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Kramerica Industries

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I can't speak with any kind of confidence or faux intelligence about the financial matters and shit - any of you guys with financial knowhow just send me some websites or shit in my PMs or something so that one day I can pretend to understand half of what you're discussing here - but as far as that Finnish guy goes, I'd take Zhang over someone with red Interpol notices.
 

.h.

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I can't speak with any kind of confidence or faux intelligence about the financial matters and shit - any of you guys with financial knowhow just send me some websites or shit in my PMs or something so that one day I can pretend to understand half of what you're discussing here - but as far as that Finnish guy goes, I'd take Zhang over someone with red Interpol notices.
Which bits are you not sure about?
 

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Which bits are you not sure about?

There's multiple but, just off the top of my head, whenever the topic of "converting into equity" pops up, my brain just goes blank. Monetary matters like that just don't click in my brain, I tried to read about it or watch explanation videos but I just never got a good financial education growing up (mostly my fault, my father was always big on stocks and options trading and stuff but teenage me would've found his habit of watching CNBC all day overwhelmingly boring, so I didn't take advantage of opportunities to ask and learn) so 30-year-old me reads the conversation over the last 4-5 pages and I'm not taking sides on who I think is right and who I think is wrong - there are concerns about a new owner coming in and gutting the club, obviously there are some things the Zhangs have been getting right in recent years that have helped the club be successful but there's also decisions they've made that I firmly opposed (the Super League fiasco in 2021 where we were gonna be among the "poors" of the league getting less revenue than fucking Tottenham is something I've never forgotten), arguments can be made on both sides here - but I guess I just get lost in the details at a certain point, not knowing which stuff to isolate and say "learn what [that] means" or whatever.

To be clear, I wasn't joking with my sidebar about PM'ing me or whatever (this is for anybody, not just you @.h.) because I'm not trying to derail the conversation with my own little crisis interjection here, lol.
 

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Nobody is asking why Pimco suddenly refused to pay Oaktree loan)
 

.h.

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There's multiple but, just off the top of my head, whenever the topic of "converting into equity" pops up, my brain just goes blank. Monetary matters like that just don't click in my brain, I tried to read about it or watch explanation videos but I just never got a good financial education growing up (mostly my fault, my father was always big on stocks and options trading and stuff but teenage me would've found his habit of watching CNBC all day overwhelmingly boring, so I didn't take advantage of opportunities to ask and learn) so 30-year-old me reads the conversation over the last 4-5 pages and I'm not taking sides on who I think is right and who I think is wrong - there are concerns about a new owner coming in and gutting the club, obviously there are some things the Zhangs have been getting right in recent years that have helped the club be successful but there's also decisions they've made that I firmly opposed (the Super League fiasco in 2021 where we were gonna be among the "poors" of the league getting less revenue than fucking Tottenham is something I've never forgotten), arguments can be made on both sides here - but I guess I just get lost in the details at a certain point, not knowing which stuff to isolate and say "learn what [that] means" or whatever.

To be clear, I wasn't joking with my sidebar about PM'ing me or whatever (this is for anybody, not just you @.h.) because I'm not trying to derail the conversation with my own little crisis interjection here, lol.
TBH, it probably doesnt hurt to explain to a few other people. If you want any more details after what I post here we can PM it

I'll start with the facts first of all:

1 - Inter isnt owned directly by Suning (infact, at all) or the Zhangs. It's owned by a company called Great Horizons. This isnt unusual, there's loads of good reasons to have a corporate structure. Great Horizons is owned (2/3 jumps) by Zhangs off the top of my head.
2 - Great Horizons borrowed money off Oaktree
3 - Great Horizons lends that money to Inter
4 - From an accounting perspective, you 'accrue' interest (EBITDA = earnings before INTEREST, taxes, debt, and amoritsation is a common way of helping to value companies).
5 - Inter only accrues interest on what Great Horizons lends Inter - the 275m Great Horizons borrowed from Oaktree is on *their* books, not Inter's books.
6 - Great Horizons can then lend money to Inter, at an interest rate. Infact, Oaktree loan was 12% interest, but Great Horizons lent money to Inter at 8, and 11%, so actually at a loss. (n.b. I didnt actually realise this until today, I'm not reading that entire fking shareholder report its like 200 pages)


Lets say GH lends Inter 50mil.

Inter's balance sheet now has a 50mil loan on it, with 50mil+interest to pay back.

Instead of taking cash back, you can choose to convert that debt into shares (e.g. equity). Basically, if your company is worth 1 billion, and you convert 50mil of debt, you're 'freeing' the company of 50mil in liabilities, and creating 50mil euros worth of shares that didnt exist before, so now the company is worth 1.05billion. This is a great idea if you think a company is going to increase in value. It's a neutral idea if a company doesn't change in value, and it's a bad idea if a company goes down in value.

For example, lets assume Inter is worth 1 billion, and it has 1 billion shares issued. The share valuation is 1 euro per share. If Great Horizons does debt to equity, that means we now have 1.05 billion shares issued, at a valuation of 1 euro per share. If we have 2 good years and our valuation is now 1.5 euros per share, that 50 mil that was converted has become 75mil, whereas if the debt had been repaid after 1 year at 8% interest rate, it would have only been 54 mil euros back to Great Horizons.


Zhangs have lent, and then converted to equity, like 500 mil (rough figure) over the last few years to Inter. It's the exact same as the 'owner cash injection' that everyone keeps begging for.



The key point about accrual on our books is that things like FFP are done by *Inter's* books, not Great Horizons - so the fewer debts Inter has to pay, the more compliant we are with FFP.



Does that kinda make sense? Its why its really important to understand that Oaktree debt is a Great Horizons problem, not Inter one.




The other major thing - Inter loses a fucking tonne of money. Probably 600-700mil since Suning bought the club. That's been our historic trend since Moratti so its not unusual, but under Zhang, these werent just 'normal operations' losses, this was active investment losses by, e.g., buying Barella, Lukaku, etc. They've probably given the club like a billion euros (between loans and sponsorship) since they bought the club, and all of our success is attributable to the financial support they've provided. They've also made mistakes, JM, Lazaro, Correa, a whole load of others, but overall they've had a massive positive impact on the club.

Yet most people just want more sugar daddying - and arent happy that there's at least attempts to vaguely balance the books.



Also, as with many companies, our accounts are published every year - you can find them on our website (e.g. the links I provided before). They make it VERY clear this club loses money just through our normal mode of operation, the 'Zhang' influence (e.g. the bonds, the loans, etc) hurt more ontop, but this club would not be in any really different picture. The problem is our squad costs more than it makes. Simple as that.




edit: one thing of course - EBITDA is a standard measure but it doesnt make a lot of sense for football because so much of it is in the A part of it (e.g. amortisation of players). BUT, EBI is useful because it gives you an idea of how much money the club could make if someone came in and wiped out our loans/debts (e.g. the bonds). I dont believe any of our accountancy periods have a positive EBI, which is a clear indicator that a new owner would still need to keep injecting cash. Only when the EBI is positive and actual earnings negative is that the "suning impact" that everyone seems to blame for all of our financials.
 
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Dave54

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Does that kinda make sense? Its why its really important to understand that Oaktree debt is a Great Horizons problem, not Inter one.


But, if Oaktree takes over the team, then we don't know what outcome would be for Inter. My educated guess is that Oaktree already has a buyer for Inter and Pimco was advised possibly to stay out of this for future favors from one fund to another. Illegal? 50/50)
 

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Does that kinda make sense? Its why its really important to understand that Oaktree debt is a Great Horizons problem, not Inter one.


But, if Oaktree takes over the team, then we don't know what outcome would be for Inter. My educated guess is that Oaktree already has the buyer for Inter and Pimco was advised possibly to stay out of this for future favors from one fund to another. Illegal? 50/50)
Yeah. My point was from a financial perspective, tbh. Everyone assumes the 12% interest is accruing on Inter's books on the 275mil. It isnt.

the other point is that owners will come and go, the team is (hopefully) eternal, if we lose Zhang and get someone else in, hopefully they're a sensible owner and sees that not disrupting the ship too much is the best short term course. Stay hands off, let Marotta run it, use your connections behind the scenes to improve the commercial fortunes for the club.

In terms of illegal.... not a clue tbh. PIMCO have 2 trillion assets under management, Oaktree 172billion. I doubt they're going to be doing favours for a small competitor - but these are small circles so you never know. We'd have been negotiating, likely, with some reasonably senior people, they arent going to waste that time from their day for some bullshit smokescreen tbh, and it costs hundreds of thousands to do due diligence.
 

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What a way to have Inter-Lazio game and trophy presentation tomorrow)
 

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Genuinely hate this guy.
This is what I don't understand. Why the hate?

Forza Zilliacus!

With him, we would at least know he'd just continue with Marotta (and Inzaghi) and the sporting side would continue the same way.
 

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"Inter President Steven Zhang claimed in a statement today that Oaktree have issued legal threats to obstruct the negotiations"
How Oaktree can stop Zhang to take loan (if possible) from somebody else and pay Oaktree?
 

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People here don't want sugar daddy, they want owners that can inject money to the club without loans. Thats all.
 

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Who knows

Dont forget, they dont have to have a case to issue legal threats, they just need to cause problems. Even dismissing a case means it needs to get infront of a judge to decide there are no merits (for example)

People here don't want sugar daddy, they want owners that can inject money to the club without loans. Thats all.
pls define the difference

cuz... at face value.. seems kinda the same thing
 

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Yeah, define sugar daddy if it's not "inject money to the club".
 

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To me that's the very definition of sugar daddy. In terms of football club ownerships. :D
 
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.h.

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To me that's the very definition of sugar daddy. In terms of football club ownerships. :D
itd explain why everyone argues with me so much

"We dont want a sugar daddy, I just want someone with deep pockets who can keep injecting cash into the club"
 

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Then please define it. What is a sugar daddy and how is it different from someone "inject money to the club"
it matters? After all, you will in any case take the most trivial thing in the things I write and ignore everything that is not comfortable for you, just like you ignore the fact that our owners have not invested a penny in the club for 3 years and they live from loan to loan.
 
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