777 Partners’ proposed takeover of Everton now faces another delay after the American company requested more time to finalize key elements of the deal.
It emerged last month that the Miami-based group’s takeover had gained conditional approval from the Premier League, subject to certain conditions being met. One of the league’s stipulations was that 777 would have to repay the club a £158 million ($198.2 million) loan from fellow US investors, MSP Sports Capital, by Monday April 15.
But 777 asked MSP to extend the deadline for repaying its loan, casting further doubt on the buyout. This is despite 777 saying last month that it was “confident in its ability to finance both the transaction and the club’s three-year business plan… as part of its ongoing regulatory approval process” .
Under the terms of the loan agreement with current Everton owner Farhad Moshiri, MSP is entitled to 51 percent of his shares in the event of default.
The two US investment companies are in talks but no solution has yet been found and 777 now expects the approval process to extend until May.
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777 entered into a buyout agreement with Moshiri in September and was confident it would be finalized by the end of 2023. Approval was granted by the Financial Conduct Authority – one of three parties that must review the deal. agreement – in December, but progress has slowed since then. Meanwhile, 777 has provided the club with around £160 million in loans to help finance its daily working capital and the costs of the new stadium.
Last month’s announcement that the Premier League was considering approving the takeover was seen by some as a positive step forward, but the conditions outlined by league officials at 777 remain difficult for the investment firm.
Alongside repaying MSP’s loan, 777 was also asked to convert its own loans into equity, place the club’s funding in an escrow account and demonstrate that it has the necessary funding to ensure the completion of the club’s project. Everton’s new stadium. As things stand, a new tranche of funding will be due at the end of April.
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Everton recorded losses of just under £400m between 2019 and 2023, resulting in two separate breaches of the Premier League’s Profitability and Sustainability Rules (PSR). Their 2023 accounts also showed the debt stood at £330 million.
Earlier this week, an independent commission deducted two additional points from them for violating the PSR in 2022-23. This followed another deduction earlier this season of 10 points, reduced to six on appeal, for a PSR violation during the 2021-22 campaign.
The club have already announced their intention to appeal their 2022-23 sanction, but the two deductions left Sean Dyche’s side just two points clear of relegation with seven matches remaining in the season .
777, Moshiri and MSP have all been contacted for comment. Everton declined to comment.
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(Matt McNulty/Getty Images)