Kieran Maguire: Aston Villa have just banked £16m ‘free-money’ windfall
The £15.5million that Aston Villa shareholders have just pumped into the club is effectively “free money”.
That is the view of finance guru Kieran Maguire, speaking exclusively to Football Insider about Villa’s latest share issue.
A submission with Companies House on Tuesday (18 October) revealed that the club had allotted 15.5million shares at £1 each.
It is the second time, who yesterday (20 October) parted company with manager Steven Gerrard, have issued shares this year.
The club has not turned a profit in over a decade, although they are expected to end that record when they release their figures for the 2021-22 campaign.
Maguire claims that this latest share issue is to boost Villa’s standing under Financial Fair Play after years of losses.
“This is one of many that have taken place under Edens and Sawiris,” he told Football Insider’s Adam Williams.
“It’s likely that the club has been losing money on an operational level. Therefore, the option is either this or to go to the loan market to have debt-based financing.
“The downside to that is that A) it has to be repaid and B) if it’s from a third party, there will be interest involved as well. That eats into your profits and your ability to compete in the transfer market because of FFP.
“By having an equity issue, the benefit to Villa is that it effectively free money from the shareholders.
“Remember, under existing FFP rules, clubs are only allowed to lose £15m over a three-year period and then an investment of up to £90m from owners in the forms of shares.“
In other news, Aston Villa set to hold Unai Emery talks as Mauricio Pochettino misgivings revealed.