Morris writing off £100m Derby loans
DERBY COUNTY’S administrators have already received ‘seven or eight credible expressions of interest’ in buying the crisis-struck Championship club and they are likely to receive a formal ‘teaser document’ with the terms of sale by the end of the week.
Some potential bidders are UK-based, while there is ‘substantial’ interest from the USA and at least one bidder from continental Europe and Asia.
‘The likely timetable is interested parties will be contacted next week with the teaser document,’ administrator Andrew Hosking of restructuring firm Quantuma told the Mail on Sunday.
Prospective owners will then need to sign nondisclosure agreements and provide proof of funding of ‘at least several million pounds’ ahead of more substantive talks.
Derby owner Mel Morris has spent years — and about a quarter of a billion pounds — trying to get the club promoted. But he and his board decided, reluctantly, that administration was the only way to clear the decks to allow new custodians in. The club lie bottom of the Championship on minus two points after being deducted 12 points by the EFL for entering administration. A further nine-point penalty for breaking EFL financial fair play rules is likely, and thus so is relegation at the end of this season.
But beyond that, from next season, debt-free and with a clean slate at the EFL, a new investor can potentially reboot the club.
The MoS understands that Quantuma are still assessing the full extent of Derby’s financial woes but there is enough money in the bank to underwrite a ‘cash flow plan’ for 100 days. Or in other words, there is three months panic-free leeway, and beyond that the January transfer window would be open if player sales are required for further funding.
Sources with knowledge of the situation say the headline debts are both much worse than reported to date (closer to £200m than £60m), but simultaneously less worrying, because well in excess of £100m is owed to Morris in soft loans, and he will not be seeking a penny.
The extent of this soft loan debt is not public because the club have not published any accounts since the end of the 2017-18 season.
Derby’s largest other creditor is HMRC (£28m), then MSD Capital (nearly £19m, but that is separately guaranteed against Morris’s personal assets), while secured football creditors (mainly Arsenal and former manager Philip Cocu) are owed around £6.5m, and unsecured creditors (suppliers, contractors etc) are owed £8m-£12m collectively. One legal expert said the taxman would inevitably get more through a sale that keeps the club alive than a liquidation.