Leicester and PSR for 23/24

[Feidlimid]

What’s the point in borrowing money when we can barely spend anyway thanks to PSR

Hence my question. Maybe the board have decided that their offices need a refurb.

 

[LoopisDeLupis]

What’s the point in borrowing money when we can barely spend anyway thanks to PSR.

It’s for the independent consultants to analyse where Rudkin and Whelan definitely haven’t made any mistakes

 

[SilverFox]

We don't know what it will be used for. We assume the tranfer kitty, or to assist cash flow, or whatever

What I don't get is why we're taking such loans when we have a supposed money bags owner. Are we not allowed to borrow from Top/KP? Have we reached the limit on that source?

We are indeed allowed to borrow from them. No idea why they keep borrowing from these sharks. Enormous interest sounds fun.

 

[Joe_Fox]

We are indeed allowed to borrow from them. No idea why they keep borrowing from these sharks. Enormous interest sounds fun.

They are just a bank, and probably have more favourable interest rates. Better than going to say Barclays.

 

[LoopisDeLupis]

They are just a bank, and probably have more favourable interest rates. Better than going to say Barclays.

Hasn’t @Brown Nose previously looked into Macquarie and concluded their setup is geared towards football clubs (payments based on tv revenue) rather than a more traditional monthly/annual type payment?

 

[fitz]

What’s the point in borrowing money when we can barely spend anyway thanks to PSR. We must be pretty near the limit as to how much more we can spend after spaffing away a shitload in the summer.

Probably cash flow. What's the timing of payment for tv deals etc...

 

[SilverFox]

I don’t get it. If money is tight why can’t we borrow from KP and pay it back without extortionate interest. These guys like borrowing against revenue we might not have.

 

[fitz]

I don’t get it. If money is tight why can’t we borrow from KP and pay it back without extortionate interest. These guys like borrowing against revenue we might not have.

Depends on the rates....I've not looked tbh. They might get a better rate investing that money elsewhere than the loan rate?

 

[M17TT C]

I don’t get it. If money is tight why can’t we borrow from KP and pay it back without extortionate interest. These guys like borrowing against revenue we might not have.

I'd guess KP Group is not massively cash rich??

 

[Joe_Fox]

Macquarie offer competitive rates to general public for mortgages, etc so guessing their corporate rates are equally competitive. I really don't think their choice of loan provider is anything peculiar. Certainly not worth the focus it seems to be getting. I mean, we have bigger problems, don't we? I mean, spending £25 million on a Skipp might be more concerning.

 

[LoopisDeLupis]

Macquarie offer competitive rates to general public for mortgages, etc so guessing their corporate rates are equally competitive. I really don't think their choice of loan provider is anything peculiar. Certainly not worth the focus it seems to be getting. I mean, we have bigger problems, don't we? I mean, wasting £25 million on a Skipp might be more concerning.

Fixed for you

 

[Feidlimid]

Could be some kind of question/limit with regard to equity? Who knows. Loads of questions, all of them interesting in their own way (depending on what floats your boat) Few of us in a position to know the answers. Conjecture fills the void, and the forum

 

[Rock Fox]

We don't know what it will be used for.

We've got a state-of-the-art training centre, but this is for the new, and much needed, re-training centre.

 

[Robin127]

...and much needed, re-training centre.

Is for the fans who write articles that piss the club off?

 

[Jeff]

https://www.lcfc.com/pages/en/media-article/lcfc-chairman-approves-further-debt-to-equity-conversions?tblci=GiALo9Bx0xzuLpUJXsHjHXpOSR2KG6L_LKKQOetz3fXbhiDi3kUo47KsrtLsi9L1ATDTh0M

Leicester City Football Club today announces two new issues of shares to King Power International and Aiyawatt Srivaddhanaprabha, relieving the Club of a combined total of £124m of debt to its parent company and owner.

The share allotments, filed with Companies House this week, capitalise previous loans from KPI and Khun Top which have supported the Club’s recent development. The move strengthens the Club’s balance sheet, reduces interest costs and relieves the Club of all remaining shareholder loans.
This latest debt-to-equity conversion takes the Srivaddhanaprabha family’s overall investment during its ownership of Leicester City to over £420m. The Club remains grateful for the family’s unwavering support and for the long-term security they continue to provide.

 

[HFox]

PRFC

Credit card needed paying off

 

[jb5000]

In a PSR world what does this actually change about the club?

 

[Feidlimid]

In a PSR world what does this actually change about the club?

Nothing as far as I know sadly (but I wait to be corrected!) Interest on loans?? How might that be treated in the PSR calc?

But either way it's great for the club to have a money bags owner to effectively wipe debt.

 

[lcfcrules]

In a PSR world what does this actually change about the club?

The interest expense on the loans will disappear because the debt has gone, which would reduce the losses and may help PSR calculation.

From the perspective of how much money the club has to spend, no difference as even though interest is charged on the debt, the club never pays the interest, so whether the club continues to accumulate unpaid interest or the debt is written off to avoid further interest is irrelevant in this regard.

It’s effectively Top lent money to the club that he will never get back, so he may as well turn it into a capital injection rather than calling it a loan.

 

[homer]

In a PSR world what does this actually change about the club?

Interest payments are included in the calculations so makes our PSR position slightly better by a few million, but not huge amounts

Good bit of PR in advance of the planned demo at the Arsenal match - might throw in a free coconut as well in the hope it all goes away