City & FFP | 2020/21 Accounts released | Revenues of £569.8m, £2.4m profit (p 2395)

asahartford1 said:
It would have to be by loan, wouldn't it ?
We haven't got a big piggy bank or savings in the tsb.
Click to expand...
Not necessarily. As it doesn’t count towards FFP our owner could pay for it himself through a personal loan to the club or by injecting cash through equity.
 
SWP's back said:
Not necessarily. As it doesn’t count towards FFP our owner could pay for it himself through a personal loan to the club or by injecting cash through equity.
Click to expand...

A personal loan is still a loan.

I thought an owner could only invest so much cash per annum, not enough to fund a stand.
No expert so am willing to learn.
 
Many possible reasons for taking a loan, including tax considerations, cash flow management, fairly common capital investment liability/indemnity, and so on.

It’s rather common for successful businesses to use loans to manage all of the above and more, so I would not worry unless we have other information to give us cause for concern.
 
asahartford1 said:
A personal loan is still a loan.

I thought an owner could only invest so much cash per annum, not enough to fund a stand.
No expert so am willing to learn.
Click to expand...
A loan is a loan you’re right but there’s no law in the world that stops a business owner loaning his company money and they can convert into equity if they like (ie it stops being a loan as the company doesn’t pay it back).

That’s why I mentioned redoing the north stand doesn’t feature in the ffp equation.
 
asahartford1 said:
A personal loan is still a loan.

I thought an owner could only invest so much cash per annum, not enough to fund a stand.
No expert so am willing to learn.
Click to expand...
There's a difference between a loan and equity, which involves buying shares. Sheikh Mansour could lend us a billion pounds and that's OK as it's not classed as income. When we spend that money however, we can only do that within FFP rules. When owners have to make up a loss for FFP purposes, they're only allowed to put in (I think) €30m over any 3-year period. So he could lend us that billion, we could make a €35m aggregate loss over 3 years (as all clubs are allowed to lose €5m) and he could cover €30m of that without problems.

If we were building a new stand, that wouldn't fall under FFP restrictions as it's a capital expenditure not a revenue & expenditure cost. So he could fund all of that without any issues.
 
Prestwich_Blue said:
There's a difference between a loan and equity, which involves buying shares. Sheikh Mansour could lend us a billion pounds and that's OK as it's not classed as income. When we spend that money however, we can only do that within FFP rules. When owners have to make up a loss for FFP purposes, they're only allowed to put in (I think) €30m over any 3-year period. So he could lend us that billion, we could make a €35m aggregate loss over 3 years (as all clubs are allowed to lose €5m) and he could cover €30m of that without problems.

If we were building a new stand, that wouldn't fall under FFP restrictions as it's a capital expenditure not a revenue & expenditure cost. So he could fund all of that without any issues.
Click to expand...

Thanks.

So in your opinion why has a loan been arranged and what is it for.

Will not hold you to your answer.
 
Murph said:
Not sure why the club would need to take out a loan?
Click to expand...
Cash flow. Don't think that's anything to worry about. Probably just the Sheikh wanting 6 degrees of separation for show for his investment, ie we don't go legging it to him every time we need cash.
 
bluedan said:
I'm sure Sheikh Mansour has had previous dealings with Barclays before.

Perhaps we could see him buying shares in the bank again, and writing off the loan at their end...?

Would that work and bi-pass FFP to make a big signing ?
Click to expand...
No.
 
OB1 said:
Maybe it's all part of Mansour wanting the club to completely manage its own finances at this point.
Click to expand...
This is my read on it.
OB1 said:
It won't have anything to do with getting round FFP.
Click to expand...
Yep, we don't need to get round it, we're in the top 5 richest clubs in the world in our own right.
 
asahartford1 said:
A personal loan is still a loan.

I thought an owner could only invest so much cash per annum, not enough to fund a stand.
No expert so am willing to learn.
Click to expand...
Infrastructure costs (ie stadium redevelopment) and youth investments don't count under FFPR.
 
blue b4 the moon said:
Thing is we made £1m profit last year, with this loan if it's big enough the intrest could be enough to put us in the red.
Click to expand...
We included 13 months of wages and 12 months of income in last year's accounts as we moved our year end date, profit was probably actually around £20m. Dry your knickers ;)
 
asahartford1 said:
Thanks.

So in your opinion why has a loan been arranged and what is it for.

Will not hold you to your answer.
Click to expand...
Read the answers above. For Mansour to show City as a successful investment we can't keep going cap in hand to him every time our cash flow is low, this is probably a short term loan to put a down payment on the two incoming players and to pay out end of year bonuses.
 
Etihad Airways are in dire financial straits, and are even looking into a partnership of sorts with Emirates.

Anyone concerned that the rather large commercial investment they have in City will dry up?

£3.5B in 2 years is not an insignificant loss, nor does them working with Boeing and Airbus to delay and/or cancel billions in aircraft orders bode well for future growth.

They are in SEVERE retrenchment mode. One wonders if we are going to need a rather large new commercial sponsorship in the near future... one that is not directly tied to Abu Dhabi would be preferable, esp. from a FFP perspective.
 
You must log in or register to reply here.
Unread Posts

Don't have an account? Register now and see fewer ads!

SIGN UP
Back
Top