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The Flemish He used his financial strength to avoid suffering during the pandemic of the new coronavirus. And he resorted to a line of credit contracted last year at Banco Santander, from which he withdrew R $ 50 million, which will go to the club’s sole cash as working capital, that is, to pay off debts and expiring contracts.
The main reason President Rodolfo Landim’s board of directors resorted to the loan was the possibility of not receiving funds from sponsors, especially Adidas. Without them and without a box office, the club has already begun to renegotiate the payment of the purchase fees for its players and the commission of the businessmen.
The good news is that the Flamengo movement is preventive. And it doesn’t put the club at risk. Since the loan model is considered “clean”, that is, it was done without the club having to give any capital as collateral.
Until last year, the board even took similar loan amounts to help the club teller, so as not to delay payments. This time, the rope is tightened around the neck, but the exit is common for most companies in Brazil and in the world.
Payments within a year
There is only one important issue for the club to consider. Flamengo will pay interest to the bank for having the coffers full, such as an overdraft, and can only use the amount withdrawn to pay off debts within a year.
Future earnings should already be covered by the normalization of the Brazilian soccer calendar in the second half, the club hopes.
The idea is to go through this foggy period without the need to negotiate, for example, discounts on the salaries of the main cast players.
It was feared that discontinuing games would require such a move starting next month, or failure to receive some values would lead to late payment of payroll.
But other current club expenses are also expected to receive financial encouragement from the loan, such as club accounts in general.
When the flow of payments returns to normal, Flamengo replaces the money he took with the bank. The operation has already been approved by the powers of the club at the time of its hiring, and the board has only exercised withdrawal now.
