Kieran Maguire has raised the threat of Everton facing administration if 777 Partners do not receive Premier League approval to take over the club.
Alan Myers reported last Friday (26 January) that the American investment fund has put a further £13million loan payment into the club, taking its investment to date to £160m.
Should 777 not be given the green light to succeed Farhad Moshiri at Goodison Park, they can demand their money back, which the Toffees are in no position to pay back right now.
Speaking on The Price of Football podcast [1 February, 8m 37s], finance expert Maguire said: “777 Partners has added a further £13m in terms of loans to Everton, taking the grand total to £160m. This raises further questions.
“First of all, where on earth are 777 getting this money from? They don’t seem to be issuing shares. If they’re borrowing the money themselves, one would imagine they’re paying fairly high rates.
“A cynic might say they are trying to create a ‘debt bomb’. They are loading up Everton with so much debt as to make it unpalatable for alternate owners – and there is other interest I’m aware of from other investors – that you wouldn’t want to take over the business.
“These are unsecure loans 777 can demand repayment on immediately. It’s also an undirect way into forcing the Premier League into giving approval as they’ve put all this money in.
“If they don’t get approval they can demand the money back, which the club don’t have and it could go into administration or worse and the Premier League are seen as being the bad guys.
“777 are playing games, which they’d say is part of business, but football is not a business – it’s an emotional investment.”
Concerning period
To some, 777 putting more money into the club last week could be considered a sign of goodwill as they help with day-to-day running costs.
The Americans are not in this through a love of all things Everton, though, and this is – as Maguire rightly says – a business decision.
You would like to hope that if the Premier League block the takeover – and that is a possibility – then 777 will not demand the money back instantly.
That really would be a disaster for Everton, unless other backers are waiting in the wings to push through a swift takeover of their own.
Right now, the debt is piling up and will only further increase until Moshiri is ousted. The worst-case scenario for Everton is that 777’s takeover is blocked and new investors have to wait, say, another six months to come on board.
Quite where the club will find the money from to pay back these costs and also keep up with general running costs is anyone’s guess.
It makes for a concerning period for Everton, and that is without even considering the prospect of relegation from the Premier League.
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