Finance expert explains if Shilen Patel could issue new West Brom shares
Finance expert Dan Plumley says there is no reason in theory why Shilen Patel couldn’t issue new shares in West Brom.
The Baggies have reportedly been placed under an EFL-imposed business plan with them currently on course to breach PSR, Sky Sports reporter Rob Dorsett said this month.
As part of that, Dorsett said the Baggies have to agree transfer and wage costs with the body, but that there is no fear of bills going unpaid under the Patel regime.
Plumley was asked by West Brom News whether Patel might think about creating more shares to inject more capital into the club.
The finance expert said it is something that could be done but there would be caution about doing so and where the money would be best spent would be factored into that.
He said: “No, there isn’t but the caveat to that is what is that money going to be used for and that’s where the cautiousness kind of comes into it.
“One factor to take into consideration with that is the current situation with the EFL, if they’re being looked at and their business plan is being looked at and they might be pushing the boundaries of PSR then it’s unlikely they will be active in the transfer market spending loads of money on players.
“But it’s also a case of if you’re going to inject new money what else could it be used for that’s not cash for transfers?
“And cash injections are fine whether you convert them to equity, or whether you cover some debt with that, whether you invest in infrastructure or the academy or anything like that, there’s all those things in there as well which are absolutely fine in the context of PSR.
“The short answer is there’s nothing stopping an injection of capital at any point but you’ve also got to consider what that’s being used for in the context of the club finances and the regulatory framework in that league as well.”
West Brom working hard to comply with PSR
The news that the Baggies are having to work within EFL parameters as they try to comply with PSR was obviously an unwanted distraction.
But it shouldn’t detract from the fact that there is much more positivity and reason for optimism under the leadership of Patel, who has been a very hands-on owner already.
The club is certainly making the right noises about doing what it can to comply with PSR rules and hopefully in time the balance sheets, as it pertains to PSR, will get back on an even keel.
In the meantime, the club will be looking to focus on matters on the pitch, with Tuesday’s loss to Fleetwood Town in the EFL Cup hopefully a minor blip after a fine win at QPR last Saturday marked the ideal way to start the Baggies’ Championship campaign.
In other West Brom news, Don Goodman shares what worried him about the win over QPR.
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