Royal AM's Financial Turmoil: Prospective Buyers Face Substantial Debts
- The new owners must take on an estimated R65 million in debt, covering unpaid wages, legal claims, and operational costs
- Royal AM remains under a FIFA-imposed transfer ban due to outstanding payments to former player Samir Nurkovic
- Bidding for the club opens next Friday, with a R1 million deposit required, the winning bidder will be announced by March 17, subject to PSL approval
Royal AM Football Club is currently embroiled in significant financial distress, with new owners expected to shoulder considerable debts.
Financial experts estimate that managing the club could require up to R65 million in the initial month post-acquisition.
Source: Facebook
Bidding Process and Debt Inheritance
The South African Revenue Service (SARS) has initiated the sale of the KwaZulu-Natal-based club to recover outstanding tax debts reportedly amounting to R40 million owed by owner Shauwn "MaMkhize" Mkhize.
PAY ATTENTION: stay informed and follow us on Google News!
Bidding opens next Friday, requiring a R1 million deposit from interested parties, with the successful bidder to be announced by March 17.
According to the draft sale agreement, purchasers must assume all existing debts of Royal AM.
Financial Expert's Analysis
Financial analyst Nqobile Ndlovu from Cash and Sport suggests that the club's actual value could be around R30 million, considering its liabilities.
He notes that Royal AM owes former player Samir Nurković R15 million, alongside other operational expenses such as salaries, travel, and accommodation, potentially inflating the debt by an additional R45 million to R50 million.
Consequently, new owners might need at least R65 million to operate the club in the first month.
Outstanding Fixtures and Operational Challenges
Royal AM has not participated in any matches since December 29, 2024, leading to a backlog of nine games.
The draft sale agreement mandates that new owners comply with the Premier Soccer League (PSL) schedule upon approval of the sale.
However, it remains unclear how the club will manage the congested fixture list.
Transfer Ban and Player Claims
The club is currently under a FIFA-imposed transfer ban due to unpaid wages to Nurković, which can only be lifted upon settlement of the debt.
Additionally, six other players have filed claims seeking early termination of their contracts, further complicating the club's financial and operational stability.
Source: UGC
Netizens React to Royal AM’s Sale Announcement
Tebogo remarked,
Tender gurus will buy it, and before you even know it, it will be owned by the same group of people again.
Mpendulo was blunt in his opinion:
Absolutely, no sane person will buy this team, even if it sells for R1.
Bongani questioned the financial logic of the sale, asking,
Who will incur such debt?
Jayzee predicted the club would remain unsold, leading to
PSL having to promote three teams next season."
Nhlamulo pointed out,
The debt is way more than the value of the club.
Phoku highlighted the financial risks, saying,
Whatever price SARS puts on this team, it will be expensive because the club’s value is now -R65M, and it might be relegated. Anyone who buys it doesn’t know how to run a business—unless they need to wash some money.
Theo dismissed the deal as a poor financial decision:
Bad investment. No investor is willing to take up such a deal... they need to come up with another approach because, in its current format, no one will buy it—not even Elon Musk.
Royal AM’s Future Hangs in the Balance
Briefly News previously reported that the sale of Royal AM has sparked significant interest and debate.
The club is currently under the administration of curator Jacob Venter, following a court order, with all assets—stadium, training facilities, and player contracts—preserved for potential sale.
PAY ATTENTION: Follow Briefly News on Twitter and never miss the hottest topics! Find us at @brieflyza!
Source: Briefly News
