West Bromwich Albion: Baggies chairman Guochuan Lai 'guarantees' to repay £5m debt
- Published
Albion stand ninth in the Championship going into Saturday's home game with promotion rivals Millwall
West Bromwich Albion say that Baggies chairman Guochuan Lai still intends to return his £5m debt to the club.
In their 2021-22 season accounts, Albion made reference to the initial £4.95m loan made to Lai's company Wisdom Smart Corporation Limited during the coronavirus pandemic.
Albion's full statement referred to it having been 'impaired' in the accounts at group level by auditors.
But there is also a 'guarantee' of payment from Lai's holdings company.
A loan is considered to be 'impaired' when it is probable that not all of the related principal and interest payments will be collected.
That led to speculation from football finance expert Kieran Maguire, who said on Twitter: "West Bromwich Albion accounts show the loan due from owner Lai is not expected to be received and so write it down to zero".
But the Baggies statement makes it clear that the full £4.95m loan is under a 'guarantee' to be repaid, along with the so far £59,000 accrued interest.
The statement said: "An outstanding loan of £4,950,000, owed during the accounting period by Wisdom Smart Corporation Limited, has been impaired in the accounts at group level by auditors.
"West Bromwich Albion Holdings Limited - a wholly owned subsidiary of Yunyi Guokai (Shanghai) Sports Development Limited - has since committed to guarantee repayment of the loan and accrued interest."
Guochuan Lai took over from Jeremy Peace as West Bromwich Albion owner in 2016
The loan was first listed in Albion's accounts up to June 2021 and was due to be repaid in September - but Lai missed that deadline and then another extended one in December.
Albion took out a £20m loan from US investment group MSD Holdings to finance the club's "general business operations" in December - but they made only two January signings.
Baggies fans, spearheaded by supporters group Action For Albion, have made regular controlled protests at the way the club has been run throughout the season.
The club is now also under the radar of the government after a joint letter was sent to the Department for Digital, Culture, Media & Sports by West Midlands mayor Andy Street and West Bromwich MP Nicola Richards sharing their concerns.
Albion's annual accounts - in brief
Albion recorded a pre-tax profit of £5.4m, an improvement of £0.1m for the 2020-21 season, their Premier League relegation season.
Turnover decreased from £106.9m to £65.4m, owing to the reduction in Premier League distributions and sponsorship income.
But staff costs also decreased from £76.9m to £42.4m, as players and staff suffered a drop in salaries following relegation - and Albion were also well in credit on transfer fees.
'Fees paid for the purchase of player registrations' fell from £30.5m to £12.6m - and, largely thanks to the sale of Matheus Pereira to Al Hilal for an undisclosed eight-figure fee, transfer income rose from £9.7m to £17.8m.
Albion stand ninth in the Championship, still with a great chance of making the play-offs, thanks to an overall improvement since Carlos Corberan became head coach in October.
Corberan's side are five points shy of the play-off zone with a game in hand, as the season resumes following the latest international break with a home game this Saturday against Gary Rowett's fellow promotion-chasers Millwall.