Shareholder fears over new West Brom loan
Albion minority shareholders claim they have been left frustrated and in the dark after being informed the club will take a significant loan from a private equity firm.
Shareholders, who collectively own 12 per cent of the club, have been written to by WBA Group – the club’s parent company – about the intention to borrow an unknown sum from MSD Holdings.
The loan, which has previously been reported as in the region of £15million to £25million, is said to be required to assist and fund general workings of the club and working capital purposes of WBA Group and its subsidiaries, according to the document dated this Tuesday seen by the Express & Star.
News of the latest loan has been met with concern among the Albion fanbase, with yet more financial uncertainty circling the club – amid fears over the looming deadline of a separate loan from controlling shareholder Guochuan Lai, due December 31.
One shareholder told the Express & Star: “How can shareholders possibly vote if there is insufficient detail on the supposed loan?
“How can we exercise our right to vote if we don’t know the details – for example how big the loan is?” The letter read: “The proceeds of the loan will only be used for the general corporate and/or working capital purposes of the group and its subsidiaries in connection with the operation of the club, together with any fees, commissions, costs or expenses associated therewith.”
It added each minor shareholder of the group reserves the right to vote on the resolution – but continued: “However, the resolution will be passed and the articles will be adopted with immediate effect once the resolution has been passed by group’s majority shareholder WBAFC Holdings Ltd.”
The shareholder explained frustration at a ‘total lack of transparency’ and that the above terminology ‘ignores the rights of minority shareholders, in merely stating the resolution will be passed with immediate effect’.
American firm MSD Holdings have been a prominent cash lender for English clubs in recent years, including Southampton, Burnley, Derby and Sunderland.
They added: “We are also anxiously awaiting news that the Wisdom Smart loan will be repaid by the upcoming deadline.”
There are barely a couple of banking days remaining for Lai’s £4.95m loan from March 2021 to be repaid in time.
