Everton have suffered another financial setback after potential investors MSP Sports Capital pulled out of their £150million deal.
The New York-based firm entered an exclusively agreement back in May to invest the nine-figure sum in convertible debt, which would later become a 25% stake in the Premier League club.
According to The Athletic, that proposal was blocked by another of the Toffees' existing lenders, Rights and Media Funding Limited, whose loan was extended to £200m earlier this year.
That debt is structured so that the holder can demand repayment before the borrower takes on any more, and they weren't happy with MSP's offer, believing it wasn't putting in enough cash for the equity they would be getting.
As a result, the exclusivity period is now over and the deal is dead in the water in a "huge hit" for the club. MSP are, however, still going to loan £100m to the subsidiary Everton owner Farhad Moshiri set up in 2017 for their new Bramley-Moore Dock stadium.
That will allow him to repay the £40m he borrowed short-term from English businessman Andy Bell, founder of AJ Bell, in May. It's not clear if he'll be able to access the rest of the funding required to complete the stadium, though.
It was initially planned that the remaining £260m would come from a five-year construction loan sourced by banks JP Morgan and MUFG. But that was contingent on the MSP deal going through.
Everton's issues off the pitch aren't helped by those on it, with Sean Dyche's side losing their opening two fixtures of the season and being heavily tipped for another struggling campaign near the bottom of the table.
|Sean Dyche hasn't been backed sufficiently in the transfer market (Image: Getty Images)|
Dyche has only been able to sign one player for a fee, 19-year-old striker Youssef Chermiti, who he says is not fit enough currently. Goodison chiefs are currently in talks with Southampton over a deal for Che Adams.
But the Saints want £5m of the £15m transfer to be paid up front, which is proving to be a stumbling block - summing how just how tricky the situation is on the blue side of Merseyside.
Moshiri, meanwhile, is now trying to find alternative options for investment, re-opening talks with Miami-based investment company 777 Partners amid the ongoing investigation by an independent panel into their possible breaches of the league’s spending rules.