Moshiri pledges to convert Everton debt into shares amid takeover uncertainty

In England, Everton owner Farhad Moshiri has pledged to convert his £451 million loan to the club into shares if the sale of the club is not completed before new Premier League regulations come into force on January 11, 2025. These regulations will impose stricter tests on shareholder loans based on fair market value. Recently, Everton has been embroiled in financial difficulties due to the sanctions placed on one of its main backers, Alisher Usmanov, which significantly disrupted the stability of the club’s finances. This has put pressure on Everton to manage its debts and comply with profitability and sustainability rules, especially after facing deductions in the previous season due to breaches of these regulations. The club is currently in negotiations with the Friedkin Group, known for owning AS Roma, for a potential takeover. Moshiri's agreement is aimed at alleviating some of the financial strain on the club and ensuring that there will be no shareholder debt once the sale goes through. The proposed amendments to the handling of shareholder loans have complicated the situation, as loans will be treated as associated party transactions after the new regulations are instituted. Consequently, this will require any loans to be accounted for differently, leading to potential interest charges under the profitability and sustainability calculations. The Premier League is in the final stages of due diligence on the takeover, and both parties involved are hopeful that the deal will be finalized soon. Everton's financial woes date back to their attempts to sever ties with Usmanov’s companies after the sanctions were imposed, which eliminated significant sponsorship revenue. This, combined with the outstanding debts extending beyond Moshiri's loan, has created a complicated business environment for the club. The urgency of the situation has prompted Moshiri to take decisive steps to convert loans into shares, thereby creating a clearer path toward the completion of the sale and Vancouver restructuring of the club’s financial commitments. In the context of these financial challenges, the Everton board and fans are eagerly awaiting news on the successful acquisition by the Friedkin Group, which is seen as a way to bring stability back to the club. The overarching sentiment within the club is one of cautious optimism, as many hope that the completion of the takeover will close a chapter of uncertainty and turmoil in its ownership and financial governance.