Everton turns to China as it pursues Moshiri’s Great Leap Forward

By David Owen

March 8 – Everton has turned to China as it seeks to push on with the Farhad Moshiri revolution and mount a sustained challenge to the Premier League’s Big Six, including local rivals Liverpool.

The club’s accounts, now available at Companies House, reveal that the Toffees have agreed a three-year revolving credit facility with the Industrial and Commercial Bank of China, the largest bank in the world by assets.

The total amount available for drawdown is £60 million, and notes on borrowings in the accounts make it look like the club had already drawn £43 million at end-May 2018, its financial year-end. The notes also suggest that the facility is secured over Premier League broadcast rights and incurs interest at 3.5% above LIBOR.

The club’s net debt position at year-end stood at £66 million, against net cash of £9.6 million a year earlier. An interest-free shareholder loan of £150 million is accounted for as equity. The club also arranged financing against player receivables with Santander. The notes to the accounts indicate that the amount involved here is £32.2 million at interest of 3.5% a year.

The club’s chief financial and commercial officer revealed that an additional shareholder loan of £100 million had been received post year-end.

The year included a stream of incomings and outgoings of both players and managers, involving the likes of Gylfi Sigurdsson, Jordan Pickford and Romelu Lukaku.

According to the cash flow statement, the club spent £155.8 million on new players, receiving proceeds on player disposals of £52.6 million.

The effect of player trading on the bottom-line was rather different, however, with a towering one-off profit of £87.8 million helping to convert a £98 million operating loss, including player and management trading, into a pre-tax loss of just £13.1 million.

Moshiri (pictured), an Iranian businessman, bought a 49.9% stake in Everton three years ago. The club plans in due course to move from its historical Goodison Park home to a new stadium at Bramley Moore dock.

The accounts also disclose that the club has entered into a 15-year agreement to lease space in the Royal Liver Building, one of Liverpool’s best-known landmarks. The club’s majority shareholder is said both to have an ownership interest in this building and to be a shareholder of USM Holdings, parent company of the entity which has been paying the club £6 million a year for naming rights at its Finch Farm training complex.

Directors’ remuneration jumped again to just under £2.5 million from £1.6 million in 2017 and just £370,000 as recently as 2015. The highest-paid director received £927,000, up from £588,000 – an increase of more than 57%.

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