18 Mar 2018 23:51:18
Question for ed2 if you're about although I'll understand if you don't want to answer/ post.
I'm reading the article on Swiss Ramble on Liverpool's finanaces from last year and it talks about FSG converting the clubs debt to them into equity. My question is how does this work? Does FSG basically just use the money owed to aquire more shares of the club or is it more complicated than that?
I would be interested in your answer but again I understand money isn't a topic you like to cover so no worries if you don't.
Really interesting article Reds I recommend it if you haven't already seen it but it's a bit dated now.

{Ed002's Note - it means that the club has increased in value to a sufficient level that they would be converting what they are owed in to part of their shareholding and not chasing the debt. It is tax efficient.}

1.) 19 Mar 2018
19 Mar 2018 10:58:05
Hi Ed002,

Firstly, thank you for your continued insight into the finances of the game. Have you managed to sort out your living situation yet or are you still bouncing from one place to another?

Out of curiosity, how would them capitalizing their debt into equity result in a tax saving? I thought the benefit of debt was that the interest payments would be tax deductible (providing they meet transfer pricing and interest deductibility rules) where as equity gives no such tax benefit.

Red Sandman.

{Ed002's Note - The owners are not making interest payments, they are in theory able to take them but in practice have been accruing the interest. By turning their debt in to equity they will not be liable for tax on the interest which they have been accruing. Plus the club has starting increasing their debt again and it will allow them to borrow more from third parties.

I am a few weeks away from the new home and am in Israel at present - if the weather improves in England we will return and likely use a property one of my wives has, or else I still have property in Monaco that I could use. So we are getting there thanks.}

2.) 19 Mar 2018
19 Mar 2018 19:46:09
Thanks for the response ed.