From BZ/dpa
Does Hertha BSC have to pay back 40 million euros to investors this year? Or will the investment be extended to 2025? This question, which is important for the second division club, will soon be answered.
On Sunday, Hertha BSC congratulated Ingo Schiller on his 58th birthday on Twitter and wished him “Allet Jute”. In the second division football team, however, there have long been voices that do not only speak positively about the work of the former finance director.
President Kay Bernstein did not mention Schiller by name, but in an interview with the newspaper “Der Tagesspiegel” at the weekend he recalled the origins of the difficult economic situation. “This is the result of the madness in 2019 and 2020, when you wanted to go upstairs very quickly in a short time.” You now have to dry the house from the basement, said Bernstein.
On Monday there is an important renovation date for the Berliners. Then the result of a survey is expected as to whether the bondholders agree to an extension of their 40 million euro investment. The repayment scheduled for the second half of the year would be postponed by two years to 2025, and Hertha would have some air in terms of cash flow. The price: 10.5 percent dividend for investors instead of the previous 6.5 percent. That sounds tempting for ordinary people who are plagued by interest rates and inflation.
Additional interest costs in the tens of millions
The willingness to expand on the part of Hertha creditors, most of whom come from the professional financial sector, was initially sluggish. This is one of the reasons why the club increased the Mage by two percent in the middle of the voting process.
Additional interest costs in the tens of millions are accepted for short-term relief. That’s what happens when at least the basement of the house is under water.
In an emergency, will 777 Partners step in as a guarantor?
It is certain that the deferred nature of the bond is an essential component of the license commitment by the German Football League. If it is omitted, there must be other guarantees. The DFL, Hertha and their major financier 777 Partners are silent on these.
The latter is likely to step in as a guarantor in some form, presumably on worse terms for Berliners than the 10.5 percent interest rate offer. This is one of the reasons why Hertha is almost humbly promoting it.
“We are delighted to have received the license for the coming season. Nevertheless, the extension of the bond is an essential building block to ensure the economic ability to act. We therefore continue to urge all bondholders to agree to the proposed adjustment of the bond conditions in their improved version by June 19, 2023,” said Hertha Managing Director Thomas Herrich.
President Bernstein, who will be in office for a year on June 26, does not want to make any sporting predictions about a quick return to the Bundesliga in view of the financial situation and the resulting squad uncertainties for coach Pal Dardai. He’s already making just one promise. “We don’t want to build castles in the air anymore and be bigger than we are.”