PIF and RB Sports & Media - Darren Eales to step down from CEO after being diagnosed with blood cancer.

[NWMag]

 

 

not sure what this means

[Rich]

Another £40M, aye.

[MagCA]

It means the owners have put 40 million in shares to the club, it’s a common tactic used for running costs I believe. (Not sure it is used for transfers etc as it does not count towards FFP but I may be wrong)

[r0cafella]

This kind of thing has no relation to FFP. As rich said it’s just injecting more capital in to the club. 

[MagCA]

Looks to be the second investment from them. Third if you count the initial outlay of 305m. Second was 38.5m, this one 40m. I figured that is what the PZ Newco stuff means when it says 383.5m in allotment of shares

[Geordie Ahmed]

Where are they getting this money from? I'm sure some financial wizard on rtg said our owners are actually broke and the takeover is not what it seems? 

[Guest HTT II]

Just now, Geordie Ahmed said:

Where are they getting this money from? I'm sure some financial wizard on rtg said our owners are actually broke and the takeover is not what it seems? 

Back of their sofa…

[Sima]

4 minutes ago, Geordie Ahmed said:

Where are they getting this money from? I'm sure some financial wizard on rtg said our owners are actually broke and the takeover is not what it seems? 

 

Maybe RTG should canvas opinion on the mindset of our owners from someone with a PhD in political and moral philosophy.

[TRon]

18 minutes ago, Geordie Ahmed said:

Where are they getting this money from? I'm sure some financial wizard on rtg said our owners are actually broke and the takeover is not what it seems? 

 

Tbf, the clarity becomes a bit fuzzy when you are looking all the way back from the third division.

[nbthree3]

 

[loki679]

Probably extend the metro all the way to Carlisle for that.

[Miggys First Goal]

£319 trillion?

 

Should we just be our own planet at this point?

[TK-421]

So our shares are selling for £40m each?

 

Nice! 

[Awaymag]

wonder if that price will be honoured if I cash in the old NUFC share I purchased way back in John Hall time.    What a nice little earner that will have been

[gdm]

15 minutes ago, Awaymag said:

wonder if that price will be honoured if I cash in the old NUFC share I purchased way back in John Hall time.    What a nice little earner that will have been

Haha That’s long gone mate. I still have my cheque

 

 

Edited February 4, 2022 by gdm

[Abacus]

I think the nominal value of the share is 5p, not 50p. Not that it really matters.

 

It's also right that this will have nothing to do with FFP, but I think it might be related to our recent transfers.

 

If I had to guess, many of those transfers will have needed an up front cash payment, as well as later installments.

 

So, it could just have been to cover that short term cashflow need. Issuing 1 share (presumably to PIF) would also barely affect the existing 80:10:10 ownership structure.

[Scoot]

If you read the comments too, it seems a lot of stuff is up for sale very cheap. 

 

New sponsor incoming?

 

 

Edited February 4, 2022 by Scoot

[HaydnNUFC]

1 hour ago, nbthree3 said:

 

 

Can someone explain what this means to dummies? What have they done or trying to do and how have they done so?

[number37]

8 minutes ago, HaydnNUFC said:

 

Can someone explain what this means to dummies? What have they done or trying to do and how have they done so?

I think it's a way of injecting cash into a business, which is a separate legal entity to a person or other business. You're not allowed to just transfer money into the NUFC account because that's pretty much money laundering so issue a new share or shares in the company and sell those to yourself. Well, technically NUFC sold one new share to PIF for £40 million or whatever. 

 

A director loan would be another way, the Mike Ashley way, but that counts as debt and not equity (but can later be converted to be). 

[Yorkie]

@Phoenix711 posted a good article which explained how Man City did it the same way.

 

https://www.theguardian.com/football/2010/aug/26/manchester-city-sheikh-mansour

[Scoot]

22 minutes ago, Yorkie said:

@Phoenix711 posted a good article which explained how Man City did it the same way.

 

https://www.theguardian.com/football/2010/aug/26/manchester-city-sheikh-mansour

[Abacus]

35 minutes ago, HaydnNUFC said:

 

Can someone explain what this means to dummies? What have they done or trying to do and how have they done so?

It's been set out well above.

 

You should ignore Kieran Maguire's summary on this on that tweet - he's basically just making a joke there.

 

Any company (like NUFC) can raise cash by issuing and then selling more shares in itself, either to new investors, or to existing ones.

 

This will be to an existing investor, since there's no way anyone else would pay £40m for a single share.

 

It just means the club needed cash, and this is just one common way of doing that, rather than taking out a loan.

 

We don't know what that cash was for - my guess above was re the recent transfers.

[RS]

Somewhere there’s a “grumpy old man’s” dog currently taking a hell of a kicking!

 

 

Edited February 4, 2022 by RS

[Phoenix711]

7 minutes ago, Scoot said:

 

Abacus explains it well but to put it in lay terms, if you want to buy something on Amazon you could use a credit card or debit card. The former you don't have the money but will pay it back with interest later, the latter, you have the money in your bank account.

 

Newcastle's owners basically used a debit card and need to put some money in the account (as abacus said, probably for transfers). You might wonder aren't the owners losing money? Technically no because they convert the cash they put into equity but in reality they are in the short term.

 

In contrast, Man Utd's owners, the Glazers, use a credit card for everything and saddle the debt onto Man Utd account and because of Man Utd commercial success, use that to pay off the interest. This is what annoys a lot of Man Utd fans. I've over simplified it but that's the general gist.

[Jackie Broon]

2 hours ago, Abacus said:

I think the nominal value of the share is 5p, not 50p. Not that it really matters.

 

It's also right that this will have nothing to do with FFP, but I think it might be related to our recent transfers.

 

If I had to guess, many of those transfers will have needed an up front cash payment, as well as later installments.

 

So, it could just have been to cover that short term cashflow need. Issuing 1 share (presumably to PIF) would also barely affect the existing 80:10:10 ownership structure.

 

I think it does make a difference for FFP to some extent, because FFP only allows losses of up to £15m per season unless those losses are covered by "secure funding", the limit goes up to £115m over three seasons if those losses are covered.

 

One of the forms of "secure funding" is "contributions that an equity participant has made by way of payments for shares through the Club’s share capital account or share premium reserve account".