16/02/2024 25comments  |  Jump to last

The investigative journalists at Josimar report on a document from August of last year that may shed some light on where 777 Partners, the investment firm awaiting the green light for their purchase of Everton, are getting their funding.

The document in question is an "Investment Overview" prepared by A-CAP, a risk solution and service provider based in New York that operates a network of insurance companies.

A-CAP is run by chairman and CEO Kenneth King, who has some direct ties with 777 Partners and whose firm is said by Josimar to be "propping up" the Florida-based firm. The 44-page document is said to outline the specific details of the deal to buy Everton, including confirmation that the ultimate source of the first £40m loan made by 777 to the club was A-CAP, with the Everton paying an interest rate of 12.75%. 

The document explains that A-CAP’s support of the Everton acquisition will materially increase the overall value of the 777 Football Group’s multi-club portfolio, and allow it to raise capital and sell equity, creating liquidity and highlighting the extent to which 777 Partners need the Blues more than that club needs them.

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According to this latest Josimar piece, "A-CAP estimate that owning Everton would justify a higher overall enterprise value for all 777’s clubs, generating at least 3.2 times more revenue for the group. This, it is hoped, would attract new investors and 'increase the execution certainty' of an attempt to raise capital on their behalf by broker Tifosy, which has so far proved unsuccessful."   

Josimar are convinced that 777 Partners need to complete the Everton takeover so they can leverage the huge value that it is building up in the construction of the new Everton Stadium at Bramley-Moore Dock – a valuable asset against which more loans could secured.

The club would also benefit in that substantial amounts of current debt could be converted to equity in the club. But all this hinges on the Premier League giving approval to the takeover of Everton by 777 Partners. 

» Read the full article at Josimar

Reader Comments (25)

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Ian Wilkins
1 Posted 16/02/2024 at 13:45:53
Do we really want these people as our new owners?
Stephen Davies
2 Posted 16/02/2024 at 14:21:17
The main claim is that the money we've borrowed from 777 Partners has actually come from a dodgy network of insurance companies called A-CAP. The claim is that 777 Partners need Everton as much as we need them.

777's loans to the club, made to cover working capital and ongoing stadium costs, have since ballooned to almost £200M, loading more debt onto an already debt-ridden club. Josimar has been told that it is A-CAP which is continuing to provide this money.

The document explains that A-CAP's “support” of the Everton acquisition will “materially increase” the overall value of the 777 Football Group's multi-club portfolio, and allow it to “raise capital […] and sell equity, creating liquidity.” It estimates that owning Everton would justify a higher overall enterprise value for all 777's clubs, generating at least 3.2 times more revenue for the group. This, it is hoped, would attract new investors and “increase the execution certainty” of an attempt to raise capital on their behalf by broker Tifosy, which has so far proved unsuccessful.The document says they expected “the floor” for a “debt raise including Everton” to be €300M.

It is unlikely that this money would be used for new signings as billed, as the document also states that the 777 Football Group “is expected to have €240-300M of working capital needed to reach stabilization across all clubs.” This is the paradox at the heart of the matter: Everton are in such need of working capital that they require regular loans from an entity which is in dire need of working capital itself.

It sounds like a total Hail Mary, where 777 gamble on exorbitant loan commitments to fund the "final piece in the jigsaw" – their hope is that a Premier League team will boost the overall value of their multi club model, and lead them to unlock future investment. That is speculative, and clearly not worth the risk for us.

Either way, it seems abundantly clear now what the aims of 777 Partners are, what the potential benefit is, and the downside risks. We're now able to rule out that Usmanov & Moshiri are lurking in the shadows just trying to find another vehicle to launder their money and front the completion of their long term strategy.

What I don't understand, however, is this part:

Everton already has other lenders to repay. US investment group MSP, who were initially Moshiri's preferred choice to buy the club, have £137M invested into the Everton Stadium Development Company.

My recollection was that the deal with MSP broke down because Rights and Media Funding vetoed it, and they were Kenwright's means to keep hold of the trainset. With Kenwright no longer with us, why is Moshiri so desperate that he's treating 777 as the only game in town?

Fingers crossed that:

- MSP or equivalent are ready to pounce
- Moshiri recalibrates his expected haircut
- The Premier League quickly gets behind a competent alternative

Tony Abrahams
3 Posted 16/02/2024 at 14:42:50
So it looks like 777 Partners are more interested in acquiring Everton for their own portfolio, rather than buying Everton to make us a competitive football club?

Of course there are other people waiting in the wings, and they might even be very professional people if they have managed to stay out of the news surrounding the circus that is Everton FC.

Dave Lynch
4 Posted 16/02/2024 at 14:59:10
Who are these other people, Tony?

Unless you have names and concrete proof, you are guessing.

Tony Abrahams
5 Posted 16/02/2024 at 15:56:53
I'm not guessing, Dave, and have been led to believe they have been waiting in the wings for a very long time mate.

We will soon find out. I have actually just heard some good news about this today, but I have no proof and, even if I did, I am not the type of person who would be trying to show I have any either!

I've always said there is a little twist if my information is correct, and although nobody can predict what any new owners will bring, I think it's not very hard to predict that the only people who would want 777 Partners are the most desperate amongst us.

Desperate people do desperate things, and because of the way Everton Football Club has been run since – the self-proclaimed, through his nepotistic friends in the media, who proclaimed him to be the greatest Evertonian alive (what an insult that is to at least a couple of thousand Toffees). The only thing that makes me desperate is that we don't fall into this same trap again.

What a trap it was, the man who only had the club's best interests at heart, was prepared to send us to Donkey Fucken Derby. 🤮

Jay Harris
6 Posted 16/02/2024 at 16:04:08
Tony, you have been consistent in this belief.

I for one hope that you are right but I still wonder why Rights & Media Funding blocked MSP but are apparently willing to support 777 Partners.

Something is not right but you could say that repeatedly for Everton since the smoke and mirrors man was able to take control of the club without putting a penny of his own money up.

Dave Lynch
7 Posted 16/02/2024 at 16:26:29
Here's hoping, Tony...🙏
Dave Abrahams
8 Posted 16/02/2024 at 16:54:49
Tony (5), The only thing I find wrong about your post is that you think only 2000 Everton fans were ahead of the late chairman to be classed as the greatest Evertonian.

I think I've met at least that many Everton fans and not one of them would allow another fan to call him the greatest Evertonian, they just loved Everton, end of story, but the late chairman — well we all heard him!!

Danny O’Neill
9 Posted 16/02/2024 at 17:33:04
I don't have any insight, I just know that something needs to happen with the takeover and ownership.

We all know and agree on how badly we have been mismanaged over decades to get to the situation we are in.

But with the stadium on the horizon, there is hope for the future.

Whoever comes in, and someone will, let them take us forward. It feels like a consortium at the moment.

Si Cooper
10 Posted 16/02/2024 at 04:26:35
I just see 777 Partners as fairly typical avaricious capitalists who regard football as a potential cash cow. In a piece in Private Eye recently, they didn't really stand out as being particularly off the spectrum, with Josh Wander just viewing the paying public as a lucrative source of revenue; people to sell insurance / financial packages to (as well as the ‘small potatoes' of hot dogs and beer).

I presume, to get that ‘payoff', you need grateful fans so the imperative must be to get their portfolio of teams to be successful. Whether their master plan is feasible or fanciful is another matter.

The real question for me is can the Premier League's ‘fit and proper ownership' and ‘profitability and sustainability' rules protect a club from being used and abused or not? If not, then the Premier League bosses are what is not ‘fit and proper'.

Eric Myles
11 Posted 17/02/2024 at 05:36:04
Jay #6,

"I still wonder why Rights & Media Funding blocked MSP but are apparently willing to support 777 Partners."

Just guessing but could it have been that MSP could have held preferential repayment status of their loans whereas 777 are below both RMF and MSP in the payoff queue.

Derek Thomas
12 Posted 17/02/2024 at 06:58:00
I may be cynical or wrong... or both, but in certain circles of the 'borrow from Peter to pay Paul, round and round and where it stops nobody knows accountancy jiggery pokery world', debt can, under certain circumstances, be seen as an asset. And you can borrow on assets.

Vasco de Gama, Genoa... Everton, we're another bigger layer in their pyramid.

The only person this benefits will be Moshiri.

Paul Birmingham
14 Posted 17/02/2024 at 16:11:52
Let's pray to God that there's deliverance for Everton this month in terms of the points appeal and this works in Everton's favour.

In terms of new owners, I've not backed 777 Partners from the start but, if they fail their acceptance test, then Moshiri, must have to find a new buyer or partner for Everton?

The road has been tough for decades now, and hopefully a new chapter will start soon in the life of Everton FC, with escape from purgatory.


Clive Rogers
15 Posted 17/02/2024 at 16:37:31
I dread this lot taking over. If you look at the 7 other clubs they own, none of them seem to have benefited or progressed.

There don't seem to have been any significant cash injections or structural improvements. They seem to have just left them to it.

If buying Everton is simply to raise their profile and to attract capital investment, that is a very risky scenario that will surely end in tears all round.

Alan J Thompson
16 Posted 18/02/2024 at 04:43:27
How much debt are Everton actually in, is it all at 12.75% or more interest, and where does that mean we have to finish in the League just to meet the interest repayments?
Clive Rogers
17 Posted 18/02/2024 at 10:18:03
Alan, 16, from what I’ve read on TW, about £750M, with more to come for the ground which will take us over £1 billion of debt. No league position will be enough to cover the interest payments on that as we are running at a loss already. The league position payments don’t cover our running costs. The figures are mind boggling.
Clive Rogers
18 Posted 18/02/2024 at 10:38:41
Kenwright and Moshiri have put the club in an appalling situation that may take 20 years or more to recover from.
Andy Crooks
19 Posted 18/02/2024 at 11:07:02
Alan @16,

Even at 12.75% it's a staggering amount of interest. We'd need to be playing Champions League football every season.

We really need and deserve a break.

Eric Myles
20 Posted 18/02/2024 at 12:20:56
Clive #15,

"There don't seem to have been any significant cash injections or structural improvements. They seem to have just left them to it."

And I think that's been 777's aim all along, and what we need for our club, to be self-sufficient and look after ourselves.

Look at what happened last time we had a billionaire throwing money at us.

Mark Taylor
21 Posted 18/02/2024 at 13:20:28
These last 5 comments sum up my own position. I appreciate everyone crowed about getting a new stadium but it is an albatross around our neck. The main part of the problem was not setting up long-term financing for a project whose cost dwarves the revenue of the club. And from that, developing a business plan that demonstrated its viability.

The second part is that we simply could not have chosen a worse time to embark on such a project, with our main backer sidelined by a war, supply-chain issues, and the pandemic escalating costs disastrously, and a sharp change in the previous 'easy money' interest environment.

God only know what a business plan would look like now. Apparently Deloitte reckon it will increase our match-day revenue from £20M to £55M. Given the fairly modest capacity increase, where does that come from?

Has anyone even done an analysis to see whether the Evertonian public could possibly sustain the huge increase in the cost of seeing a game that is implied in that number? Is not the revenue increase also going to be accompanied by increased costs, so the net revenue is lower than this? Is there really a massive market in Liverpool and the North West for huge events to add revenue, that is not already served by other venues?

You want to see how some other big stadiums were funded? Tottenham did theirs on finance as low as 2%. Arsenal made a killing on the Highbury real estate (but also had years of austerity, selling their best players). West Ham and Man City basically screwed a fantastic deal out of the taxpayer. The Etihad is an arrangement we would kill for.

And us? Well, ask yourself, what would Everton do...?

Clive Rogers
22 Posted 18/02/2024 at 13:31:18
Eric, 20, true, but that depends on who is running the club.

It wasn't the money that was the problem – it was the way it was wasted by the idiots in charge. Moshiri's big mistake was leaving Kenwright and Co in charge and not sorting out the financial and business issues.

There is still a lot needs sorting. The ground is full every game, but we are losing £20M a month. The new ground will help somewhat but is not the answer to every problem. We are still signing poor players imo.

Dave Abrahams
23 Posted 18/02/2024 at 13:39:33
“Well ask yourself, what would Everton do?“ died with the man who claimed it was asked of him along with the multiple lies he told while he was here.

Look on the bright side: 777 Partners will be rejected by the Premier League and there are other players in the game to buy Everton and they will take over when 777 Partners are pushed away.

I don't know how the financial side of the business will be sorted but the new stadium at Bramley-Moore Dock is just part of the whole scene right along Regent Road there. Business people know Everton FC will be part of the success down there once this mess created by the Premier League is sorted out. That starts with getting at least 6 points back this week and the second charge being wiped out because it was the same charge as the first one which our barrister has sorted out.

That's what I'm believing until it turns out different, always look on the bright side!!

Stuart Sharp
24 Posted 18/02/2024 at 14:16:47
I'll have whatever Dave A is on, please.
John Keating
25 Posted 18/02/2024 at 14:19:20
Spot on in fact I’d go for a full 10 points and a suspended sentence
The Worlds Greatest Evertonian…….say no more
Raymond Fox
26 Posted 18/02/2024 at 14:20:45
Theres me thinking you were a pesimist Dave A.

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