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Aston Villa’s group accounts
for the year ended 31 May, 2019 show a loss of £68.9m.
However, the loss is
attributed to exceptional promotion-related costs of £45.8m including a one-off
£30m contingent payment to former owner Randolph D Lerner.
The club’s ultimate parent
company, NSWE SCS, wholly owned by Wes Edens and Nassef Sawiris, introduced
£30m by way of a capital injection to enable the club to settle the liability
when former owner Recon Group Limited defaulted on the payment.
The payment was made in accordance
with the provisions of the purchase agreement of May 2016 between Recon Group
Limited (Buyer), Randolph Lerner / Alfred Lerner Declaration of Trust (together
the Sellers) and Zhejiang Ruikang Investment Co. Limited and Jian Tong Xia
(together the Guarantors).
The terms of the agreement
stipulated that if Recon Group Limited and the Guarantors failed to pay the
£30m bonus due to the Sellers on Aston Villa’s promotion back to the Premier
League, the club would be liable for the payment.
On June 6, 2019, Recon Group
Limited (Hong Kong) confirmed default on the payment. The liability was settled
through payment on July 12, 2019. As a result, the club made provision for a
£30m liability in the 2018/19 year-end accounts.
During the year the
ownership group introduced £105.7m into the club all of which was in the form
of capital injections which resulted in Aston Villa remaining debt free.
The club also confirmed that
in the 3-year period ending May 31, 2019, the club complied with the EFL’s
Profitability & Sustainability Rules. After promotion, the Premier League
reviewed and confirmed compliance in accordance with their own policies and
procedures.
Turnover in the financial
year was £54.3m, a fall of £14.3m compared to the year ended 31 May, 2018. This
was primarily due to a reduction in Premier League parachute payments in the
third successive season the club competed in The EFL Championship.
Credit: fcbusiness.co.uk
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