The takeover of West Bromwich Albion by Florida-based businessman Shilen Patel is a step closer after the Championship club’s current owner Guochuan Lai agreed a deal to repay a loan he secured on shares in West Brom’s parent company.
Lai borrowed £2million from a company controlled by local entrepreneur Alex Hearn in 2021. Repayment was scheduled for last week but the Chinese businessman failed to settle the debt, which meant Hearn was entitled to claim at least 2.35 per cent of West Bromwich Albion Holdings.
The outstanding amount had already grown to more than £4million and a default interest rate had just kicked in, which had the potential to see the debt grow quickly, potentially giving Hearn the right to claim a larger stake in the club.
As a result, he had been in talks about joining Cheshire-based lawyer Chris Farnell’s bid for the club as a minority partner. However, with the Patel bid now in the lead, Hearn has decided to let Lai repay him in three instalments over the next 18 months. The timing of these instalments would be linked to the payments Patel would make to Lai for control of West Brom. Hearn has also agreed to accept a smaller sum and waived the default interest rate.
This clears one of the hurdles in Patel’s way and makes Farnell’s path to control more difficult.A third bidder, Armenian investor Roman Gevorkyan, remains in the background but is believed to be looking at other opportunities in English football now.
The need for a change of ownership at The Hawthorns is urgent, as West Brom’s debts are close to £40million and the club are expected to post another big loss when their accounts are published at the end of March or early April.
The last set of accounts contained a note from the auditors that there was a “material uncertainty” about the club’s status as a going certain. Nothing has changed since then to lift that uncertainty, with the club’s financial position worsening.
Patel, however, has the support of the club’s senior management and West Brom’s main creditor, MSD Partners, the investment firm linked to American IT billionaire Michael Dell.
A minority shareholder at Italian side Bologna, Patel runs the family office set up by his father Dr Kiran Patel, a serial entrepreneur and cardiologist who was born in Zambia but made his fortune in Florida. The Patel family claim to have $2billion in assets under management.
Lai used to make claims of enormous wealth, too, but it has been conspicuous by its absence since paying former owner Jeremy Peace almost £200million for the club in 2016.
A founding member of the Football League, West Brom have been English champions once and won five FA Cups. They have spent the majority of their 146-year history in the top flight but have yo-yoed between the Premier League and Championship several times in the last 20 years. They are currently fifth in the Championship.
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