'Been talking to' - Kieran Maguire makes fresh Everton administration claim as takeover wait continues

Everton are not on the brink of administration despite reportedly looking at ways they can restructure the club’s debt. That is the verdict of football finance expert Kieran Maguire, speaking on podcast The Price of Football.

Discussion have cast doubt over 777 Partners’ prospective takeover of the Toffees. The Miami-based firm agreed to purchase majority owner Farhad Moshiri’s 94.1% stake more than seven months ago but it is still to be ratified by the Premier League.

777 have loaned Everton circa £200 million to help with running costs as the club continues to fund its new stadium at Bramley-Moore Dock. However, 777’s Australian airline Bonza entered voluntary administration earlier this week, placing more uncertainty over whether they will complete a purchase of the Blues.

With debt restructurers now said to be advising the club, there are fears that cash flow will run out and Everton may have to enter administration. But Maguire, a lecturer at the University of Liverpool, insists that is now the case.

Maguire said: “Everton are reportedly - my knowledge of journalists is they always double check from independent sources - is that they have called in some restricting and insolvency advisors.

“Earlier in the day, we had heard stories about our favourite Australian airline Bonza having to suspend all flights because something hadn't been paid. That didn't look good because you'd expect 777 to provide funding.

“Does this mean administration? No it doesn't. The whole point about calling in restructuring advisors is that they're going in to try to avoid administration. I know from personal experience, sometimes you do and sometimes you don't.

“I've been talking to a series of journalists over the course of the day and certainly the noises that coming from Merseyside are that the wages were paid this month, we're up to payments with HMRC, payments to Laing O'Rourke who are contractors for the [new] stadium. Yes, 777 are providing working capital to fund all that and that's why these extra £15-20 million coming in - we don't think things are as bad as being painted.

“If that was the case then I'd say fine but why are you asking for a firm of restructuring advisors to come in? What they do is focus on cash, look at the cash expected to receive, Everton will be getting a payment in June that tends to be quite big in terms of next year's TV money. Do they have any outstanding bills before then? Looking at the payroll costs because there are no more matches in effect and doing some sums. They will be advising the board because what you don't want to be doing is to be entering a period of wrongful or fraudulent trading - this is where a company or board of directors enters into a contract knowing they can't pay them.

“Everyone is protecting their own interest, What happens if there is a worst-case scenario? It tends to be, and we saw this with Derby County, that Quantuma went in, did an investigation and then were appointed administrators. That would be the process and that is worst-case scenario, I must stress this. A lot of people are jumping the gun. If Everton have paid those major payments in terms of instalments of the stadium due this month and payroll, that is a positive. Do they have the money to do that for the end of May? That is a separate discussion.

“Could we have 777 as owners by the end of May? It could be the Premier League will have signed them off and we’ve heard nothing from the Premier League in regards to the potential approval. There is a lot taking place. I went into the Premier League handbook and it said in the event of insolvency, you get a nine-point deduction.

“You and I [host Kevin Hunter] would remember a couple of clubs in the Championship who would work out when they are mathematically safe and knew they’d get a 12-point deduction and then go into administration, do a pre-pack, right off the debts and things started to get a bit manipulative. I don’t think that would be the case here at Everton. Could the Premier League say if you are safe, we’re going to delay the points deduction? Without going through the small print, you can’t give an analysis.”