Moshiri is about to lose control of Everton — the question is to whom?

Definitely sounds like pure soap opera, and proof that Bill Kenwright, found himself/us the most idiotic billionaire on the entire planet.

Other parties might have the right to buy, but they surely need the financial clout and the appetite to go with that right. Despite passing the 11th hour, no-one has shown serious interest.

I've seen various posters speculate whether that's a chance to reset and "do a Leicester". My concern is that we are more likely to do a Sheffield Wednesday – or perhaps at the very least, a Leeds, where a well-supported club with a big stadium ends up being passed from one unfit owner to another in an extended period of wilderness in the third and second tier of English football.

Leeds (like Newcastle) operates as a one-city club. Leicester too. We're different. If we go bust or down and Liverpool continue winning, we'll lose a future fanbase too. Doesn't bear thinking about.

If MSP want to take control, then they'll just say No, and if they don't, then they re-negotiate and 777 Partners stay in the frame.

The Premier League's condition just puts back the wait for the sale until mid-April, when MSP have been paid, and then the Premier League give the go-ahead, maybe.

Moshiri lost control of Everton years ago. What's happening now is the logical conclusion. Of all the billionaires in the world, we ended up with a multimillionaire accountant that can't seem to count.

I just want the longest season in Everton history to end!

Paul, correct me if I'm mistaken, but interest payments could exceed £50M annually from next season.

How can this be paid back on a sub £200M annual turnover?

I believe that the recent loans from 777 Partners will be converted into equity if the takeover is successful.

The life has already been sucked out of Everton Football Club but it's now affecting the incredibly loyal fanbase on an hourly basis with some of us even preferring administration rather than getting taken over by a group that have already been given 7 months, to prove they have the necessary funds, but still need longer.

Even if you entirely wipe out Moshiri's loans, that still leaves us with £450m plus of debt. This for a business that doesn't currently produce even £200m of revenue and the net additional stadium revenue would be unlikely to cover the interest even on that much-reduced debt pile, which will likely have to expand to accommodate full completion of the stadium.

Moreover, we carry a huge jeopardy in the form of relegation, either through our atrocious form, or further points deductions, or both.

In total, the club has had well in excess of £1 billion invested. I don't think I have seen such a comprehensive destruction of value in such a short period of time. That takes skill.

In my view, the letter from the Premier League is just getting their excuses in early for when we slide into administration, probably accompanied by a flurry of lawsuits from various parties.

And then the new owner has to provide additional funds for player acquisition and day-to-day running costs. Probably seeing him run foul of PSR again!!!

Whether or not 777 Partners are approved, the financial situation facing any new owner which the Esk sets out are daunting. I note his preferences, in order, seem to be first MSP, second, administration, third 777 Partners.

I am sure uncertainty is going to drag on for quite a while yet.

Pleased to hear again from John Zapa (6) who posted many warnings about the impact of the BMD cost on our finances (hope I have expressed his comments correctly).

And a good point you make, John, about interest payments.

I can't claim to understand all the detail in Paul's article, certainly not in one read, but for quite a while I have feared administration.

I prefer staying in the Premier League and remain hopeful we beat the drop this season... and the one after.

To that end, should we go into administration, I just hope it is after the end of this season. We've had more than enough points deducted for one campaign.

And, as Tony Abrahams said last night on another thread, I believe it is crucial that Evertonians support the team as much as possible in the run-in, although I am well aware of the weariness and emotional fatigue in the fanbase.

So what's to stop MSP taking over in mid April? And how come there are all these opaque organisations with their fingers in our pie?

And Robert at 3 since we won our last trophy Liverpool have won everything on offer and it's not like we have been abandoned as we still fill Goodison and our away support is second to none.

John [6]

Thanks for bringing this up. We have fallen (in revenue terms ) from £193m in 20/21, to £181m in 21/22 and we'll find out by Tuesday next week what the 22/23 accounts show.

Also in that same time our losses have gone from circa £36m to circa £47m.

Plus, we still have to fund the White Elephant that is BMD too till at least Dec'24...

John, or Paul, have you any idea how much additional revenue will BMD bring in with the figures currently being bandied around for the 'projected' BMD income?

Also, if any new owner comes in, surely they are going to have to 'monetise the fan base, as 777 have stated, and exactly what FSG did across the way?

I understand that the fanbase is opposed to this, and indeed it might drive away quite a few loyal fans; but isn't the fact that our commercial and marketing departments have not increased net income and revenue, been partially to blame for the Kenwright years, never mind his self-interest, and greed; and then the financial prodigality (or lunacy?) of the Moshiri years?

I'd I appreciate your thoughts if you have the time?

It's been really good reading your other recent posts on other threads, and good luck to your lad and your step-son with their respective careers.

Getting back on track, I genuinely hope that we have someone who is 'extravagantly wealthy' waiting for the door to Moshiri's office to open. I.e. Once 777 and Moshiri realise there is no traction in continuing to hope for EPL (or rather the 'Independent' Oversight Commission) giving approval for their proposed takeover.

As I understand it, from reading Paul's recent articles, and elsewhere on the web (NB Not News Now articles) To stand pat as it were, we have need of a way to pay off or restructure the following;

NB IF NOT 777 taking us over;

RMF @£225m (Increasing due to interest)

777 @ C£180-185m (Increasing due to interest)*

MSP/Blythe @ £158m (Needs paying mid-April '24)

Metro Bank @ £20m (Fortunately, reducing year on year and Government guaranteed)

Plus approximately, somewhere depending on where and who you read, between £100m and C£150m to complete the stadium.**

Then ignoring how it is broken down, Moshiri has invested approximately £830m (as far as I can work out?) of his (and Uncle Ali's money?) into the club, from the initial share purchase to stadium and club loans, player investment, cash (equity) injections etc.

I know that Moshiri will probably have to take a bath for his monies, but with 777 willing to pay between £62m and £130m for the club; I'm pretty sure you could add between another £50-100m to the debt pile...

So using the lower figures, whoever would like to take us on would need to raise £733m in capital.

If you use the higher figures, they would need, £858m.

Even though the club is theoretically in debt much more than that (cv Moshiri's investments) the club, if taken over by someone with a serious amount of money/credit behind them could come in and then stabilise and take stock of the club.

If your Titanic Hotel investors had £1Bn squirreled away for the take over, that would leave some monies to alleviate the initial debt issue, and leave some to service the 'operational' costs and commitments, plus hopefully stave off a fire-sale in Summer, though not leaving much, if anything for player investment etc.

However as Michael K is so fond of saying, let's just wait and see.

We have the IC decision first (Tuesday or Wednesday presumably)

The decision to appeal or not (if there is anything to appeal?)

Then the MSP loan repayment deadline.

I would hope that there would at least be 'clarity' (of sorts) regards the EPL PSR, and 777 takeover by the end of April '24...

* Remember it was reported that 777 were borrowing at exorbitant rates up to 52% if the reports on the internet were to be believed.?

** There is the potential, that if 777 do not get the go ahead, then funding for the stadium would have to come directly from Moshiri (or A.N. other party) else we'd fall foul of the contractual payment obligations to LO'R which would lead to even higher construction costs. As Paul would say, punitive charges for not maintaining our side of the contract.

Good news all round really! (sic!!)

All down to Kenwright and his 'chosen' Messiah for the club! Or was it for him?

22/23 Revenue has fallen to £172.2, and losses have increased from c£45m to £89.1m..

Oh happy days! 😂

Although this group are confident they will eventually purchase Everton, and have already proven they have the funds, I have also heard that nothing would surprise them, because they are aware of how very murky things actually are.

Whatever their intentions it will take time for approval unless it a very transparent structure bid.

If it's, as you intimate, ‘murky', how much longer with this purgatory continue?

I had a headache with it all a couple of weeks ago but it's settled down because I don't expect anything is imminent, but I can already tell it's going to definitely start coming back once we get to the middle of next week.

On another thread, it is stated as a condition of Premier League approval of ownership that 777 Partner pay the MSP debt, not Moshiri.

So are the Premier League delaying 777's approval until mid-April, when the debt is paid? And if so, what right have they to tell someone who doesn't own the club that they must pay off someone else's debt?

According to those ITK, the condition for 777 Partners to pay off the MSP/Blythe loan has always been a condition of approval from Day 1. Due to the loan clause inserted by MSP/Blythe.

The deadline for the loan repayment is sometime mid-April.

At the danger of being an ass, I would presume that the Premier League have told 777 Partners at the face-to-face meeting, time to put up or go away. Put your money where your mouth is or walk away from the deal.

In fact, all four conditions for approval have been known to 777Partners snd Moshiri since Day 1... again according to those ITK, eg, Ornstein, Paddy etc

You're welcome re the kids. 👍

When you say 'they' know it's murky. Is there any idea as to what is murky?

Is there shadow partners and that sort of thing going on, or is it the opaque money sources, eg, R&MF and Moshiri's loans (not to mention the 777 Partners loans) that are muddying the waters as it were?

I think Ray [20] is nearer the truth.

Let's look at it.

Fundamentally, it is obvious that 777 Partners do not have the capability to pay off MSP/B their £158M, or they would have already done so.

Why would Moshiri pay £158M to retain control when:

a) He is probably expecting (as a guesstimate) between £0 and £130M on the sale of the club??

b) When he hasn't stuck his hand in his pocket to pay off the stadium when he said he could...?

c) He hasn't put a penny into the club since MSP/B injected their loan into the club.

Lastly, if MSP/B do exercise their right of ownership by loan default (snatch-back?) and gain 50% plus 1 share of the company, then the 777 deal becomes null and void.

Also, R&MF do not have the option to 'Blackball' them again.

Then MSP/B could ask for haircuts from all creditors, or pay the loans in a structured repayment plan, which could probably (again a presumption) mean that they'd possibly drive 777 Partners into insolvency, if they could keep the repayments delayed enough.

Not to mention restructure the debt into a more manageable form. Maybe even take over the club via the 'snatch back' and flog it to your group...?

There is hope, but it depends on new ownership, and the team picking up enough points in the last 9 games to stay in the Premier League.

Food for thought...

I agree with your explanation of how Blythe and MSP may pull this off. I also think their strategy will be to wait until the very last moment before swooping in.

The lads involved have a record of using their leverage at the opportune moment and having nerves of steel.

I loved that; or even it would take a cunning fox, in cunning town, in the country of cunning on cunning day, to possible even have a chance of unravelling the complexities around our finances currently...

Thanks for putting a smile on my face, Charles, and giving me a little chuckle too! 🤣

There is no doubt that MSP/BC are definitely in the driving seat now. However, whilst I've been away, I've realised that the debt isn't in itself a problem.

The problems are as John Zapa [6] pointed out, it is the accrued interest that is the problem.

The club just does not have a large enough revenue stream and sources of income to 'stabilise' currently, never mind 'grow or improve'.

We moan about Man Utd being over £1B in debt, but their massive income/revenue streams easily service their interest payments.

If a takeover does occur, before a possible administration, the immediate debt could be serviced much like how 777 Partners are doing it, through using a combination of low-interest loans and equity injections.

The historic debt would probably be shaved (or creditors taking a haircut) to reduce the outstanding, then hopefully a restructured 'rescue' loan package to help us out over 3-5 years or longer if necessary. Whereas Moshiri would have to take a bath for now.

The bloated workforce would have to be trimmed off course (thanks, Barrett-Baxendale), EitC would probably have to be cut loose as a separate trading entity, the plans for the Goodison site might have to be rejigged to raise additional cash reserves, even to the extent that Everton Ladies might have to be cut for a period of time while the club stabilises its finances?

Then of course, commercial and financial deals would have to be stepped up, and I'm sorry to say, the fans would have to be monetised (after an historically long period of low ticket prices), along with hopefully a much better retail deal being done and Kitbag (is it still Kitbag?) being kicked into touch and a more forward-thinking retail dealer being brought on board.

In reality, until:

a) The ownership issue is resolved, and

b) We know where we stand in terms of the actual footballing side of the club,

There is not much fans can do except speculate...

Good wishes, Ray (and Tony Charles, and Brent et al)

My Irony detector went off, though I was expecting the sarcasm one to off too... 🤣🤣🤣😄

Thanks for the time you put into this analysis.

Then it must be a condition of the sale that MSP are paid their money, although why should they care by who unless Moshiri had put in the agreement that it is the responsibility of 777 Partners.

My reading of it is the MSP loan must be paid by mid-April. If 777 Partners or Moshiri can't do that, then Blythe, as agents for MSP, can take control of the club.

Moshiri may retain a smaller interest as part of the investment group organised by MSP.

I see MSP/Blythe walking off with the land lease, stadium and club for pennies in the pound. In addition, they would have the ability to raise stadium completion funds quite easily based on their organising profile and access to financial markets.

Simon's post (29) explains it much better than I do but I think we both see it the same way.

Whoever takes control need to appoint a senior management team used to running a (failing) multi-million-pound business.

No more cronies and honorary professors would be a great start.

MSP have 'stakes in McLaren Racing and European football clubs Augsburg (7th in Bunders League), GD Estoril Praia of Portugal (12th in Liga Portugal) and Spanish side AD Alcorcon' (cited The Athletic).

Okay, the football clubs are not at the level of EFC but it's a decent grounding and experience to build on and demonstrates some experience in appointing staff to run sports organisations.

The Mozart of money was supposedly one of them but, as I said yesterday, maybe Moshiri will be able to stay the number one shareholder by acquiring Kenwright's shares?

Given your potential information on alternative takeover parties which seems a much better option for securing the club to go forward in the manner we all crave, how do incoming parties overcome the disastrous mess that is going to be left with overspends?

Any reasonably financially stable organisation with at least a basic understanding of how football works is much better than what we are used to.

That's the only thing that reassures me, some deal will be worked out some how I'm reasonably sure.

We need to start winning points very soon though.

The club will pass over to MSP, if they don't receive the money back for their loan by the middle of April. 14th April, the day after the National? as we approach Beachers Brook and The Chair. I was just assuming that Kenwright's shares, and whatever percentage that might be, might just be enough to allow Moshiri, to give them the elbow, Bill?

We have already gone past the canal turn, when Mr Kenwright's picture was recovered from the Leeds-Liverpool water, and he immediately put the curse back up above the ticket office on Goodison Rd, where he still smugly looks down on everyone, hiding his deceitful eyes behind a pair of expensive shades.

I haven't got a clue how anyone can overcome this disastrous mess Ken, but it sounds like they have got enough money, to more than cover all these loans, and it sounds like there might be some people, who genuinely care about Everton Football Club, involved, as we approach the final ditch!

With regards the MSP/BC loan. All I know re the repayment condition is via the Guardian, The Esk and Paddy Boyland, who all say that the loan needs to be repaid (with no repayment party mentioned) by mid-April.

Iirc, I believe that MSP/BC loaned us the money between May and September in tranches (Presumably c£25m per tranche) after Andy Bell (and wife!) and Blythe Capital loaned us the £40m bridging loan in May.

So, why the repayment date is set for April, can only be because of when MSP created the 'MSP EFC Investors', which involves 13 partners (Incl. Farhad Moshiri @ £25m), in the April of '23..? I suspect the investors want their money back and/or take control of EFC.

Though currently, that doesn't look like a great option due to the size and type of debt. (though see post [29] for 'some' clarity)

I have had one nasty, very nasty thought after what Tony A has recently added to the thread.

What if Moshiri negotiates with RMF to expand his credit facility with them, and he gets RMF to pay the loan off?

Even though we know the two listed shareholders, we don't know who actually owns RMF, nor do we know where they get their monies from, other than their off-shore facility in the IOM.

As Tony A alluded too, maybe Philip Green is still involved, maybe the Kenwright estate has some skin in the company, maybe even Usmanov could be getting a return on his £400m outlay, maybe it could be Moshiri himself using external sources to refund his outlay? Anything off-shore is practically untraceable, unless they stupidly leave part of their finance chain in a 'non-private' jurisdiction? (Highly unlikely), or there is a whistle-blower.

Ray [33]

You said this above;

"I see MSP/Blythe walking off with the land lease, stadium and club for pennies in the pound. In addition, they would have the ability to raise stadium completion funds quite easily based on their organising profile and access to financial markets."

Me too, unless 777 miraculously come up with funds, Moshiri doesn't throw good money and bad, RMF don't intervene and Moshiri doesn't find A.N. creditor.

Again, as I said at [29], all we can really do is wait for the PSR IC decision and the EPL decision for now. Oh, and see what results occur on the pitch, for us, and the five teams around us.

Thanks for that mon ami, and as Bill @31 said, BK's shares only amount to just short of 1.7%.

I don't see the estate selling them while the club is so distressed, and knowing that if there is an MSP vs Moshiri power struggle, then they will hold the vital shares... (Initially anyway)

I appreciate the clarification though.

For you post @41.

Let's hope, that if they get a chance to buy or invest in the club, they can steady the ship and get us into dry dock at least!

https://www.ft.com/content/a225cb7d-ccdd-495d-b7f1-a8124129b8bf

The link and citation below indicates that a main source of funding for 777 has had their rating downgraded which will make investors nervous.

'A major funding source for 777 Partners is its Class E Bermuda life reinsurer, 777 Re which was recently downgraded to C- by AM Best. This life insurance and annuity reinsurer, has been taken under the administrative control of the Bermuda Monetary Authority (BMA)'.

https://www.insurancebusinessmag.com/uk/news/reinsurance/insurers-told-to-pull-1-8-billion-from-premier-league-team-everton-bidder-483387.aspx

777 house of cards is looking more wobbly by the hour

"So do Simon and Ray see a way out of the labyrinth?"

I know Ray has offered an option at [35] with MSP, which I would say would be a/the 'preferred' option, however I see this going one of several ways, please bear with me.

i) MSP/BC take the 'snatch-back' option and do a deal with Moshiri to take over the club, and we're back where we should have been back in May '23 except c£330m+ more in debt, and with a weaker playing staff.

ii) 777 somehow manage to raise sufficient funds AND prove financial capability to be approved to take over the club. A case of suck it and see, as they do have two capital funds raised in their Tifosy fund for monies to be available IF they get EPL approval, and Blue Owl Holdings to pay for the stadium, again if they get EPL approval.

I know most people would hate 777 getting the gig, but
a) it would remove Moshiri,
b) they have experience of running football clubs,
c) getting control of Everton means that they could raise some more substantial loans/funds, and
d) We'd avoid the possibility of immediate administration.

iii) Tony A's investment group step in after the 777 deal get's knocked back, or if not Tony's group (as it were) A.N. Other investment group/consortium take us over.

iv) or Administration;

iv.a) Administration with relegation: unless an investor swoops in immediately, we'd be at the mercy of the administrators and the EFL's PSR rules, which would mean (if we survived) we would probably go straight thru the Championship into L1. With massive wholesale changes at the club, and with a remote chance of possibly losing BMD in order to service debt. NB That I imagine would be a very small remote possibility.

iv.b) Administration without relegation: Would mean we'd probably get picked up by an investor for pennies in the pounds with Moshiri's lendings written off, and creditors taking severe haircuts.

ivc) Administration and no investor before the start of the 24/25 season: Points deductions (as is the case anyway) but owing to the fact we're a loss making organisation with very little real-term assets (about £340m Citizens of Suburbia - X user - worked out) every week without a new owner, might make Insolvency more and more of a risk.
Hopefully, it would never get to that stage.

As an aside, if we get relegated, financially the club will implode... As we just don't have cash reserves or assets that are easily liquefied in order to service our debts, not to mention a huge drop in TV monies, never mind the parachute payments, so the solution would be more debt (if there is no new investment) and that flies in the face of the more stringent EFL PSR rules.

If we get relegated, as Pvte. Frazer would say, "We're doomed!"

Cheers for that Ray, I've read one of those and I'll read the other soon.

Yes, 777 is in a mess and the longer the take over decision goes on, it works against them.

As I said above, if MSP/BC play it cleverly, they might even be the stone that breaks the 777 jug.

777 are seriously over-committed financially within their business network; and with both The American Insurance regulator and Kenneth King putting pressure on them, as you say, it looks like their house of cards will tumble soon. Else, they are going to have to do their own asset disposal to stay solvent.

Though to be fair, their footballing approach seems well thought out, they just don't seem to have the cash to keep all their plates spinning, and also only have so much football management bandwidth, which seems to be fully consumed at Genoa and Hertha.

I've really enjoyed reading your posts too Ray.

Good wishes mon brave! 🙂👍

The interesting name to me was Haydock Insurance, which was at one point giving c70% of it's profits to 777..!?

As you say, 777 is looking very wobbly indeed.

I'm not sure if this is great news, good news, or oh no! Just due to the parlous position we find ourselves in.

If 777 cannot get approval, that takes an option of the table for Moshiri.

As I said above, they may not be a good or even OK option, but... they would have served a purpose for now.

Thanks for posting those links up Ray. I can't read the FT link again, as I have to pay now...

The EPL would ignore it, and because 777 don't do audited accounts, they just point at their business portfolio and say we're worth $12.?Bn.

Even though the businesses might be worth that, it all relies on inter-company loans and credit reserves (NB Not cash reserves)

Basically, the EPL must know this, but as the Talking the Blues pod keeps saying, as does Michael K, the EPL can only approve before the final decision goes to the Independent Oversight Commission, but they, the EPL, can not say no..!?

However, I expect that rule to change at the EPL AGM once the final positions have been fudged post-appeals...

c) getting control of Everton means that they could raise some more substantial loans/funds,

This sounds suspiciously like they could go down the leveraged buyout route which nearly saw off our neighbours through their two cowboys chicanery.

If I've anything to do with your headache returning, may I whole-heartedly apologise.

The best thing to do, is ignore it, until the end of month and see where we are, if at all possible.

I just try and compartmentalise it all.

Between Dyche and his stubbornness, Moshiri and his madness, and the state of the take-over, I just have to let it all go.

I came off TW for quite a while because of all this. It is just all too much at times, with all Life's events going on as well.

Stay strong Tony, and remember John McVicar, and even if we don't win, let's be the best f**king second that anyone has seen!!

Treat this situation same as them across the park, ignore them, and know we'll overcome them again!

Good wishes Tony,

Si

PS Ray Said, this link you posted,

https://www.insurancebusinessmag.com/uk/news/reinsurance/insurers-told-to-pull-1-8-billion-from-premier-league-team-everton-bidder-483387.aspx

has a great home in Michael's piece here;

https://www.ToffeeWeb.com/season/23-24/news/44651.html

Good wishes,

Ray

No, it would mean they still have to abide by the 65% Max loan/credit value when buying a club.

However, with BMD nearly finished, and with Blue Owl Holdings guaranteeing the funds to finish the stadium, they could leverage equity via loans against the stadium, and the Monies raised by their Tifosy fund would provide additional equity for the club.

Nowhere near as bad as it sounds, but far, far from ideal... Unless 777 have a massive upturn in their businesses (Which I personally can't see)