Ridiculous West Brom news emerges after disturbing loan figures – Kieran Maguire
Kieran Maguire has shared “disturbing” news on loans taken out by West Brom which could affect their transfer plans with more player sales.
The finance expert admitted that it was “ridiculous” as a £2million loan taken out for repayment in 2022 could now hit £10million if not repaid by March 2025.
Maguire admitted that if West Brom are forced to sell players because of that, there may not be confidence that it will be used to repay these loans if needed.
Speaking on the Price of Football podcast [28m00], Maguire was asked about the loan situation at West Brom. He said: “There are some slightly disturbing figures coming out this week.
“There are a few loans which are a cause for concern. First of all, there’s a loan to Guochuan Lai in his Hong Kong-based industry, that was for just under £5m, that was promised for repayment in mid-2022, then by the end of 2022, and his most recent comment was the loan will be repaid early in 2023. It’s the 16th of August, that’s not early.
“Equally concerning is it’s a loan which has come from what appears to be a boiler company in the Midlands called ‘Warmfront Holdings’ and the loan was for £2m and it had a repayment amount, it appears to be effectively secured on some of the shares of one of the West Bromwich Albion companies.
“The loan was originally due for repayment on 28 February 2022, repayment wasn’t made. The loan was then extended to 31 May 2022, not repaid. There is an interest penalty in the small print of the accounts which says in the event of non-payment, we’re going to move to a punitive interest rate of five per cent per month, from my understanding, you end up paying interest on the interest.
“This £2million loan which was taken out for repayment in 2022, if you start to compound the interest, five per cent interest monthly works out as an annual interest rate of 73 to 75 per cent, so by March 2025 that £2m loan will have turned to £10m outstanding, which is just ridiculous.
“It is a concern, West Brom – are they going to be forced to sell players? If they are, do we have any confidence that the receipts from these player sales will be used to repay these loans? It’s deeply concerning.”
Worrying times at West Brom
Fans are right to be concerned about the ongoing operations behind the scenes, as desperation for further investment and new ownership intensifies and Lai shows no signs of caring.
The financial situation is a dark and ridiculous one. There is confusion on all sides, and what seems to be a complete willful ignorance from the man at the top, while the fans, players and staff are the ones who suffer.
The worst-case scenario would be that, if the loans aren’t repaid, the club would become collateral. Now, there is no guarantee of this, and by all means the loans may still be paid off, but it is the risk Lai is taking with his current actions.
There is an acceptance at the club currently that some star players will need to be sold to balance the books, but that need is rapidly becoming critical, and even if players are sold, there is no guarantee the funds raised will be put towards paying off these loans.
Maguire’s description of the situation as “deeply concerning” and “ridiculous” rings true, and the situation needs to be resolved before things get even worse.
In other West Brom news, one star’s injury is set to be assessed ahead of the game v Leeds.