Further details emerge on Sunderland's new debt and accompanying charges after £8.2m overdraft cleared
Sunderland recently confirmed that they had ‘secured a capital working facility’
Further details have emerged regarding the 'working capital facility' being used by Sunderland's ownership group.
A club statement accompanying the release of the most recent accounts, covering the 2023/24 campaign, confirmed that the club had secured finance from an external lender to clear an £8.2million banking overdraft facility. That charge has now been filed at Companies House, and is publicly available to view.
While the financial details of the loan are redacted, they confirm that the lender is Akira B.V. Akira B.V is linked to the holding company of the Louis Dreyfus Company, and the majority shareholder is Margarita Louis-Dreyfus. As a result of the transaction, Akira B.V now holds a charge over the club’s Academy of Light facility and associated land near the training base.
While the lender clearly has very close ties to the ownership group, the shift to external lending marks a shift in approach. Shortly after Louis-Dreyfus's arrival at the club, external debts to the FPP group were cleared. The new credit facility will likely incur interest costs. The loan would also impact any potential future sale of the club, though this might not be seen as a significant hurdle given the clearly close relationship between the two parties.
While the club's debt has steadily grown during the tenure of Kyril Louis-Dreyfus and Juan Sartori, this has previously been internal debt to their holding company, Mercator. This does not incur any interest costs to the club. As of the most recent accounts, that debt had grown to £19,820,000. The ownership group have consistently stated their intention to convert this into equity, though this at this stage has not yet occurred.
The club's statement last month confirming their decision to secure a new credit facility said: "SAFC’s banking overdraft facility, which stood at £8.2 million on 31 July 2024, has subsequently been cleared by the club after securing a working capital facility from an entity associated with the Louis-Dreyfus family."
Our verdict on Sunderland's most recent accounts
Our writer Phil Smith delivered his verdict on Sunderland's most recent accounts in a piece last month, which you can read in full here. The club confirmed an operating loss £8.1 million for the period in question, down slightly from a loss of £9 million from their first campaign back at Championship level.
The drop in the club's financial losses were driven by a rise in turnover and a significant rise in profit made from player trading, primarily through the sale of Ross Stewart to Southampton. Those financial gains were offset by rising costs, with the club's wage bill continuing to grow as Sunderland plot their way back to the Premier League. The club also parted company with two head coaches, Tony Mowbray and Michael Beale, over the course of the campaign. The club's board also oversaw a significant summer of investment to make necessary improvements to the Stadium of Light, which in part explains the rising costs.
"No detail has at yet been provided [of the debt] and this might be of a concern moving forward as if Sunderland were to take on any more external debt that required servicing, there is a long-term danger that investment on the pitch could be squeezed," Phil wrote.
"Not withstanding some of the concerns mentioned above, there is no doubt that these accounts a club on the up after its dramatic demise. There is, albeit not yet realised, a clear path to sustainability and its financial footing is far firmer than many of its divisional rivals. Equally clear is that to reach its potential off the pitch, the club needs to win promotion to the Premier League in the coming years."
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