More concerns about Everton takeover

Josh Wander, the co-founder of 777 Partners, was at Goodison Park on Monday to watch Everton’s match against Crystal Palace as more concerns emerged over the proposed takeover of the club by the American investment company.

777 Re, the Bermuda-based reinsurance arm of the company, has had its credit rating downgraded for the second time in three months. It comes after The Times revealed last week that the Premier League had asked 777 to provide further information on how it intends to fund Everton for the next three years should its takeover proceed.

Sources close to 777 insist that the action by the respected credit ratings agency AM Best has no effect on the company’s footballing operations, nor the takeover of Everton. The takeover is still being scrutinised by the Premier League nearly six months after it was launched, which appears to suggest the league has some serious misgivings.

As well as Wander, 777’s sporting director Johannes Spors, chief of staff Dan Faermark and technical director Marcel Klos were also at Goodison Park. The company has been providing working capital monthly to Everton, with the present running total at about £150 million, and some of that money is being used to fund the stadium project at Bramley-Moore Dock.

AM Best downgraded 777 Re’s “financial strength rating” from B (fair) to C-minus (weak), and assessed its “balance sheet strength” as “very weak”. It said that was due to the firm’s “significant exposure to less liquid affiliated investments” — affiliated investments in other parts of the 777 group that are not performing well — and some weakness in its risk management.

“The company is working with the Bermuda Monetary Authority to reduce its exposure to affiliated assets,” AM Best said in a statement.

Paul Quinn, who writes a financial blog on Everton called theesk.org said the credit rating downgrade “causes further concerns” about the takeover, adding: “It is impossible for me to see how the Premier League can give approval.”

The Premier League requested further information on Thursday from the Miami-based firm, which agreed to buy the Everton owner Farhad Moshiri’s 94 per cent stake in September, about the source of funding and the company’s ability to fund the club on a three-year basis.

A 777 source said the company felt it had previously provided the information but intended to do so again. There is frustration at 777 at the length of time the process is taking and even if the Premier League eventually offers its approval, the decision would still need to be ratified by an independent oversight panel.

Should the takeover not proceed, 777 would fall behind existing creditors, Rights and Media Funding and MSP Sports Capital, in retrieving money it has loaned to the club.

Everton are understandably concerned about the time the appeal against their points deduction ts taking with the possibility of a further deduction.

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The Political Economy of Football V2

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