During Peter Lim’s tenure at Valencia, since 2014, the entity has declared in its annual accounts an accumulated negative financial result of 35,748 million euros: “However, the financial income account includes 138,219 million with the following detail : 17,543 for financial updating and 120,676 for the effect of fair value,” says Valencia lawyer and shareholder Gaspar Romero to this newspaper. Likewise, the financial expense account includes a total of 73,716 million, composed of 52,500 for interest on amortized cost and 21,216 million for financial updating. “Understanding that these items do not correspond to treasury movement, I would like to know what they correspond to and the details of their calculation,” Romero claims before the Shareholders’ Meeting this morning, since in his opinion “this positive difference of 64,503 million would have “a significant impact on the income statement that would reflect a negative financial result of 100,251 million and not the 35,748 million that the annual accounts currently reflect.”
“Let us remember that Valencia has loans and policies granted by Caixabank, Rights & Media, without forgetting the promissory notes to pay the players’ salaries, and even the interest on the loan from the League or the loans from Meriton Holdings,” adds the lawyer. .
The model change from 2021
For this reason, before the General Shareholders’ Meeting is held this Thursday, Romero demands from the board of directors chaired by Layhoon Chan an explanation of how the financial result presented to the shareholders has been obtained. Delving into the club’s treasury needs, the analysis of the income statement, replacing the items that do not represent cash flow with those that do (amortization for player purchases, the profit from the sale of players for the amount of the sale, in addition of those mentioned regarding the financial result) would explain, in Romero’s opinion, “the change in management model since the 20-21 season”, in which the purchase of players has been reduced to the maximum, with a first team fed by youth players, and instead the sales figure has skyrocketed. The income statement shows, according to Romero, a major problem in generating sufficient treasury “to meet the club’s debt”, only attacked “by the contributions of members or the massive sale of footballers.”
“The insufficiency of the income statement means that external financing or own resources such as capital increases must be resorted to,” says Romero. In reference to these capital increases that have taken place during this period, the lawyer recalls that “the Board of Directors has proposed capital increases allowing the majority shareholder to resign and not offering the rest of the shareholders or third parties the possibility of subscribing to the surplus.” in successive rounds, despite the clear needs of the club.
A problem directly related to the great contingency that Valencia has been facing for three decades, such as the resumption of the Mestalla works. «Valencia does not have the capacity to finish the new stadium. And Lim is not going to finance or endorse the project. It is fully demonstrated in these accounts that Valencia does not have the capacity on its own to meet the debt,” Romero reminds this newspaper. «If it does not have the capacity in the current crisis situation, it will hardly be able to finish the new stadium. “It’s not just about obtaining the resources, it’s about being able to return them later,” he says.
2023-12-14 03:00:22
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