Moshiri pledges to convert outstanding debt to equity if takeover lags

So an owner gives a club an interest-free loan but the Premier League decides that the club should be paying interest on this loanm so increases the club's 'costs' by the amount of interest they think they should have paid.

So the club breaches PSR rules because it has more losses than the rules allow. But it doesn't really if it's the amount of interest that the Premier League decide they should be paying that puts the club over the limit.

So a club could be deducted points for avoiding going in to debt?

The Premier League would either have to waive the points deduction or the club will be taking them to court for imposing a penalty that they haven't deserved.

And what interest rate do the Premier League decide they should impose on the club (LIBOR rate)? Maybe the club could negotiate a better interest rate than the Premier League think they should be paying! So again, another battle with the Premier League.

They really need to scrap this whole thing and start again or bin it completely.

If Moshiri converts his debt into shares, then that will devalue the value of the shares 'cos it's unlikely TFG will buy another 150,000 shares at the current price. They'll just pay the same total price, however many shares there are.

Whatever it takes will be worth it.

I'm no expert in financial matters of this level, but it all sounds a bit complicated.

I just want this done, so we can move forward.

Agree with you, Colin, he has been an unmitigated disaster from the moment he walked in the door. Fool.

Which won't be berthed in the Mersey but Monaco.

These changes were made in response to the recent court judgement in the Premier League v Man City case.

These are now the new agreed rules with 80% of Premier League clubs voting to back the change.

I don't think the difficulties you envisage will arise.

Moshiri's hands are tied somewhat because of the impending takeover.

Additionally, it's undoubtedly a complicated and expensive business and not something you're likely to do unless there's very good reason for making the change.

People don't like it when the tap gets turned off and my worry is that they are making it very difficult for any serious people who want to purchase Everton, lock, stock and barrel.

I'm getting worried about this sale, especially when you hear news like this, because every indication has been that the sale should be done this side of Christmas, and now we are hearing that Moshiri, who should be gone, is preparing for January, just in case this deal still hasn't gone through.

Maybe the goalposts have changed since Trump said he's going to be talking to Putin. Who knows?

A bit of perspective would be good!

This is perhaps, a way to hurry the process along, just in case the authorities were thinking that they could delay making the decision until after the 'magic' date of 11 January 2025.

Whatever the merits of the report, the club needs to be able to operate in the transfer market in the New Year, and any delays to the sale of the club will impede the ability of the club to strengthen the team.

Because the Premier League are a bunch of corrupt, incompetent moronic, untrustworthy gobshites.

I think a similar situation arose with respect to 777's proposed takeover. The Premier League said the delay arose then because 777 simply weren't providing the required information or responding to queries in a timely fashion.

Not saying it's a similar situation this time but it does take two to tango...

I honestly fear that, by the start of the New Year, we will need snookers if Dyche is left in charge.

How does Moshiri's statement pressure the Premier League to hurry things along?

I don't think it matters to them one way or another.

I think there is a lot of bad blood between Everton, Moshiri and the Premier League.

I'm not saying that it's a fact that the Premier League may be dragging it out, but it's certainly a possibility.

Doesn't this Guardian “exclusive” come from the dubious hand of Matt Hughes who – I think – was formerly with the Daily Mail sports team?

If so, I would treat all of his output with caution, as quite a lot of his copy on the subject of Everton FC during his time at The Daily Mail was way off the mark, so much so that numerous Toffees posted online in response to his fanciful articles.

Hughes had us relegated in successive seasons, he had Branthwaite sold to Man Utd, the list goes on. Step forward The Esk or The Bobble, I say!

You raise some interesting points that I was also wondering about … although with the impending date, surely conversion of such shareholder loans to equity becomes a no-brainer?

Yes, there's a theoretical dilution in share value – depending on the price agreed for the shares – but realistically both numbers are highly arbitrary.

And it really makes me wonder why this wasn't used as a means to circumvent the PSR breaches?

Perhaps it's too simple to be true but couldn't they have just converted more and more of the outstanding shareholder loan to equity to offset losses?

Or would it have needed to be new loans or just printing new shares that could have increased our income and thus reduced our losses — thus avoiding all the PSR nonsense?

I'm sure I must be missing something… but I'm not sure what?

Though claiming to be the majority shareholder, it seems that the holding Company has another shareholder and secured lenders have a say. There is also against the backdrop of a ongoing PSR process.

So all of the Friedkin Group efforts will be concentrated in sorting out the finances and getting proper Management systems in place.

I doubt the January transfer window will be a active one, the exception being it someone is sold.The Takeover is likely to go beyond January.

Shareholders Letter

Eric and Brendan, what do you guys see in the letter that's particularly interesting? Chong seems comfortable with, and complimentary of, the TFG team.

And I like the simple clarity of his explanation of the PSR changes, specifically that shareholder loans will no longer provide a PSR-neutral source of funding to a club, that only equity investment will now be permitted, and that TFG has already put in place a structure that will assure future investment in the team without violating PSR. I assumed that the Friedkins as business professionals would do that, but it's nice to have Chong's assurance.

I'm happy to say that I've just become a very, very, very, very, very small shareholder in the club myself (thanks to the share auction just completed through Albert E Sharp), based on my conviction that the Friedkins will be a good investment.

Nothing particularly interesting.

The club seems to be correctly positioning itself to follow the appropriate course of action in light of the changes to the rules concerning interest-free shareholder loans and the consequential impact on PSR.

Although given the chaos of the last few years... perhaps that in itself, is particularly interesting.

I think it's more interesting, however, that Moshiri actually felt the need to issue his statement at this juncture. Why the need?

Perhaps the estimated completion date of the takeover (mid-December) is in doubt and Moshiri is publicly assuring Friedkin that he'll take the necessary corrective action in their absence?

That said there is no market liquidity to speak of so I guess those who hold shares would know the estimated value is not exactly a reliable guide, especially in our situation.

What next, Easter?

IMO the increase of Share Capital to reduce debt could be seen as a sign of financial weakness or mismanagement if it was believed the company is issuing shares because it cannot meet its obligations or raise funds by other means.

Whilst one may say that this was the case anyway, the increase of share capital to reduce debt would be a clear indication that is the case. With existing lenders and Premier League scrutiny, it would have not been a wise move.

The fact that Moshiri seems to be prepared to walk away and The Friedkin Group appear to have finance and suitable expertise may mitigate the increase in share capital.

But there is a question of why The Friedkin Group would allow weakening of the influence that would result if they purchase Moshiri's increased share capital.

The fact that it is a large holding in comparison to other shareholders and the class of shareholder voting rights may cancel the reduced influence. Lenders security is against asset valuations and future revenues, not share capital.

Maybe because we would be up on a charge of deliberately circumventing PSR as was implied by the EPL in our player 'swap' with Villa?

Possibly leading to the problems I mentioned in post #1.

And maybe there could be one club that would deliberately make interest free loans as a direct challenge to the EPL over this? Even though it was their idea in the first place!

In reality, Moshiri may be trying to put pressure on The Friedkin Group to come to an agreement. Such is the influence and potential connections of some of the lenders that it may be that Moshiri's stance is not all his own motivation but other parties trying to get leverage in negotiations.

The assumption that all parties will act in the best interests of the club is not born out by past actions.

The club is just another debtor to them.

Pitch progress at Everton Stadium!

Everton FC. The best is yet to come. And it is coming...

A hotel close to the legacy park, not too far from the city centre and Bramley-Moore Dock.

I hear pundits saying Everton will survive, but these are guys who just look at highlights and don't have to witness watching us for 90 minutes.

Any team that goes a whole month without scoring is in serious trouble, and until we find a way to get this team scoring again, then relegation is a big possibility, irrespective of what the pundits say.

Many of us may have worked for a time in a failing enterprise when, for whatever reason – impending sale, bankruptcy etc – the leadership goes AWOL. It is morale-sapping and destroys performance, it's all too easy to slip into lethargy.

Getting the new ownership sorted is priority number 1, 2 and 3. I've always been unsure as to whether the problem is lousy manager or lousy squad (or both) but neither can be close to doing their best under the current circumstances and even if nothing else changed, I'd expect to see a bounce simply from the club having a direction again.

It worries me a lot therefore, that the sale has not been completed. True there is still time to meet the quoted expectation of completion but, given what has gone before…

Even if results are as poor as they expect in the next 4 weeks, given how consistent we are in our below mediocre performances, there is still time to rescue the position. We do still rely on there being 3 poorer teams than us but yet again, that look more than possible.

But another sale collapsing and I think there is a risk we literally fall apart as a club and if we do slip into the Championship, I have a horrible feeling it won't be at all easy getting out of it.

I've said this so many times that I'm like a stuck record – a new manager won't fix these inherent problems; granted, he might get us some more points on the pitch in the short term, but the long term fix has to come from the Boardroom.

Otherwise, we'll be forever stuck in rinse and repeat with whoever's in charge of the first team. There's a lot more riding on the new owners than one more shiny new manager in the dugout.

This does seem to be taking considerably longer than the tax dodger's takeover of Man Utd.

As far as I can see there are three possibilities;

1) The Friedkin Group (International)? or

2) Roundhouse Capital or

3) Toffee Investments

Which of these three is going to be named by the Premier League as being Approved (or not) by them when they have come to their conclusions? Is this a question that Michael might be able to answer or will it be a name I haven't mentioned above? I am seeking enlightenment so that I can watch out for the announcement which should come sometime soon if we are to believe the anticipated timeline spoken about.

Is that good or bad for the takeover?

The 777/A-Cap loan is unsecured so it doesn't need to be repaid for the club sale to be completed.

Bit of good news at last.

Is this any different from what we've been hearing for the last few weeks?

I can only assume all checks, whatever they are, have been carried out and been cleared by the Premier League, and TFG and the rest of us are now just awaiting the official confirmation and clearance from the Premier League.

Obviously TFG will know before it’s made public.

“ The necessary approval is believed to be close and the group, as anticipated from the start, are not likely to have encountered any issues that would be a roadblock to them completing on a deal. Major things such as proof of funds will not be an issue, and given his status as a member of the executive board of the European Clubs Association, there is little concern over the credibility of TFG chief, US billionaire Dan Friedkin.

The hope has long been to get the deal done before Christmas, and that remains the goal, with the process having been anticipated to take around 12 weeks in all from the moment that dialogue started with the relevant organisations.”

Honestly, not just me, but this just doesn't feel like the club we started supporting however many decades ago. I remember watching and reading about the demise of different clubs in a not dissimilar position, and that just seemed like galaxies away from us.

Yet here we are... :-(

As far as I can see there are three possibilities;

1) The Friedkin Group (International)? or

2) Roundhouse Capital or

3) Toffee Investments

Which of these three is going to be named by the Prem League as being Approved (or not) by them when they have come to their conclusions? Is this a question that Michael might be able to answer or will it be a name I haven't mentioned above? I am seeking enlightenment so that I can watch out for the announcement which should come sometime soon if we are to believe the anticipated timeline spoken about.

By the way The Esk has published a letter, sent by Colin Chong to the minority shareholders, indicating how their shares are to be dealt with which seems to meet with approval, which indicates that the necessary approvals are soon to be announced which means TFG will soon be in a position to complete.

I'd love to have a print-out of those whatsapp exchanges between Sean Dyche and Moshiri.

Mosh: Did we win? (Smiley Face)

Sean: Not this time(Thumbs Down)

Mosh: Did we score?(Anxious Face)

Sean: Not this time (Thumbs Down)

Mosh: Did we get a draw? (Angry face)

Sean: Not this time (Thumbs Down)

Mosh: Have you only got one emoji on your Nokia 3310? I'll message you again after the next match.

Sean: Thanks for the support! (Thumbs Down)

My earlier post was copied from a thread in October when the article written by Michael told us about TFG had registered a new Company with Companies House. Sorry if I managed to confuse anyone.

Congratulations, you are officially more of a pessimist than even I am! I think even we might be able to survive in the Championship, certainly with the parachute money for a year or so. But then Peterborough have a chance to prove you right!

Granted I am a bit jumpy right now about the takeover, but the news above about A-CAP cannot in my view be easily brushed aside. Whether it is a major issue is unclear and will depend on agreements between the various counterparties but a liquidation would bring a new partner onto the scene in the form of the liquidator and that surely adds a risk of complication?

All that I see about this takeover would suggest no issue with approvals but we don't yet have them and we appear to be cursed in this department, perhaps because our enterprise is not as straightforward to acquire as some takeovers.

So a bit of optimism to finish. I just read a report that said Moshiri's agreement to capitalise his debt will free up over £20m in 'fair interest' that would have been added to our PSR. In theory that is an extra £20m plus on transfers. It does of course depend on Moshiri actually capitalising his loans...

I should have given a link to the letter and commentary posted by The Esk. Sorry. Here it is:

Letter to Everton shareholders re the treatment of Bluesky Capital’s shareholder loan & the takeover, what happens next?

It's nice of Colin Chong to send out such a respectful letter, even though it can't be that informative at this stage.

I can't really answer your question @50. Everyone talks about The Friedkin Group but the shares may well actually be bought by Toffee Investments — just as everyone talks about Moshiri owning 94.1% but those shares are actually held by Blue Heaven Holdings.

Paul Quinn tries to generate some mischief with his claim that "Legally the Friedkin Group will have the right to acquire all minority holdings."

There may well be rules like that for publicly traded shares but my understanding is that, for privately held Everton Shares, the minority ownership and their interests are pretty well protected in law. Hopefully Mike Gaynes is suitably reassured about the security of his precious new investment!

Premier League, kindly tell us how many points we'll lose if this doesn't happen.

Preferably on the same day you let Man City off scot-free. You know, just to really rub it in.