London Stadium owner’s E20 Stadium LLP have revealed that West Ham have paid a second payment in regards to the Share Premium (windfall tax) in addition to the £2.6m paid in August last year
E20 Stadium Group accounts published this week reveal West Ham paid £2,588,223 on 1 August 2022 and paid a second undisclosed as yet payment on 7 March 2023
The 2013 Concessionaire Agreement sets out the Share Premium payment after a part purchase of the club and Daniel Kretinsky’s 27% shareholding transaction certainly does qualify.
Kretinksy paid £168.75m for 27% of the West Ham holding company which values the Hammers at £625m on 11th November 2021, requiring the club to pay the Share Premium amount within 30 days.
Under the agreement, worked examples are given created by Rothschild under project Viper
Share Premium Amount – General Threshold LLDC share
All amounts are multiples of one million.
Share of £125m-£150m 125 7.5%
Share of £150m~£200m 150 10.0%
Share of £200m-£300m (first 5 years) 200 20%
Share of £200m-£300m (last 5 years) 200 12.5%
Share of above £300m (first 5 years) 300 30%
Share of above £300m (last 5 years) 300 20%
The complexity of working out the qualifying transaction amount is the difficult element to work out.
Although the transaction valued West Ham at £625m you are permitted subtract shareholder loans, bank loans, interest rates, net debt and other investments such as rights issues.
West Ham had shareholder loans of £44m from Gold and Sullivan and £9.5m from Tripp Smith together with £3.7m of deferred interest bringing total to £56.2m
West ham shareholders invested £30m of cash in a tights issue before the Daniel Kretinsky investment which should also qualify.
On bank loans West Ham borrowed £55m of a £120m credit facility from MSD holdings in the accounts published before the transaction.
Net debt stood at £89m at the end of the season before the transaction and is also a factor.