Nottingham Forest save ‘£8m’ through new Marinakis move – Stefan Borson
Nottingham Forest have avoided having to pay a market interest rate on Evangelos Marinakis’s loans after he’s converted £82million into shares.
That is the view of finance expert Stefan Borson, who exclusively told Football Insider it would have cost the Premier League side around £8million a year if the Greek businessman didn’t make the investment.
A Companies House submission on 23 December revealed Marinakis has converted £82million worth of loans into 82 billion shares worth one pence each.
The 57-year-old has made a series of moves to convert debt into equity since securing his takeover at the City Ground in 2017.
The latest injection comes after it was confirmed shareholder loans will be required to 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.
Nottingham Forest avoid new PSR blow after latest injection
Borson revealed it is essential the Forest owner converted his loans into shares to prevent his club from suffering a financial hit.
He told Football Insider: “Marinakis seems to do a sweep of the balance sheet every year to either write off the debt or put more equity in, so the balance sheet looks clean at the end of the year.
“Although he did it in June of last year, now that the changes have come through on the associated party transaction rules in relation to shareholder loans, it was essential that he did that.
“Otherwise, they would have to pay a market interest rate on the £82million of debt.
“That would probably be something in the order of 10 per cent, so that would have cost them over £8million a year on the PNL for PSR.
“Obviously, they don’t want to do that, so it was the easiest thing to do.
“I think it’s just cleaning up the balance sheet.
“Those loans are effectively equity anyway because he owns 100 per cent, so I wouldn’t consider it to be anything particularly significant or unexpected.”
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