Leicester City £124m confirmed: official paperwork filed
Leicester City’s owner has converted £124million of loans into equity in the form of two new share issues, sources have told Football Insider.
A Companies House submission on 24 January, backdated to 10 January, revealed Aiyawatt Srivaddhanaprabha has converted £94million into 94 million shares worth £1 each.
A further update that same day revealed he has also switched £30million of loans into 30 million shares worth £1 each, taking the total to £124million.
Leicester are now free of any shareholder loans previously owed to the Thai businessman, with the latest manoeuvre taking his family’s overall investment in the club to more than £420million.
It was confirmed in November any shareholder loans still in effect after 11 January must be submitted as an associated party transaction (APT) and undergo a fair market value assessment following the Premier League’s recent legal battle with Manchester City.
Any money now loaned to a club by their owners will need to reflect fair market value and see interest rates charged in line with commercial loans.
Srivaddhanaprabha’s decision to convert the £124million into equity ensures Leicester will not be forced to pay any interest on his loans.
Leicester City PSR saga remains ongoing
Leicester have enjoyed great success since King Power secured its takeover of the club in 2010.
The Foxes have won the Championship twice, the Premier League, the FA Cup and have featured in all three European competitions over the past 15 years.
Although Leicester were charged with a profit and sustainability (PSR) breach for 2022-23, they are yet to face any punishment after successfully appealing against the decision.
The Premier League has since challenged that verdict and arbitration is currently ongoing.
There were fears Leicester would fall foul of the regulations for 2023-24, but the Premier League didn’t issue charges to any clubs earlier this month for a spending breach.
Under the PSR rules, top-flight sides are permitted to make £105million – or £35million a season – of losses over a three-year period, but that drops to £13million a year in the Championship.
Finance expert Stefan Borson told Football Insider Leicester avoided a breach after their spending limit likely remained at £105million despite playing in the second tier last season.
Ruud van Nistelrooy’s side have now moved out of the Premier League relegation zone into 17th place following their 2-1 victory over Tottenham on Sunday (26 January).
In other news, Leicester turn attention to signing Tariq Lamptey.
For more Leicester City news, follow us on Facebook or join our brand new WhatsApp Channel for instant updates to be sent straight to your phone.