Burnley

Burnley face £65m loan repayment if relegated?

By Matthew Tranter, Reporter | 05 May 2022

Burnley will be required to repay a £65m loan earlier than expected should the club be relegated from the Premier League, according to a report.

The Clarets were taken over by ALK Capital in December 2020, a United States investment firm, who purchased the club through a leveraged buyout in a £170m deal.

Effectively, the new owners used the Premier League side's own money to fund the deal via a substantial loan taken out from MSD Holdings.

With the club's accounts for the year to 30 June 2021 published on Wednesday evening, it has been revealed that the size of the loan taken out was £65m.

However, as reported by The Athletic, the repayments are currently on an interest-only basis until December 2025, although this is only the case if Burnley retain their Premier League status until then.

The report outlines how the repayment schedule of the loan will be brought forward should the club be relegated to the Championship before 2026, with a clause inserted by MSD meaning that a significant repayment of the loan can be demanded in the event of relegation.

Should Burnley also fail to return to the top flight at the first attempt were they relegated, another substantial amount would need to be repaid to MSD again.

The Lancashire side currently sit 16th in the Premier League and two points above Everton in the drop zone, thanks to caretaker manager Mike Jackson picking up 10 points from his four games in temporary charge.