The club's CEO Oliver Mintzlaff spoke to the press on Sunday regarding the public financial report for the 2018/19 season. From the report, it emerged that on 1 May 2019, Red Bull GmbH (RasenBallsport Leipzig GmbH's majority shareholder) appropriated loan repayment sums of 100 million Euro into RasenBallsport Leipzig GmbH's capital reserve, thereby completing a debt equity swap.
We have outlined the quotes regarding this situation:
OLIVER MINTZLAFF ON…
...THE REASON BEHIND THE DEBT EQUITY SWAP:
- "The swap was decided on and completed in April 2019 in order to increase equity, thereby continuing to strengthen the club and in order to keep developing, both domestically and, perspectively, internationally.
...A POTENTIAL DEBT OVERLOAD:
- "A debt overload was not and would not have been a threat at any point. Since RB Leipzig's foundation, profits have been generated every year. Now we want to make the club capable of acting with regard to our aims in the coming years and make the club stable. Amidst the ongoing challenges that football faces due to the corona crisis, our decision has proven itself, much sooner than expected, to be the right one."
...BORROWING THE EQUITY CAPITAL:
- "We want to create an economically sound base for our club, sustained by as wide an income range as possible. Payment liabilities play a minor role, especially with the domestic and international associations having set frameworks, to be complied with equally by all clubs. A step which we very-much appreciate, incidentally."
...THE APROPRIATION FOR THE DEBT EQUITY SWAP:
- "In the past, interest payments from RB Leipzig to Red Bull have always been made in full. Eventually, however, the shareholder will obviously ask themselves whether it makes more sense economically to maintain long-term loan repayments, or to further strengthen the club. In this regard, we as a club, together with Red Bull, opted for the latter."
...HIS STATEMENTS IN JANUARY REGARDING RB LEIPZIG'S COMPLETE CREDIT REPAYMENTS TO RED BULL IN CONTRAST TO THE DECISION TO WAIVE DEBT:
- "We have always been transparent in relation to our liabilities and we have always told the truth. This incident therefore should be looked at financially and approach should be judged accordingly. Obviously we will repay the loans and, where necessary, the capital reserve to Red Bull. Red Bull and RB Leipzig carrying out the debt equity swap is normal, standard procedure. Red Bull are not giving us a single cent in doing so, which means we don't have any more money in our account. Red Bull is also losing nothing to RB Leipzig."
...ON REPAYING THE 100 MILLION EURO TO MAJORITY SHAREHOLDER RED BULL:
- "We have not been gifted this money, because in football, including RB Leipzig, as is the case in other industries, nothing gets given to you on a plate. This is therefore, first and foremost an entrepeneurial decision made by Red Bull. However, there are a number of different reasons, for example, transfer payments without a market-based countervalue will not even be considered by the associations in line with licensing. Furthermore, a "donation" from a company would have entirely different tax-related implications. Everyone who is familiar with this undoubtedly complex subject cannot see anything unusual or outlandish about the procedure. Rather, they see a procedure typical within the market."