PSumbler said:
Isn't that just registration of the loans? Not a companies house expert by any means but that is how it reads to me.
Someone like Lisa will have a much better understanding
It’s just an agreement to repay, after 5 years, the amount loaned to the club by Swansea Football (the owners) if the convertible debt hasn’t by that point been converted into shares.
If a person or entity makes a loan, there’s an agreement to repay it. If it’s a convertible loan, it can be converted in to equity or it needs to be repaid.
It was widely reported that an amount had been loaned to the club by Silverstein, and an additional amount loaned to the club by the majority owners to match the Silverstein loan. In both cases the loans are convertible (they can be swapped for equity at a valuation established at the point the loan was made). If that doesn’t happen within, in this case, 5 years, the loans need to be repaid.
The club (as with every company) needs to file all charges at companies house (that, in practical terms, means anything that has a call on future cash flows or income). It is done so that anyone reading the accounts knows if any of the money in the future is already ‘spoken for’. Without registering this information a reader could imagine, for example, that if the club sold a player in the future, they’d have money available to spend. This just points out that any money available in the future is only after these loans have been repaid, unless there’s been a conversion.
In short, nothing to see here that was not already known, and certainly not what is being suggested by the original tweet.
