Everton’s hopes of improving their financial situation have suffered a major setback as MSP Sports Capital has withdrawn from talks about taking a minority stake in the club. The New York-based investment group had signed an exclusivity agreement with the Premier League side in May, with plans to invest up to £150 million in convertible debt that would become a stake of approximately 25 percent in the club.
The deal involved £100 million of the investment going to Everton Stadium Development Company, a subsidiary set up by club owner Farhad Moshiri to oversee the construction of Everton’s new ground at Bramley-Moore Dock, while the rest would go to the club. However, the deal has now fallen through due to opposition from one of Everton’s existing lenders, Rights and Media Funding Limited.
Everton currently has a loan facility with Rights and Media Funding Limited, which the club extended to £200 million this year. The debt is secured via four charges on club assets and includes negative pledge clauses that allow the lender to demand repayment before the borrower takes on any further borrowing. The lender was reluctant to give up its protection against possible default, leading to the collapse of the deal with MSP.
While Everton won’t be receiving additional investment from MSP, the U.S. group is still proceeding with a £100 million loan to the stadium company. This loan will enable Moshiri to repay the £40 million he borrowed from English businessman Andy Bell in May, which was intended as a bridging loan for the larger MSP investment.
However, it remains unclear if the MSP loan will unlock the rest of the funding needed to complete the stadium. The original plan was for the remaining £260 million to come from a five-year construction loan sourced by global banks JP Morgan and MUFG, but that was contingent on MSP taking an equity stake in the business.
In addition to their financial struggles, Everton has had a difficult start to the 2023-2024 season, losing their first two matches and currently sitting at the bottom of the Premier League. The club has also made limited additions to their squad this summer, with only four new players, and manager Sean Dyche has expressed concerns about the fitness of the one player who cost a fee.
With MSP out of the picture for additional investment, Moshiri is exploring alternatives, including resuming talks with Miami-based investment firm 777 Partners. However, it remains to be seen if these talks will progress further than previous discussions earlier this year.
Beyond the financial challenges and slow start to the season, Everton is also being investigated by an independent panel for possible breaches of the Premier League’s spending rules. A ruling on the matter is expected later this year.
Moshiri, who bought the club in 2016, has invested at least £750 million into Everton. However, his free-spending approach to football was supported by his business partner Alisher Usmanov, whose financial support was cut off last year due to sanctions imposed on him following Russia’s invasion of Ukraine. This led to the cancellation of several lucrative sponsorships with Usmanov-owned companies and created further complications in the stadium-financing plan.
Despite these challenges, Everton remains one of England’s most successful teams in terms of silverware and has a rich history in English football. The club’s supporters will be hoping that alternative investment options can be found and that the team can turn their season around.
MSP Sports Capital, Everton, and Moshiri were all approached for comment but declined to do so at this time.
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