Burnley seek new bank loan after relegation


Burnley are seeking a new bank loan following their relegation on Sunday.

the Burnleys-owners-seek-loans-help-club-cope-crippling-debt-relegation.html” target=”_blank”>Daily Mail says Burnley recently rejected a loan offered at a relatively modest interest rate of six per cent as they were confident they would stay put. They will now review the loan markets and attempt to refinance the terms of a previous loan from MSD Capital.

Burnley’s first seven-year relegation will immediately cost them £55million in TV revenue, and the club will face further financial penalties due to the nature of their high-leverage takeover by ALK Capital he 18 months ago.

Relegation will trigger an early repayment clause in a £65million loan from MSD which has so far been repaid on interest only – a payment which will represent the full £42million they will get during their first year in the championship. .

As well as the MSD loan, ALK Capital also borrowed £37million from the club’s bank account to help fund their takeover. Meanwhile, in February, Burnley took out a £12.5m bridging loan from Australian bank Macquarie pending the second installment of the £25m fee for Chris Wood’s transfer to Newcastle.

Burnley’s options for further borrowing appear limited, not least because the MSD loan is secured by the club’s existing assets such as future parachute payments and Turf Moor.

As a result, ALK may be forced to use the assets of its US media and technology companies to secure another loan. ALK have sought to bring in additional investment with little success since taking over Burnley in December 2020 but will now step up their efforts.

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