Most of the debt being written off is “internal” debt

I.e. loaned by one ME company to another.

In my opinion

The company that loans the money can reduce their corporation tax as it reduces their profits as well as gain income on the interest charged to the loanee.

The loanee is able to increase its losses by the amount it actually pays as interest and get a tax credit should it ever make a profit.

From the attached it appears ME bought for an outlay of 12m in 2008 and sold for 40m twelve years later but is “writing off the debt” There will have been actual cash paid in to the club over that period but he has probably made a profit overall.

With Financial fair play restrictions kicking in for league one clubs next year and not wanting the books scrutinised too closely ME is getting out and wiping away an imaginary debt whilst holding on for a return should the yank takeover work.

Much is made of the Pension fund involvement - they too will be looking for interest on their investment and will not be throwing money at the club.

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We should be grateful our majority shareholders demand to know how much extra cash is being invested in the club before starting discussions!

Would appreciate if we have any accountants/auditors/bankers on here who can agree or disagree with this - I’m just an amateur trying to work out what’s in it for ME as businessmen don’t do things without an edge.

Posted By: biffbro on April 8th 2021 at 11:30:24

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