High-interest West Brom loan detail emerges after official announcement
West Brom have borrowed more cash from MSD Holdings with the “same base interest rate” as the original loan from last year, according to the Birmingham Mail.
In 2022, Albion confirmed they had secured a £20million loan, against club assets such as The Hawthorns, from MSD. On Monday (27 November), the club announced they have received additional funding from MSD “to support the ongoing funding of the football club’s general business operations”.
The Birmingham Mail reported on Saturday (2 December) that this fresh cash boost is “expected to be borrowed with the same base interest rate as the original £20m loan”.
As per Albion’s last set of accounts, the interest on that four-year loan was around 14 per cent.
Digging a deeper hole
West Brom were already going to have to pay several million in interest on that initial loan from MSD Holdings.
It’s unclear how much extra funds have been secured from Michael Dell’s investment group but it’s safe to say it won’t be anywhere near the initial £20million.
That’s the good news but the bad news is that even though it may only be a small amount of extra debt being added to the club’s books, it’s still extra debt.
And when those loans are being secured against historic club assets like The Hawthorns, it means the stadium is becoming more and more at risk.
Albion need new owners who are willing to pay off the debt as soon as possible.
However, that also then comes with a risk because what kind of funds will they have available to spend after buying the Black Country club?
While the debt would be wiped out, there might be nothing else to add in and then we’re back at the same place we were a few years ago except with no parachute payments and worse prospects of winning promotion.
In other West Brom news, the doomsday clock doesn’t care for Albion’s Championship form as it ticks down towards a deadline.