' Leicester City's owner wipes out all debt £103 Million '
Fri Jan 31, 2014 1:58 pm
Friday 31st January 2014.
The financial future of Leicester City has been secured after the owner effectively wiped out the club's £103 million debt.
Chairman Vichai Srivaddhanaprabha has swapped the huge liabilities for shares in City, meaning he or his family can no longer call in what they are owed and potentially destabilise the club.
The massive debt, racked up after the club reported £52.5 million of losses in the three seasons to 2011-12, had led to concern among fans about the Foxes' long-term financial health.
It is believed the club, which has received more than £75 million in loans from Mr Srivaddhanaprabha, is now almost debt-free for the first time in at least two decades.
Documents filed with Companies House show a deal has also been done to give the club a £10 million cushion, allowing it to effectively make an £8 million loss this season – the limit allowed before it faces a fine or transfer embargo.
The process used by Thai owner Mr Srivaddhanaprabha, known as a "debt-for-equity swap", has also been used by the owners of Manchester City and Chelsea.
Financial expert and City fan Andrew Howard, of Thorpe Astley, said: "It means the club no longer has any debt, or at least very little debt such as that associated with day-to-day trading.
"The owners can't call in those loans any more."
"It's a sign of commitment which shows the owners are in it for the long haul."
The club declined to comment yesterday.
The deal values the club at £118 million on paper, compared with the £39 million paid by the Thai businessman when he bought the club from Milan Mandaric in 2010.
However, it is unlikely the chairman would receive that amount should he decide to sell.
"It could be worth £65 million to £70 million if they get established in the Premier League," said Mr Howard.
Mr Howard said there was nothing stopping Mr Srivaddhanaprabha – estimated to be worth £1 billion – from pumping more loans into the club in the future through his King Power duty free business, as he has previously done.
The club, which bought the King Power Stadium from an American pension fund this year, was £26 million in debt when the tycoon took control.
Cliff Ginnetta, chairman of the Official Leicester City Supporters' Club, said the move would reassure fans concerned about the long-term future of the club.
"The debt was a ridiculous amount of money when you looked at it," he said.
"It made you think 'How are they going to get that back?' and you wondered about the long-term future of their involvement."
John Regan, 61, of Anstey Lane, Leicester, who has supported City for more than half a century, said: "It looks like the fans can now be more confident about the club's financial future. I'm sure this will be a big talking point at the QPR game."
•Read Ian Griffin's blog explaining why City's owner wiped out the club's entire £103m debt, and how he was able to do it
Read more: http://www.leicestermercury.co.uk/Futur ... z2rz5sUjUO
The financial future of Leicester City has been secured after the owner effectively wiped out the club's £103 million debt.
Chairman Vichai Srivaddhanaprabha has swapped the huge liabilities for shares in City, meaning he or his family can no longer call in what they are owed and potentially destabilise the club.
The massive debt, racked up after the club reported £52.5 million of losses in the three seasons to 2011-12, had led to concern among fans about the Foxes' long-term financial health.
It is believed the club, which has received more than £75 million in loans from Mr Srivaddhanaprabha, is now almost debt-free for the first time in at least two decades.
Documents filed with Companies House show a deal has also been done to give the club a £10 million cushion, allowing it to effectively make an £8 million loss this season – the limit allowed before it faces a fine or transfer embargo.
The process used by Thai owner Mr Srivaddhanaprabha, known as a "debt-for-equity swap", has also been used by the owners of Manchester City and Chelsea.
Financial expert and City fan Andrew Howard, of Thorpe Astley, said: "It means the club no longer has any debt, or at least very little debt such as that associated with day-to-day trading.
"The owners can't call in those loans any more."
"It's a sign of commitment which shows the owners are in it for the long haul."
The club declined to comment yesterday.
The deal values the club at £118 million on paper, compared with the £39 million paid by the Thai businessman when he bought the club from Milan Mandaric in 2010.
However, it is unlikely the chairman would receive that amount should he decide to sell.
"It could be worth £65 million to £70 million if they get established in the Premier League," said Mr Howard.
Mr Howard said there was nothing stopping Mr Srivaddhanaprabha – estimated to be worth £1 billion – from pumping more loans into the club in the future through his King Power duty free business, as he has previously done.
The club, which bought the King Power Stadium from an American pension fund this year, was £26 million in debt when the tycoon took control.
Cliff Ginnetta, chairman of the Official Leicester City Supporters' Club, said the move would reassure fans concerned about the long-term future of the club.
"The debt was a ridiculous amount of money when you looked at it," he said.
"It made you think 'How are they going to get that back?' and you wondered about the long-term future of their involvement."
John Regan, 61, of Anstey Lane, Leicester, who has supported City for more than half a century, said: "It looks like the fans can now be more confident about the club's financial future. I'm sure this will be a big talking point at the QPR game."
•Read Ian Griffin's blog explaining why City's owner wiped out the club's entire £103m debt, and how he was able to do it
Read more: http://www.leicestermercury.co.uk/Futur ... z2rz5sUjUO
Re: ' Leicester City's owner wipes out all debt £103 Million
Fri Jan 31, 2014 3:04 pm
Looking at their league position I think he didn't have much choice.
Entering the Prem next year with massive debts would incur major fines.
Tan will do the same should we go up. Don't know what the consequences will be in the Championship with a large debt.
Looks like Leicester may hit the Prem in a perfect situation both on and off the pitch.
Still hate the fuckers for how they originally got in the prem with a new stadium by going into admin, not paying their debts and, back then, not losing ten points.
They are basically the reason the ten point deduction came in.
Entering the Prem next year with massive debts would incur major fines.
Tan will do the same should we go up. Don't know what the consequences will be in the Championship with a large debt.
Looks like Leicester may hit the Prem in a perfect situation both on and off the pitch.
Still hate the fuckers for how they originally got in the prem with a new stadium by going into admin, not paying their debts and, back then, not losing ten points.
They are basically the reason the ten point deduction came in.
Re: ' Leicester City's owner wipes out all debt £103 Million
Fri Jan 31, 2014 3:10 pm
Wayne S wrote:Looking at their league position I think he didn't have much choice.
Entering the Prem next year with massive debts would incur major fines.
Tan will do the same should we go up. Don't know what the consequences will be in the Championship with a large debt.
Looks like Leicester may hit the Prem in a perfect situation both on and off the pitch.
Still hate the fuckers for how they originally got in the prem with a new stadium by going into admin, not paying their debts and, back then, not losing ten points.
They are basically the reason the ten point deduction came in.
Go up to where is there another league higher than the prem
Re: ' Leicester City's owner wipes out all debt £103 Million
Fri Jan 31, 2014 3:25 pm
Pontyclun Blue wrote:Wayne S wrote:Looking at their league position I think he didn't have much choice.
Entering the Prem next year with massive debts would incur major fines.
Tan will do the same should we go up. Don't know what the consequences will be in the Championship with a large debt.
Looks like Leicester may hit the Prem in a perfect situation both on and off the pitch.
Still hate the fuckers for how they originally got in the prem with a new stadium by going into admin, not paying their debts and, back then, not losing ten points.
They are basically the reason the ten point deduction came in.
Go up to where is there another league higher than the prem
Jesus, I thought all this stuff going on this season couldn't really be happening. I've been dreaming, we're still in the Championship with Malky as manager!!!
Re: ' Leicester City's owner wipes out all debt £103 Million
Fri Jan 31, 2014 3:26 pm
Pontyclun Blue wrote:Wayne S wrote:Looking at their league position I think he didn't have much choice.
Entering the Prem next year with massive debts would incur major fines.
Tan will do the same should we go up. Don't know what the consequences will be in the Championship with a large debt.
Looks like Leicester may hit the Prem in a perfect situation both on and off the pitch.
Still hate the fuckers for how they originally got in the prem with a new stadium by going into admin, not paying their debts and, back then, not losing ten points.
They are basically the reason the ten point deduction came in.
Go up to where is there another league higher than the prem
I stopped reading when he said "Tan will do the same should we go up"
Re: ' Leicester City's owner wipes out all debt £103 Million
Fri Jan 31, 2014 3:51 pm
Pontyclun Blue wrote:Go up to where is there another league higher than the prem
Very, very petty Pontyclun. I thought better of you.
STAY UP.
Re: ' Leicester City's owner wipes out all debt £103 Million
Fri Jan 31, 2014 3:54 pm
CardiffBatman888 wrote:I stopped reading when he said "Tan will do the same should we go up"
Don't worry you didn't miss much.
Re: ' Leicester City's owner wipes out all debt £103 Million
Fri Jan 31, 2014 5:30 pm
And he is happy to embrace their history, tradition and colour, well run club 
