777 Partners look to extend timeline for Everton takeover

“No, no, it''s uh,...it's resting.”

“Look, my lad, I know a dead deal when I see one, and I'm looking at one right now.”

Why are the Premier League forcing 777 Partners to pay Everton's owner's debt?

Approve them as owners and then they are responsible for the debt, don't put the cart before the horse.

"The investor is waiting to see if we are relegated before it finally fails to achieve the takeover that has been dead in the water for several months."

The lengths Wander and his mates will go to in order to get a seat in the Directors Box and a pie and a pint at half time. I gather that Marine are now on their radar – especially as the pies are so tasty and the beer cheap.

12 April 2023

The US Department of the Treasury Office of Foreign Assets Control ( OFAC ) is further curbing Russia's access to the international financial system through facilitators and their businesses. The United States, in coordination with the United Kingdom, is targeting the facilitation network of Alisher Usmanov.

What happens if they take over Everton, and then we find out that they are still struggling to find money, like they are struggling now?

If Paul the Esk is correct, the ball has now firmly moved into MSP's court, so let's see what happens next because this has already dragged on for a lot longer than should be allowed, imo.

Yep... absolutely correct – and I don't think they have the Money

I think technically you're right, it is not 777 Partners debt. But the Premier League made settlement of the debt one of its four conditions when they were minded to put forward conditional approval of the takeover.

I haven't followed Paul Quinn's articles on this theme too closely but I sensed he considered this a deliberate hurdle that 777 Partners cannot get over and it will therefore end their quest for ownership of the club.

However, I'm less impatient to have inside knowledge of things ahead of time – especially when it turns out to be wrong, and can wait and see, as ever, what actually transpires.

I can't see MSP activating their clause either, or any movement from any bidder until our Premier League status is determined. Why would they, unless Moshiri dramatically drops his asking price?

I'm just praying that what Paul the Esk wrote about MSP needing to be repaid by 15 April is true and I'm hoping that the group I've been talking about are talking to MSP because, if 777 Partners are already asking for an extension to pay one loan, then I expect they will move aside quite willingly for a small profit?

I have heard that relegation wouldn't put off these other Americans, and they have already got a deal in place that would reduce the cost of the sale if this happens.

Waiting is killing me but not because I want to be proved right, more because I am worried sick in case a group that are still waiting for more time after eight months of trying to prove that they have got the funds eventually succeed in purchasing Everton.

Looks like MSP are waiting till Monday when the loan needs paying. And probably looking to take over the club.

We wait with bated breath to see if MSP exercise their option of converting the £158m loan into 50.1% shares…

I've supported them for nigh on 60 years and I have never known as much doom and gloom to surround us. What an absolute mess.

Kenwright's legacy, this. I could cry, I honestly could.

That, as you state, is exactly the situation according to Paul the Esk. Moshiri loses majority control.

The agreement is with Moshiri, not 777 Partners. The loan agreement could be collateralised by shares to the value of the loan, depending on the agreement.

All fingers and toes crossed this bunch of charlatans gets their just deserts. It's all madness!!!

If they don't get to take over, then what?

Tony A @ 18 they are in the driving seat but they are using red diesel ha ha class 😆

Kenwright turned down a fantastic free stadium deal just because it didn't suit him for some unknown reason.

He threw away the future of this club.

Hence Kenwright, without a pot to piss in, had to let the deal drop. I'm happy to be corrected if that's not the case.

He loved being the Boss on matchdays and would not give that up. Like Sunday worship for him but he was playing God.

That would represent a pretty good deal for them potentially and consequently would see Moshiri losing out a fair bit, right?

Really hope this is sorted one way or another soon as the lack of clarity is painful for the fans and surely detrimental to the club's prospects.

Paul Gregg laments failure of 'flagship' Kings Dock stadium.

What just occurred to be me is that by naming the payment of the MSP Capital loan on the 15th April as part of their stringent conditions for takeover approval., the Premier League are verifying the right of MSP Capital to satisfy the loan.They would be aware of the terms of the loan agreement and have therefore approved them.777 Partners have to provide the monies to Moshiri to satisfy this loan , which would convert to equity on the takeover completion. Moshiri without their payment ,would have to paid the loan to satisfy the terms of the loan himself.

It is very much up to MSP Capital and the Premier League.

That effectively puts Usmanov and his money out of the picture.It is a great relief that is now the case, because up to now it wasn't.The timing could not be more perfect.

Apologies if I am miles behind the curve, but is this not an ok outcome?

Presumably such a deal could only be with either MSP or Moshiri. Either way, it looks like MSP and the unknown American group you refer to have played a blinder.

The MSP Capital loan is an agreement with Moshiri. They were before 777 Partners involvement.

777 Partners would join the queue of creditors and they would be toward the back, behind the likes of Rights & Media Funding and Metro Bank.

It doesn't sound like MSP Sports Capital are overly keen on the clause that would hand them 51% of the club being triggered as soon as Monday. They would still prefer the 777 takeover go through and they get repaid.

For whoever does get control, one of their first orders of business will be to restructure the outstanding debt to allow us enough room to operate without incurring yet more.

At this point, it would probably be in the interests of any would-be buyer (aside from 777 Partners who have a deal in place with Moshiri with contingencies if we're relegated) to see this drag on for a bit longer, at least until it's clear whether we're staying up or not.

Thanks for that.

Thats one theory shut down.

They agree to anything as they want to buy with nothing but borrowed money and promises. No serious seller would take them seriously!

Do you reckon Levy would sell Spurs to such an outfit? They would not even get a meeting with him after a 10-second Google search.

Make no mistake, Everton are on the brink financially – we owe hundreds of millions and have huge liabilities which the Sky money, our only real income, just does not cover.

We need a real custodian – with a billion quid of cash (they control) in their back pocket who can clear the debts, finish the stadium, hire top execs to run the club, and then provide a 5-year squad investment budget which comes with the caveat of the return to some form of European football within 3 seasons.

I am not sure they exist though – one trophy since 1987 does not set the pulses racing.

The bullshit “People's Club” moniker was just a ruse to hide commercial and financial malfeasance, small mindedness and neglect. We have been surpassed by clubs like Brighton and Brentford in terms of how football clubs should be run in 2024.

What we actually have is asset stripping vultures looking to pick the bones of our (once great) carcass and strip whatever cash they can in the short term. End this farce.

I expect us to stay up by the skin of our teeth again but the fundamental rot at the heart of the club will finish us off if radical change is not forthcoming before next season.

The love for Everton is DNA deep – you just cannot explain it to people; however, my anger is boiling over as to what has been done, and continues to be done, to all of us who are Blue.

Spot on.

That was a very interesting read.

What struck me is this is another illustration of the extent to which this club is non-viable as it currently stands. The stadium and its costs are a neck-breaking millstone. There has to be more than just Moshiri taking a bath to make it work.

And given he loses literally everything by ceding control, I don't see why he would lose from administration which might at least give him a little bit (to give back to the Uzbeki).

Quite why MSP, R&MF and 777 Partners got themselves into this debacle escapes me. The investments of all are at very serious risk, as they wave metaphorical guns at each others' heads. I still think there is a genuine risk we won't see out the season.

As Moshiri owns through Blue Heaven Holdings 94.1% of the shares, is he selling all of his shares or just enough for 777 Partners to become majority shareholders of 51%?

I suppose the bright side is that they might see some way out of this mess by improving the playing side or is the other way just to be in for the far-reaching long run that makes Kenwright's run look like a long wea, sorry, weekend.

How much would the new stadium be worth complete?

777 Partners want us, but can't afford us. MSP ain't interested in buying the club, they just want the new stadium.

And as for Moshiri, well he doesn't want anything to do with us now. I really do fear if there will still be a club going to go into the new stadium when it's finished.

My, what a mess the owners and the board have left us – another Post Office scandal!

I scratched the surface. The Glazers used loans to purchase Man Utd and put the debt on the club. Even our cousins' owners did likewise. I believe Abramovic, despite his obvious investment, put Chelsea in debt initially, before they broke clean.

I'm sure those more studied can come up with more detail, but it seems common practice in modern football. Owners don't tend to bankroll. They invest and seems they do it through business partnerships and loans. A mortgage.

A bit like all of us buying a house and paying a mortgage, which is a loan that we have to pay back.

This is just embarrassing.

I think you'll find the World's Greatest Evertonian did a "Glazer" before the Glazers!

777 Partners, who own the club, have stated that they will be 'adopting a new strategy' for the club. Which reads to me like they can't afford to travel to Europe.

Confirmed in this article:

Link

Despite my disdain for the Premier League, even they can't bring themselves to authorise the complete obliteration of Everton Football Club.

The Twitter thread that Stephen (46) posted is a helpful read, and shows a narrow path forward, but if we were to be relegated — which we won't be — we'd have a helluva time staying afloat.

It's already a sign of the depth of the rot that MSP may very well wouldn't want a controlling stake in one of the biggest clubs in the most lucrative sports league in history for £158 million, because we're mired in such debt and such a poor business operation/proposition.

It seems things really do rest now with either a new bidder, or a partner with MSP to help fund operating costs and completion of the stadium and debt servicing. Even if we survive the season and 777 Partners find more money in the cushions of their shady, grimy, cocaine-dusted couch, it's hard to see how things end well with them.

We have every reason to be livid towards the Premier League, but requiring this deal with 777 Partners to have such strict conditions may be our saving grace — assuming there is one.

That's the situation in a nutshell. Looks like it will be a negotiation between creditors, resulting in an outcome.

Everton are overtrading as it is needing increased borrowing to keep trading. A classic early sign of overtrading is the' Big Project'. A 'Big Project' is undertaken with the aim ultimately to provide cashflow to trade out of financial difficulty.

This whole thing is a shit show. I said on another thread that those two biggest Evertonians from MSP can fuck right off if all they are after is to buy the stadium and rent it to us.

Buy the lot or nothing at all and let us have some stability.

777 Partners are not what we need to run our great club. How the fuck can that lot get a top buyer but we get fucking the Provident man makes me so angry…

Who else would have pumped £200 million into the club to keep it going, and carry on building the stadium?

Because Moshiri wouldn't. And I don't see a queue of people lining up.

1. An owner who is currently pretty much refusing or unable to spend money on the club. Why are the Premier League not reminding him of his requirements to the club as owner?

2. A group who wants to buy the club but seems to be struggling to meet the strangely strict (in comparison to any other takeover) conditions imposed on them by the Premier League who are 'minded' to allow the takeover. Once again seems one rule for us and one rule for other clubs to string this out and make it as difficult as possible…

9 points for going into administration, anyone? Can you blame 777 for dragging their heels now and thinking "Fuck me, this club is a shit show and let's just see if they manage the miracle and stay up."

3. Another group of supposed massive Evertonians who are entitled to a 51% share but say they are not too keen but would like to buy the stadium and lease it to the highest bidder. Seems a bit like Kenwright V2.0 if you ask me.

Just sick and tired of this season and the shambles we have become so suddenly – yes you could see it happening over the Moshri / Kenwright partnership years but doesn't it seem to have just played out at speed this season?

We have to stay up, have to get the stadium completed (in our name) and have to start looking elsewhere for an owner (there's more than a couple of rich Sheikhs out there who are apparently fit and proper).

I am very intrigued about these Americans because it was said they were absolutely flabbergasted when 777 Partners were chosen instead of them and, if they do eventually purchase Everton, I do wonder what will come out in the wash.

My worry is that most people like to sleep easy and I don't think anyone who has played the perfect game against one of Putin's friends would be sleeping easy for long, although it's a long time since I had a good sleep myself because of Everton!

I feel your pain. Perhaps Z-Cars should be replaced by Insomnia by Faithless.

That is a very pertinent question given our current plight. One thing we can be absolutely certain of, is that it's not worth the build cost of c £800bn, otherwise we would not be having these problems.

Someone posted that Deloitte had estimated we could increase stadium revenues to £55m. Given it is currently not even £20m, that seems incredibly optimistic to me. A 35% increase in capacity giving a near 300% increase in revenue? That's an awful lot of hospitality to sell.

It's possible the £55m includes revenue from non-football use but even so. I've not seen data for the market in events and conferences for the type of facilities we would offer but I'd be astonished if it provided tens of millions per annum, given we are not exactly the only people offering such facilities. I haven't actually found this Deloitte analysis so can't vouch for its veracity.

My punt would be around £200-300m as a stand alone investment. Even that would rely on a presumption of a lower interest environment. It would also need an anchor Premier League tenant to be viable which would require any investor to have a very tolerant view of the third party risk regarding the performance of this anchor talent. Make your own judgement of that risk given our Premier League position over recent years. It's why it seems 'brave' to own the stadium but not the club.

Maybe this is a bit like Canary Wharf. An ambitious idea that always had the potential to work but not on the framework originally implemented. It took bankruptcy and multiple haircuts all round to make the numbers add up.

The 777 Partners takeover won't happen and I continue to have serious doubts that Everton will ever move into the new stadium at Bramley-Moore Dock.

This is all on Kenwright.

But apparently their American owners won't fund them to defend their title next year and their owners are 777 Partners. Says it all really.

If we go down, they will either walk away or renegotiate with Moshiri.

The shysters don't have the money? Shocking! [sarcasm]

Tony back at 13 and 18 has this nailed. Hopefully a controlling share passes to MSP and they take over the club. It's honestly our only hope. 777 Partners will run us straight into the ground.

If they extend 777's terms past this deadline, this thing officially turns into an absolute farce. Deadlines are placed for a reason. 777 can't raise the funds for a reason. 777 can't meet the Premier League criteria for ownership for a reason.

Please, Premier League, don't be lenient and change your deadline. Hold fast and fuck these snake-oil salesmen right off into the ether, never to be seen again.

Kenwright is the arch villain but there is a wide range of supporting villains who have got us to this state.

Play poker / chess.

if they reject them now 777 could come back at a later date and maintain the Premier League frustrated their acquisition of the club.

If this group, which is currently seeing the demise of just about every one of their other holdings, is rejected, with what money would they prove the Premier League frustrated their acquisition? They're damn near broke and inter-borrowing from Daryl to pay his inbred cousin Daryl.

Additionally, the Premier League is a private league and organization. Any lawsuit forwarded by 777 would be almost immediately dismissed, as the Premier League was simply enforcing their ownership rules within their league.

What legal standing does 777 have?

I'd roll the dice on that angle if I were the Premier League, as I see no way 777 could ever mount, never mind win, a legal challenge claiming they were wronged in a takeover attempt.

The proposed deal is a slow-motion car crash.

One thing I am certain of, nothing good will come of this.

Peter Moores would turn in his grave.

Regulators in the US states of Utah and South Carolina are moving to force five insurers to cut their exposure to the Miami investment firm 777 Partners, according to an official memo seen by the Financial Times. Their demands are intended to protect retirees, widows and orphans relying on annuities and other products from the insurers.

They mark the latest fallout from a dealmaking spree in which 777 has bought sports teams around the world and come as it is bidding for English Premier League football club Everton.

The five insurers and reinsurers belong to the A-Cap group, and together held $11.5bn of assets at year end. Of this, $2.9bn was invested in entities related to 777, according to a notice to all state insurance regulators on Thursday.

Annuities such as those offered by A-Cap's insurers are typically backed by low-risk investments in liquid securities, to provide a safe match for their long-term promises and because policyholders are often able to redeem funds, subject to penalties.

South Carolina rules limit investments in a single issuer to 3 per cent of assets, and in Utah the cap is 10 per cent. According to figures in the regulatory memo, A-Cap investments in 777-related entities were $1.8bn over the threshold at the end of 2023.

Regulators in those states were working together to issue “supervision orders”, the memo said, under which they can direct an insurer to remedy rule violations. A-Cap can appeal against any such orders and challenge the calculations underpinning them.

A person close to A-Cap said partners had already been found to take on its 777 exposure, which it said the memo “grossly overstated”, and it expected a rapid resolution of the process.

A-Cap owns five insurers: Sentinel Security Life, Haymarket Insurance and Jazz Reinsurance in Utah, as well as Atlantic Coast Life Insurance and Southern Atlantic Re in South Carolina. All five were in violation of limits on single-issuer exposure, the memo said.

The potential for forced sales of investments comes as 777 is under heightened scrutiny and faces multiple lawsuits from creditors. A-Cap said its businesses adhered to “the highest standards of operational and financial responsibility”, that it worked “closely and cooperatively” with regulators and took “every necessary and appropriate action to comply” when issues were identified.

“In recent weeks, we have been actively executing a plan to reduce the concentration we have with a particular counterparty — despite the fact that it constitutes a small portion of our total assets under management and far less than has been reported by some. We expect to complete that process imminently, ensuring we remain in compliance with all relevant regulatory guidelines” it said.

The notice to regulators comes five weeks after A-Cap's chief executive, Kenneth King, announced plans to raise up to $400mn of new capital following a credit rating downgrade by AM Best. The rating agency also downgraded the Bermudian reinsurer 777 Re because of fears about the quality and diversity of investments which A-Cap and other insurers had “ceded” to 777 Re to manage.

Initially, 777 Partners made its money in esoteric corners of finance such as structured settlements. Its bid to buy Everton, the nine-time English champions, from British-Iranian Farhad Moshiri has pulled it into the spotlight, drawing scrutiny from local politicians, journalists, insurance analysts and regulators.

The Premier League, which last year strengthened the tests it carries out on club owners and directors, has been assessing 777 since September. A person familiar with the league's process said 777 must meet “strict conditions” ahead of any approval.

In a letter published on Friday, Everton's chief executive Colin Chong wrote that the process had “taken longer than any of us anticipated” but was “approaching the final stages”.

It is unclear how 777 will fund a takeover of Everton if approved, although the firm has provided at least £150mn of loans to the club since September.

In accounts for the year to June 2023 published on Sunday, Everton reported a net loss of £89mn and said its net debt had increased to £330mn from £141mn a year earlier.

Moshiri has been battling to keep funding Everton's new stadium since the pandemic battered the club's finances and Russia's war on Ukraine forced him to cut sponsorship deals with companies associated with former business partner, Uzbekistan-born Russian oligarch Alisher Usmanov.

Everton's accounts warned of a “material uncertainty that may cast significant doubt about the group's ability to continue as a going concern” but said the board was “confident that funding will be secured or refinanced”.

A-Cap entities directly funded some of 777's sports investments, including providing what appears to be $60mn in short-term working capital finance to Nutmeg Acquisition, an entity involved in 777's football deals.

Haymarket also lent $91mn to Jarm Capital, a Delaware company then owned by Josh Wander, co-founder of 777, according to a person familiar with the situation. Wander declined to comment.

777 said A-Cap was one of a number of lenders to the firm and its portfolio companies, and it remained “confident in its ability to fund both the [Everton] transaction and the Club's three-year business plan”.

The Utah regulator declined to comment. South Carolina's regulator did not respond to requests for comment.

Regulators around the world are putting increasing scrutiny on a shift in the investment strategies of life insurers to target more privately traded, illiquid assets, and in reinsurance structures that shift significant risks to offshore firms.

Peter Moores, who is still alive, was CEO at LFC who also ran a successful football club!

If someone wanted to buy a £5m mansion and put an offer in, but didn't have the collateral, it wouldn't go through. It's the same here, surely? I couldn't take it to court to say my application was unfairly dismissed because I couldn't prove my financial position. Is that too simplistic?

While I'm not a lawyer, where 777 Partners might have a case is the implausibly long time it took the Premier League to come up with their recent letter, which frankly could have been sent within a few weeks of Moshiri accepting the bid.

That might be pertinent if we slide into administration and/or 777 Partners don't get all their money back.

I wouldn't entirely rule out legal actions, and not just from 777 Partners.

Cut the wage bill, Everton! It's a joke!

It was indeed Sir John Moores I was referring to – a Freudian slip on my part, compounded by advancing years!

Many thanks for your intervention. :)

He ran the club with an iron grip, insisting that his money was well spent, repaid (albeit interest-free) and the club in the most part was self-funding.

Compare that to the last 30 years which beggars belief in business and football terms. We are at the low point of the history of Everton FC.

Jamie #83 and Mark #89, you're right about the emptiness of the lawsuit threat against the Premier League, but I believe for the wrong reasons.

777 Partners would definitely have both standing and a legal argument to make, and they could hire representation on a contingency basis with no need for a cash layout.

What they do not have is a case for damages. Any lost loan funds would be a Moshiri case, not one to make against the Premier League, and of course the idea of any lost future profits from owning Everton is laughably hypothetical.

Wouldn't they also have to go through the same owners test, even if they were interested?

Fuck me, most press owners are tax exiles themselves these days albeit not the Guardian. It's taking on the sniff of a bloody vendetta.

It might be more newsworthy to expend the same kind of hack energy to investigating what Man City, Chelsea and Newcastle have been up to, for fuck's sake.

Here's an opinion of an Accountant from another Board on the situation:

Both Deloitte and BDO resigned. Their decision not ours. Not planned auditor rotation. Each new auditor less prestigious than the last. This is a pattern you see only with businesses that are either dodgy/borderline criminal or in serious financial trouble (or both). It means if our accounting treatment goes to a proper expert panel and experts from the Big 4 say our minnow got it wrong it is very unlikely the minnow wins the argument. IF.

As I've mentioned on here before (although a Financial Dunce!) it's my understanding that it's quite a big red flag when auditors look at your books and decide that they aren't willing to put their name/reputation to them so they walk away...

I'm not sure of the correct analogy, but a Simpsons reference usually works, so it does feel that our current auditors are very much in the Lionel Hutz/Dr Nick Riviera bracket...

No level of fee could compensate for the potential downside if something went wrong.

The big 4 have stepped away from a huge number of small assignments. The audit fee for Deloitte in 2016 was just £61k.

The big 4 post Carillian PLC have exited from a number of clients as they just make enough money from them. They are a huge amount of risk for the big 4, and so it's no surprise that they're concentrating on big clients and non-audit services which are more lucrative.

I know they've jacked up audit rates which has caused issues in the regional offices, where regional clients can't justify the fee.

I know for a fact a couple of big 4 would not do an audit for less than £150k, which is typically twice the mid-tier for a similar assignment.

Easy to speculate, but likely to be a lot easier answer.

f there's the possibility of new issues, with possible further negative consequences for us, then I want to know about them, not bury my head in the sand. (I think Everton did that and look where it got us.)

I might dismiss any new reports as not important once I've read them but I'd rather have the chance to decide that.

777 Partners are ploughing money into the club and apparently looking to settle existing debts when they actually owe the club nothing and could feasibly just walk away.

The whole existing scenario is just odd from all sides. A silent owner, funding from a non-accountable source, zero outcome on ownership buy-out and no active decision on continued going concern.

The club are waiting on the outcome of the change in ownership to make any formal decision yet 777 Partners appear within inches of going under themselves, which ironically, they see owning Everton would resolve.

There is still the plausible outcome that 777 Partners buy the club and place the club into administration.

Everton was only one of several clients Deloitte and BDO walked away from for the reasons you said.