

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.

No 'Wonder' about it in my mind at all - 100% nailed on quick...3yr?...flip

Disclaimer; all this is back of a beer mat calculation.

94% of the shares? depending on circumstances - £300/500M paid over a few years - who knows how many?
Finish the Stadium - £350M? paid tranches over 18 mths?
Existing debt - £250...which could be left on the books for now

Best case for 777; they get a PL Club and new Stadium for (300+350) £650M
Worst case; (500+350+250) £1,100M

Maybe being able to dangle a PL Club + New Stadium for sale that you've bought on the relative cheap must seem a good deal

 

[pfim]

No 'Wonder' about it in my mind at all - 100% nailed on quick...3yr?...flip

Disclaimer; all this is back of a beer mat calculation.

94% of the shares? depending on circumstances - £300/500M paid over a few years - who knows how many?
Finish the Stadium - £350M? paid tranches over 18 mths?
Existing debt - £250...which could be left on the books for now

Best case for 777; they get a PL Club and new Stadium for (300+350) £650M
Worst case; (500+350+250) £1,100M

Maybe being able to dangle a PL Club + New Stadium for sale that you've bought on the relative cheap must seem a good deal

Not only bought on the cheap, but seemingly with very little cash changing hands at closing.

 

[Martin Alvito]

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.

Fair rebuttal. I don't recall those provisions in the other stuff that I read, but I'll cheerfully concede legalese being a second language. I'm fluent, but my memory could be wrong, and the sample of other deals I looked at were also peanuts by comparison and made to clubs in much stronger financial positions. If you're extending a short-term revolving line of credit to a healthy borrower when playing for these stakes, you don't need a call provision. That problem will sort itself out one way or another.

I will stand by the statement that some of the other provisions in the R&M loan seemed bonkers both in comparison to what I would expect in such contracts over here, and what I read in more conventional bank contracts.

Personal guarantees are a good point to raise, as they wouldn't be found in the public portion of such a contract, at least over here.

 

[pfim]

Fair rebuttal. I don't recall those provisions in the other stuff that I read, but I'll cheerfully concede legalese being a second language. I'm fluent, but my memory could be wrong, and the sample of other deals I looked at were also peanuts by comparison and made to clubs in much stronger financial positions. If you're extending a short-term revolving line of credit to a healthy borrower when playing for these stakes, you don't need a call provision. That problem will sort itself out one way or another.

I will stand by the statement that some of the other provisions in the R&M loan seemed bonkers both in comparison to what I would expect in such contracts over here, and what I read in more conventional bank contracts.

Personal guarantees are a good point to raise, as they wouldn't be found in the public portion of such a contract, at least over here.

I've been involved (not as an owner) in these sorts of contracts, it's fairly standard

In the Daily Mail article, they make mention of it in the second paragraph.

IN THE MONEY: Everton's £500m sale could be at risk of collapse

IN THE MONEY: Everton's sale to Miami-based investment firm 777 Capital Partners is at risk of collapsing after it emerged that major lenders at the club are not in favour of the deal.

www.dailymail.co.uk

 

[kenada_blue]

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.

It's how I see it.

The worry for me is always on the pitch. With their current approach it could end poorly and we'd drop like a stone.

 

[Martin Alvito]

I've been involved (not as an owner) in these sorts of contracts, it's fairly standard

In the Daily Mail article, they make mention of it in the second paragraph.

IN THE MONEY: Everton's £500m sale could be at risk of collapse

IN THE MONEY: Everton's sale to Miami-based investment firm 777 Capital Partners is at risk of collapsing after it emerged that major lenders at the club are not in favour of the deal.

www.dailymail.co.uk

If we're talking about real money like the R&M deal, sure. If we're talking comparative chump change as these things go on a short term, not so much. This may be an interesting difference between the respective sides of the pond, where I missed/glazed over something when I was reading. In general, over here you're stuck acting against a security interest, or at the mercy of a bankruptcy court when it comes to defining priority by date in, reaffirmations and asset class. If you have an unsecured loan to an entity and that entity is sold to someone less creditworthy, too bad. You should have priced that one in.

That doesn't appear to be how things work over there, as I'm learning more about the differences between administration and bankruptcy. If I file a second mortgage at the register of deeds and it goes bad, my options against the security interest are to buy the first mortgage out and take action, or write the whole thing off until the property is sold and recover what I can then. If I have a second lien on your car, I can't do squat until the first lien is paid off. Then, I can pop your car and sell it out from under you. If you had a first lien/mortgage and didn't file it in time, too bad. I am now in first position.

Your approach to these problems seems rather different, and I don't mind admitting that I still don't fully grasp it after a fair amount of research.

 

[Streetender1878]

Why dont the club use some of the near £200m its raised in transfer fees since last summer to pay some of the debt off with r&m funding? Its not like weve bought players with it. Wasnt richarlisons fee and gordons fee virtually all paid up front? If r&m are the stumbling block when it comes to investment they need getting rid of as quick as possible.

 

[Eggs]

Why dont the club use some of the near £200m its raised in transfer fees since last summer to pay some of the debt off with r&m funding? Its not like weve bought players with it. Wasnt richarlisons fee and gordons fee virtually all paid up front? If r&m are the stumbling block when it comes to investment they need getting rid of as quick as possible.

…I’d be surprised if those monies are still within clubs coffers.

 

[Neiler]

 

[Tony’s Carp]

Probably more snappy in the original German

 

[kenada_blue]

Why dont the club use some of the near £200m its raised in transfer fees since last summer to pay some of the debt off with r&m funding? Its not like weve bought players with it. Wasnt richarlisons fee and gordons fee virtually all paid up front? If r&m are the stumbling block when it comes to investment they need getting rid of as quick as possible.

Gone towards turning a profit on the 2022/2023 books.

We'll look good on paper for the commission

 

[Martin Alvito]

Probably more snappy in the original German

Mandarin also loses a lot in translation. Political slogans over the decades in that language become incredibly tedious when rendered into English.

 

[Streetender1878]

…I’d be surprised if those monies are still within clubs coffers.

This is what i would like to know. If it hasnt been spent on players,the wage bill has been reduced and we arent using it to pay the debt off theres only the new ground left. If our situation is as simple as we were fine up until putin invaded ukraine and now moshiri has been blacklisted and cant access credit from usual sources all savings made are going to the ground i could see that as where the money is going. But if r&m are blocking future investment they should become the priority of getting rid of.

 

[Number_25]

Anyone else concerned?

 

[pfim]

If we're talking about real money like the R&M deal, sure. If we're talking comparative chump change as these things go on a short term, not so much. This may be an interesting difference between the respective sides of the pond, where I missed/glazed over something when I was reading. In general, over here you're stuck acting against a security interest, or at the mercy of a bankruptcy court when it comes to defining priority by date in, reaffirmations and asset class. If you have an unsecured loan to an entity and that entity is sold to someone less creditworthy, too bad. You should have priced that one in.

That doesn't appear to be how things work over there, as I'm learning more about the differences between administration and bankruptcy. If I file a second mortgage at the register of deeds and it goes bad, my options against the security interest are to buy the first mortgage out and take action, or write the whole thing off until the property is sold and recover what I can then. If I have a second lien on your car, I can't do squat until the first lien is paid off. Then, I can pop your car and sell it out from under you. If you had a first lien/mortgage and didn't file it in time, too bad. I am now in first position.

Your approach to these problems seems rather different, and I don't mind admitting that I still don't fully grasp it after a fair amount of research.

It's not that different.

MSP and R&M have security interest against assets, they get first dibs in a bankruptcy/administration. They also have lending covenants, rules that EFC must follow or they have the right to call in the loans. These are often related to financial performance, control, disposition of assets etc. Effectively they are in place so that the lenders' claim on assets is preserved.

You can see these in mortgages for a house: you are required to maintain insurance, pay property taxes etc.

Unsecured is completely different, as you suggest. You leant the business money (likely for services/goods), sucks if they don't pay. Your claim is behind the secured lender, and if there's a liquidation it's highly unlikely you see any payout unless there is some sort of government act that puts your claim above a secured creditor (or on par).