Report: 777 Partners prepared to stem loans to Everton

Now it's being reported the stadium costs are rising exponentially. This man has well and truly fucked us over big time.

Fortunately I think that we are 5 years away from a correction in financial markets, which may allow time for 777 Partners to move on. They are not a long-term solution.

Moshiri's personal sources of finance have quit. His letter of guarantee was a requirement under Profitability and Sustainability Rules to qualify the 2021-22 Accounts. I think he has to renew that commitment if required for the 2022-23 financial year.

Pure hack garbage from journos desperate to file copy – they are the last to find out the facts and the first to make things up.

He has told me sports journos are viewed as the lowest of the low by other journos.

The team is on the up. If the finances stabilise we could become a very good side again.

Sounds like blackmail time, approve the deal or you are courting administration for the club. A game of high stakes brinkmanship with the authorities. How flexible will they be and will they turn a blind eye to the many possible financial and legal issues facing 777?

Would they really waive 777 submitting fully audited accounts as they have been unable to do so in previous recent takeovers?? Seems strange to even have to consider that, or how proper due diligence can actually take place without them.

Would other consortiums (at least two) as alluded to by Wyness and the Echo, step in at the last minute, forcing Moshiri to accept a lower price? Would these owners be any better than 777?

There are more questions than answers and everything is well and truly up in the air. We're still firmly between the devil and the deep blue sea.

One positive is the stability on the playing and management side, and the ability to overcome the penalty will have been noted by any prospective investor. Maybe some with deeper pockets……dream on!

It's reported that they lost $600M in the year up to June 2022 which they have hidden from the regulators. They have further losses on the way, apparently.

Vasco de Gama have just avoided relegation by the skin of their teeth. I don't think any of their clubs are performing well. They are subsidising EFC by £20M per month with money borrowed at high interest. They seem to be just what we don't want.

I don't see anyone else lined up to buy us. It's 777 Partners or administration I'm afraid.

Mindful that football has welcomed club ownership by organisations with close connections to countries hosting visits by war criminals, it will be hard to stomach rejection of 777 Partners — notwithstanding their apparent flaws.

My concern is that the purchase will be finalised and we'll be stripped for parts – including the new stadium... before eventually being sold for a tidy profit. That's just the vibe I get from these guys.

What are they going to do with an empty stadium?

Okay but enough of this fake ass feeding frenzy in the media. This is nothing but soft psyops. Let them know we don't fear whatever shit they want to make up and if you want to bother us, get in line.

Enough with the fear and doom loop stuff. We have desirable assets and the market is recovering from an unusually high interest rate environment.

Easy to prove right and proper after the Newcastle takeover and enough fiscal capacity to support us for the foreseeable.

Just as we get over the 10 points deduction you can't help thinking about a further 9 coming our way for going into administration.

The Premier League must be over the moon and probably feeding the media with these stories to try to scare off any potential investors.

Is there any chance you could post the article on this thread please? If so, 't would be much appreciated, thank you.

Good wishes, and keep up the great work Lyndon and team (MK).

What are these contingency plans the club claim to have. It doesn't seem obvious to me the club has much leverage here. It could easily run out of cash. So, to avoid administration, which would be a disaster for everyone, it's either Moshiri deciding he will continue to fund (surely unlikely) or there is another buyer ready and able to complete.

Who? MSP returning to the fray (presumably with R&M's blessing this time)? A new bidder? I've said all along our biggest threat is not the 10 point deduction or the financial compensation claims, but the sale failing and us running out of cash.

Paul #12, Keith Wyness says there are US buyers ready to swoop in and snap up a bargain if 777 Partners blow it. Whoever it is, they won't let administration happen and neither will MSP, which has a £100 million stadium loan at stake.

Clive #11, that's crapola without some context. Yeah, Vasco barely stayed up, but they were promoted to Serie A just last season, right after 777 Partners bought them. They'd spent two years in Serie B. That they stayed up is good news, not bad.

Plus Genoa was likewise promoted to Serie A in Italy right after being acquired by 777 Partners, and they look to stay up (14th right now). Jonjoe Kenny's Herta Berlin, which was relegated last spring a couple of weeks after 777 bought them, is in the top half of 2. Bundesliga.

So the only 777 property not impressing is Standard Liege, which is stuck mid-table and was bounced out of the Belgian Cup yesterday as former Everton youth Isaac Price was red-carded.

Being in the top half of Bundesliga 2 behind giants such as Holstein Kiel, Furth and SV Elversberg isn't exactly good for a team that have played in Europe in recent times. These are teams that have been playing non league football within the last few years that attract crowds of between hundreds to 8,000. Hertha averages 44,000 even in the second division. It's embarassing to see them languishing behind the German equivalents of Torquay and Rochdale.

Genoa FC, yes they got promoted under 777 partners but only after they fist got relegated under 777 partners. So they are simply back at square one and if their tax deal doesn't get approved by the courts it is being reported Genoa FC will go bankrupt this summer.

However, it seems to be completely at odds with the reality of the situation to me; UNLESS 777 plan to drive EFC into administration, and then pick the club up for pennies in the pound, and leave Moshiri holding the shares and company controlling the Stadium development..? A stadium that he is currently unwilling to fund it's completion, and bear in mind it was announced this week that the costs for completion will be increasing due to material and labour costs increasing! Go figure...

At that point 777 get a potential £400-500m EPL club (assuming that EFC beat the initial sanction levied on them, and a further nine points deducted for entering administration, and then avoid relegation) for probably around the £75-85m mark, working on something like 15-20p in the £)

Unfortunately, if we do go into administration, with several high value debts charged to Goodison Park and associated club property, we would be left to either rent Goodison back, or ground share with someone (NB No, not Mordor!!) Either that, or we don't have a ground to play at, do we?

As far as the information in the Public domain goes, the loans made by 777 to EFC for day-to-day running costs are unsecured, and are being used as a 'goodwill gesture'. So, if 777 do pull the plug, I would again assume that 777 have an arrangement with Moshiri, or they write it off as a tax loss?

I presume that the initial arrangement would have been that the value of the loans would go towards the off-setting the final purchase price?

If 777 do reverse their decision to fund EFC, then the only immediate solution I can see, is Moshiri to either self-fund or seek lending/credit to allow the club to continue. As a curve ball, maybe suspend the stadium construction until a buyer is found? As the real deadline for completion is the 26/27 season to be able to get approval for inclusion in the 2028 games. This would help free up the running construction costs for day to day costs (Robbing Peter to pay Paul? (Traill maybe? hehe))

Much like yourself Mark, I haven't a clue who would step in to buy the club.
My one thought is that MSP, and Bell and Downing may form a consortium and step in with a lowball offer, if 777 either fail to get approval or withdraw. Unless as you say Moshiri has other sticks of dynamite in the fire? I would say irons, but knowing Mr. Moshiri's past record...

The 'blue bottle' in the ointment though, is that the commission hearing outcome has not been resolved as it stands, and will not be resolved until the appeal commission sits, and makes its' decision.
At that point all the stakeholders will have clarity. I.e. the other 19 EPL clubs, Moshiri and the club themselves, any potential suitor(s), and of course 777 if they are still engaged in the takeover process at that point?

I think until that point, I'm going to try and put aside the feelings of dread regarding Everton's parlous financial state, and focus on the football.

I look forward to your thoughts Mark

In the absence of other funding, he'll have to stump up or lose everything

The only risk is he cannot afford to stump up ….

Why don't us fans buy the fucking club?

I understand the feeling of dread.

On the matter of administration and the game of chicken, I think we know too little of how the administrator would approach the matter, nor which of our various debts are legally secured on the stadium itself (possibly none).

Instead I'd like to consider (speculate about) our valuation as a club. First off, I don't believe we are a going concern in the sense that we generate positive cashflow. Moreover, I think this is likely the case even if you took out the ongoing stadium financing, which at least goes into a fixed asset.

Turning to the stadium, this is seen by many as our big selling point. It is undoubtedly a tangible asset with value. But £750m of asset value? Sorry to say but I think we are kidding ourselves.

If we forget about the silly quoted interest rates of 20%, or even 12% (which I think is R&MF's charge), and re-financed it as 10% or even 8% (which would be a stretch), even the latter gives you interest to cover of c £60m. That would need to come from additional revenue given we are struggling right now to even break even. That revenue would be from 1) additional ticket revenue and b) venue hire.

It appears our current ticket revenue is around £20m, or a bit less. Even if we doubled it- surely unlikely- that still leaves £40m to find from venue hire. Is there a £40m market for this in Liverpool and/or the NW. The O2 in London is apparently £200-500k per day to hire. It's much smaller but it is indoor and in London. What rate would we get? How many days would be need to rent it per year? Is there a market for that?

I realise I'm more bearish than some on here, but I think we are in a hole because we have chosen the very worst time to do this, with costs escalating massively because of well know supply chain problems, combined with the desperately bad timing of a (long overdue) correction in the price of money and risk. I wondered if Goodison re-development might help but it appears the net proceeds from this is likely low tens of millions.

My conclusion is that Moshiri probably needs to be virtually completely wiped out for this to work in this environment. He may not accept that but for sure his shares are in my view worthless. Maybe he gets some loans back.

Administration brings another 9 points, a probable January fire sale of players to keep bills paid and probable relegation. At which point, what is the value of the stadium without a Premier League club to anchor tenant it? It's quite some game of chicken.

The reason why administration keeps getting mentioned is that it is still highly possible for the club to go into administration.

Why would Moshiri keep funding the club, when he can't find a buyer? That is just throwing good money after bad. Even he wouldn't be that stupid. QED; 777 are funding the running, and thus maintaining the existence of the club currently.

His worst case doomsday scenario would be to assign his last (relatively) debt-free asset, BMD (It's only got £140m against it) to a new company he controls. He then stops construction, eliminating immediate costs, and he allows EFC to go into administration to recoup something like circa £70-80m.

He then hawks off BMD to somebody, clears his borrowings and reduces debt from his initial outlay (circa £250m + £140m). All he needs to do is sell BMD for £600m+ and he gets a little bit of capital back to help pay Uncle Ali back his £400m he lent Little Farhad.

If we did go into administration like that, Goodison Park and ALL EFC property goes to creditors with charges on them, and hey presto, we either have to rent it back, or ground share.

That is the situation as far as I am aware.

Regards the club, as a crap analogy;

Imagine you have a really nice Jag XJS, which has former glories and won motor races and what not, but is having engine problems and bodywork issues. However, the current owner can't afford to, or won't maintain it anymore.

But a potential buyer says, if it passes its MOT and still gets a racing license, then they'll buy it, but in order to get its MOT the potential buyer has to keep giving cash to the tight-arse owner just to keep it running.

The potential buyer, after being fleeced by the tight-arse owner for 7-8 months, finally tells said owner, that they're not interested anymore, and walks away.

Said owner then looks at the car, and decides rather than pay for its repair and upkeep, it's financially cheaper to scrap the car for parts and walk away with bits he can sell to other owners in the future.

That is the relationship 777 Partners currently has with Moshiri, and possibly it might be what Moshiri decides to do.

As stated elsewhere, let's hope for a future and hopefully, a brighter one.

If we go into admin. EFC become homeless...

I'll come back later.

ps: Michael has moved the Bloomberg post or our in Thread OP to an item in the "On the Web" section.

It might be easier to C&P our last few posts on there and keep it about that rather than trying to conflate this OP with 'Bloombergs' OP. If you see what I mean..? Confused, I am..?

Come on down, Jim, your future could be royal blue!

He would only allow that to happen to cut and run rather than commit what's left of his fortune. He must be struggling to entertain the dodgy 777 Partners.

I reminded myself of the current charges. Metro and R&MF are both against the club (which of course wholly owns the Stadium entities). MSP (via Blythe) do appear to be specifically against the stadium. Not sure whether this gives them preferential treatment in the event of a liquidation.

I can't actually see any charge at all from Moshiri, nor from 777 Partners, though that might be because it is recent and hasn't appeared yet. Or simply because they don't have one. Without sight of the sale agreement, it is impossible to know 777's protection for their funding of our cashflow.

In the event of administration, you say we would become homeless. That is theoretically possible if the stadium could be disposed of for a decent price. But that comes back to my point, how much is that stadium worth without an anchor Premier League tenant?

Unless Liverpool decide to occupy it, which is surely unlikely, it has in my view insufficient value unless tied to Everton. Certainly nothing close to £750m, or even £600m. I'm not sure if commercial and residential rights exist to boost its potential value, that might change that equation.

I'm not sure that Moshiri can assign the new stadium at Bramley-Moore Dock in the way you suggest, cutting out R&MF and especially MSP. The way I read the former's charge is that it is a floating charge over all assets owned by EFC, including the stadium subsidiaries. Others more expert than I may be able to comment on that.

My reading is that administration would be a disaster for Moshiri. Bear in mind creditor priority is different for football clubs. The football debts – players, transfer fees owed to other clubs etc – get paid first, even before HMRC. It appears he may even be behind our other main lenders, given they do actually have charges, and maybe even 777. I think he'd be wiped out.

I think his back is against the wall here and I've said before, if this all falls apart, he would do well to stay in the UK and increase his security. I don't think Alisher will get any money back.

I could well imagine that lot occupying the new stadium at Bramley-Moore Dock. They would immediately get planning permission to somehow raise capacity to 80k. The council would then put in a monorail system directly to Speke airport.

You watch...

Someone more informed on these matters can comment. In my simple head, this feels like 777 Partners playing hard ball to get the Premier League to play ball and push it through. Pun intended.

Meanwhile, with Everton and Chelsea to their credit having given up millions by voluntarily cutting their links with Russian owners and investors, we see that the de-facto owner of Newcastle meets with Putin.

They can dress it up all they want, but Newcastle are state-owned by a regime that has a dodgy human rights record at best.

It smacks of hypocrisy. We cut ties with Usmanov costing us millions. Chelsea lose their benefactor. The state sponsored owners of Newcastle meet the war criminal Putin and it's acceptable?

And for the sake of balance, the UK government isn't off the hook here. They sanctioned it, no doubt due to our Defence relationship with Saudi that is worth about £10 billion.

I too can't believe that nobody else would be interested. Our fans sell out every game and it's no secret that our financial problems are largely a result of woeful management for the last few decades.

Decent owners could correct the latter, but I doubt that it is 777 Partners. Television income rises every year to record amounts.

Putin also met with UAE before the Saudis, on the same trip, which brings Man City's owners into the frame.

Also, I can assure you that UKPplc's defense contracts with KSA are worth multiples of your figure.

Firstly, Mark, many thanks for looking at the six (not three as I previously stated) outstanding charges. I looked again last night, after I'd put my daughter to bed.

Can I also thank you for reminding me how the charges are structured. It is as I originally thought, although, I had forgotten the R&MF charge that has a floating charge on all assets of EFC and any subsidiaries. Which as you point out would include the Stadium Development subsidiary. So not just a mere £140m of associated charged debt, but nearer £340m when Blythe, MSP and R&MF attached debt is totalled.

I never thought Moshiri had any charges associated with the club due to the background work that Paul the Esk has already done. As for 777 Partners, as you say, no-one is privy as to how that arrangement is structured other than the two parties involved.

My earlier thought, was merely an assumption on my part, that to me made the most logical sense. However, the words logic and Moshiri don't always happily cohabit the same sentence or thought processes.

Regards us becoming homeless in the event of administration, I should have been clearer. As we have both 'discovered' as it were, EFC are effectively mortgaged to the hilt and, in the event of administration, Goodison Park itself would be used as collateral for repayment of debt. Never mind the associated debt with the new stadium. Hence, Goodison Park, its offices and indeed access to Finch Farm (as it is specifically included in one charge) would effectively be out of EFCs control.

I agree with your down-valuation of the new stadium project. I never thought that it would be worth £760m+ now (due to increasing construction costs) However, I plucked the figure of £600m partly to do with the existing completed infrastructure, and partly for the potential commercial, planning, and residential rights that you alluded to in your post. From what I have read, a value of between £550m and £600m seems to be a fair third-party assessment. At this point anyway. Maybe with the increase in construction costs, it may even bump the value up somewhat?

With regards Moshiri reassigning BMD, I would suggest it could be possible, if Moshiri paid up the Blythe/MSP £140m debt, or took it on himself rather. Followed by a renegotiation with R&MF for their debt, including maybe a partial repayment of say (again plucking figures out of the air) £60m towards their debt.

At that point, Moshiri would have an asset judiciously valued at say £550m for the cost of £450m – but with a capital requirement for £760m (and rising) less £390m so a difference of £370m to go before completion (and rising)…

To achieve what though? An empty stadium probably, when completed and with all the associated add-ons only worth about cost price of £750-800m. A pretty pointless exercise to my mind after reviewing it.

Maybe the new stadium has been the financial White Elephant after all, or the straw that broke the camel's back, or...?

The question there, is surely it would have been more prudent to assure Everton achieved greater football success (ie, reaching European football consistently) before starting the new stadium project? I mean the land and opportunity wasn't going anywhere soon? Mind you, as the saying goes, hindsight is always 20/20.

My reading is that administration would be a disaster for Moshiri. Bear in mind creditor priority is different for football clubs. The football debts – players, transfer fees owed to other clubs etc – get paid first, even before HMRC. It appears he may even be behind our other main lenders, given they do actually have charges, and maybe even 777. I think he'd be wiped out.

After reading yours and other posts, Mark, and having time to have slept on it, I have to agree: administration should be anathema to Moshiri. Which in turn, should give us all hope that EFC will survive its current woes and travails. Unless of course we get relegated, which currently doesn't look probable. Let's hope the team keep performing consistently.

I think his back is against the wall here and I've said before, if this all falls apart, he would do well to stay in the UK and increase his security. I don't think Alisher will get any money back.

Yes, I have to again agree. Little Farhad certainly appears to have limited options currently. Though, I read on another thread that Paul the Esk seems to appear confident that 777 will not become our new owners – but EFC will have a new ownership deal in the New Year. Let's hope the next lot are much more transparent and credible. nb: I'm not asking for them to be squeaky clean, but at least semi-palatable please.

Regarding Little Farhad and Uncle Ali; I would suggest to Moshiri to just enjoy Life to the full while he has the means to do so. On that note, I intend to keep an eye on the futures of Barrett-Baxendale and Mr Ingles, as I would tentatively think that, if they know where the bodies are buried, they wouldn't want to join them. Just my morbid and cynical nature coming to the surface there.

Anyway, we have a football game tomorrow, don't we?

Let's go, Blues! Another 3 points would be a very welcome tonic currently.

Yes, you're right: Goodison Park would remain part of the assets under an administration. But an administration isn't a liquidation (though it may lead to one).

The goal of an administrator is to keep the club viable, fulfilling fixtures, for which you need a ground, with a view in the first instance to a third-party sale (and maybe this is the scenario Paul the Esk is envisaging).

It is hard to discern what an administrator would do in our situation. I could foresee slashing costs, especially on the admin side, and probably player sales. Right now, you'd have to imagine stadium work would stop.

Quite apart from it being not worth his while to carve out the stadium for himself, UK law would take a dim view of anyone doing such a thing for a company that is not a going concern.

Moshiri may not be a director but he would struggle to find any to do that undertaking for him. Very risky for the individual. In fact I would think Colin Chong in particular must be getting very jumpy, this could blight his career.

It's easy to say in hindsight but I fear the new stadium at Bramley-Moore Dock has indeed been the straw that has broken the camel's back. Just very unfortunate timing from both sides. It's still theoretically possible for the club to be a success but it will need someone with deep pockets and patience to make it work, even if Moshiri does take a very big bath.

If you are correct about development being a real financial upside, over and above the stadium, for the club, that would certainly make a very big difference but I've not seen any clear evidence of the scale of that upside.

In the meantime, hopefully Dyche continues to maximise what he has. My strong impression is that book he talks about writing will be quite a read. I sense he is trying to keep calm amidst chaos...

I am so so sad. This Moshiri selling to 777 Partners only deal – it reminds me very much of how the previous owner behaved when selling. Lies, damn lies… and Kenwight.

There has to be other interested parties. 777 Partners would be the furthest from anyone's thoughts when looking at selling a Premier League club, unless you were as bent as £777 note.

We are owned by a gangster. His frontman and previous to that, a crook. I am sure there are 'open secrets' circulating about the true and shocking state of our accounts and liabilities. Unknown to us. Which any half-decent wealth-laden nation would baulk at.

I am convinced that buying Everton does not mean ridding it of Russian interest. I am concerned Kenwright caveats would be transferrable and USM would remain a part of the regime, in a hidden capacity. Therefore… step forward, 777Partners.

And the gobshites at the Premier League have no moral right to prevent this happening. As stated above, Putin is partying with Newcastle's owners. Where is the statement from the Premier League condemning and sanctioning Newcastle Utd???

It isn't corruption. It's worse… far worse.

I know someone who has been involved in brokering this type of deal and was actually involved in that Newcastle deal, and when I mentioned this to them, he said that although anything is possible, he would still be very surprised if this was the case in this deal, because with 777 being an American company, they will surely be aware that the FBI, would be all over anything connected to the Oligarchs.

I know it's allegedly Moshiri's club, and it appears at least one member of the 777 group is/was not scared of taking risks, (nothing wrong with this, imo) but this isn't just a few ounces of Charlie, and I'm not sure many people would want the FBI, looking into them. We will see.

I am more worried over the ramifications if 777 get control than I am over the 10 point reduction.

If 666 is the sign of The Devil, what does that make 777?!

The one shaft of light, is that Keith Wyness, who must know a bit about this sort of thing, was confident the other day, that there were alternative investors waiting in the wings.

Genuine big hitters with a more long term game plan will be far less cavalier. Their idea will be wait for the fire sale and pick the club up for £5 quid but we'll only find out when paramedics turn up and wheel Moshiri out on a stretcher accompanied by tanks of oxygen

And a quick Google search will show the Daily Tory claiming there is "no chance" 777 will be approved so the deal is over.

This is becoming like the transfer window sagas where nobody really has a clue what's happening.

Prospective Everton owners 777 Partners have committed to fund working capital through to at least the end of January as they await a final decision on whether they have been given the green light for a takeover.

777 Partners stance on Everton administration report, takeover and Premier League response

We won't be able to add to the squad in January, I just can't see how we will have the funds.

So far, he has claimed.

1) 5 clubs will sue us and the compensation will put us into administration, leading to a 9 point deduction and probable relegation.

2) Our own players will sue us if we are relegated.

3) We will receive an additional 10 point penalty in March for the latest set of accounts, leading to probable relegation.

4) The stadium cost will over-run by an additional £150 million.

5) The Premier League will not approve the deal by the end of December, and 777 will refuse to continue funding.

6) Everton will then become insolvent and go to administration. This will lead us to a 9 point deduction and, yes you guessed it, probable relegation.

He's had us in administration twice, sued twice, deducted 38 points, (10 + 9 + 10 + 9), relegated 3 times and over-spending on the stadium because the price of steel has gone up. He is a complete joke.

If you do want to read it, just do it for the comedy value.

Instead of prohibiting very wealthy people spending their own money, what any club owner shouldn't be able to do is load the club up with debt that owner can then simply walk away from.

Every time a club comes onto the market, it should be guaranteed as debt-free.

Pontypridd United: Cymru Premier club face potential 141-point deduction after FAW probe

David Phillips KC, who was the Chairman of the Independent Commission that gave EFC a 10-point deduction is referred to dealing with a Football Association of Wales Commission involving Pontypridd United.

18 charges for failing to pay players and meet contractual obligations. Admission of guilt. Penalty: 6-point immediate deduction. Separately the Club were told if they field any ineligible players this season, they will get a 135-point penalty.

We faced one charge and received a penalty of 4 points more. Wonder if the Football Association of Wales intervened to try and fix the penalty?

Clearly Mr Phillips took a view our one charge to which we pleaded guilty was more serious than the 18 charges Pontypridd United faced!

Obviously the FAW did not tell Phillips and his "independent" team what result to come up with prior too or during the independent inquiry.

Fortunately for Pontypridd, the FAW don't have anyone as corrupt running them as the Premier League.

The 2022 financial reports showed our total expenses as £202M. Well, 12 x £20M is £240M. So how in the hell can we have a shortfall of £20M per month if our total expenses last year were £200M and we have since cut costs?

And that's a shortfall so, assuming our income was similar to last year (£180M), it would mean our expenses have risen to £420M this year from £200M last year. I realize interest payments are an issue but how does that make any sense?

I read somewhere that we are roughly breaking even on the day-to-day running costs. The £20M per month shortfall is money that's needed to keep the construction of the stadium rolling along until completion.

Cheers, that makes better sense.

And we certainly wouldn't use the money provided to us by 777 Partners for anything other than what it was specifically provided for?

Perish the thought!