Latest Nottingham Forest news, as the Reds owner has converted debt to equity in recent years.
Following a succession of debt-to-equity conversions by owner Evangelos Marinakis, Nottingham Forest now has around 12.2 billion shares outstanding.
The Forest owner has taken many attempts in recent years to convert owner cash into equity in the club via penny shares, the most recent being the conversion of £11 million in loans to shares in December last year.
Prior to that, the Forest owner converted £41 million in debt to equity during the 2021/22 fiscal year, following £12 million and £20 million conversions in the previous two years.
As a result of Marinakis’ recent moves, which have proven to be a sign of long-term commitment to Forest while reducing the financial burden on the football club, the number of shares in issue now exceeds 12.2 billion, according to a confirmation statement filed with Companies House on July 5.
Converting owner debt into equity is not a new phenomena in football, and it is typically prompted by wealthy and generous owners seeking to enhance the balance sheet by reducing a portion of the debt burden and any interest paid on director loans.
In recent years, in addition to Marinakis’ multiple moves to convert some £83 million in debt into equity, other owners such as the King Power owners at Leicester City and Farhad Moshiri at Everton have made similar moves, as have Manchester City owner Sheikh Mansour and former Chelsea owner Roman Abramovich in the past.
The conversion of debt to equity does not address any difficulties with profit and sustainability laws, but it does allow owners to avoid adding to the football club’s financial burden in the face of significant losses.
