Everton among three ‘big ones’ as drama rumbles on at Premier League HQ – Stefan Borson
Everton, Arsenal and Brighton could now turn the owners’ debt into equity after Manchester City’s win over the Premier League, according to Stefan Borson.
The finance expert has referred to the trio as the big ones as all have a lot of debt after taking loans from their owners and shareholders.
It’s understood that the Toffees are in debt of £451million by way of loans from their shareholders and/or owner. [The Times, 7 October]
Borson told talkSPORT on 10 October: “First of all, City actually, when it came to a vote, were in favour of being excluded.
“Now I think I think as Ben analysed, I think what we’ll see probably is most of the teams that are affected will just convert those loans to equity and it won’t be an issue for any of them.
“The three big ones are Everton, where we know that the debt is valued at zero as part of the transaction with Friedkin. Arsenal, who have got £200million to a 100% shareholder and likewise with Brighton at something like £375 million.
“So all of those can be dealt with with a debt for equity swap quite easily and so I don’t see those being a big issue.”
Everton will be hoping the takeover goes ahead without any issues
The conversion of debt to equity effectively nullifies the debt’s immediate financial burden, transforming it into ownership equity, which is particularly beneficial for the Toffees, heavily leveraged with shareholder loans.
The Friedkin Group, having already agreed to buy the club, likely foresaw this scenario, planning to convert or settle these debts as part of their acquisition strategy.
This move not only aligns with financial restructuring often sought by new owners but also avoids potential complications from the debt in regulatory or league oversight.
For Friedkin, converting debt to equity could simplify financial statements, making Everton appear more financially stable, which might be crucial for securing necessary approvals or attracting further investment.
Thus, this situation might actually align with Friedkin’s takeover plans, minimising any adverse impact on their acquisition timeline.
It also leaves the Premier League backed in a corner as there’s not much that can be done now.
In other Everton news, Alan Myers has claimed that the club have now agreed a deal in principle to secure a new free agent signing.
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