Finance Expert rages over West Brom loan, blasts ‘contemptuous’ move in direct tweet
Kieran Maguire has blamed West Brom for treating the minority shareholders in a “contemptuous” way after the club secured a £20 million loan to finance the running of the football club.
The Baggies confirmed on Wednesday (28 December) that they have secured a four-year loan against all of their assets which will be used to finance the general business operations of the football club.
Maguire, a finance expert who has worked for The Times, has criticized the club for not being transparent about the details of the deal, especially the interest rate and the repayment schedule.
“No interest rate given or repayment schedule. Poor governance, lack of transparency and a contemptuous way to treat minority shareholders if information not communicated. MSD lent to Southampton at 9.14% when interest rates much lower than at present,” wrote Maguire in direct response to West Brom’s announcement on Twitter.
Spot on
Maguire is absolutely spot on here. The Baggies were once a well-run club, but now they are in a complete mess, both on and off the pitch.
The club owner Guochuan Lai doesn’t make an appearance at the Hawthorns and he doesn’t bother to communicate with the fans either.
The official statement from the club lacks transparency. The fans deserve to know the details of the deal, as it appears that the club have taken a massive gamble.
It is not clear about the repayment schedule and the details of the rate of interest have not been shared. Maguire suggests that when Southampton borrowed money from MSD, the rate of interest was 9.14%, but the current market rate is much high.
The information has not been properly communicated. West Brom’s total income this season is likely to be in the region of £45-50m, mainly due to parachute payments, and it will further drop in 2023/24.
Therefore, it appears that the Baggies are hopeful of getting into the Premier League in the next one or two years. In that case, Lai will have the chance to pay off the loans, and further he can sell the club.
However, the decision can totally backfire and the club could land into real financial trouble.
In other West Brom news, Jake Livermore is facing an uncertain future after the latest Carlos Corberan decision