One of those responsible for conducting negotiations between Corinthians and Caixa Econômica Federal for the new financing agreement for Neo Química Arena, the club’s financial director, Wesley Melo, commented on details of the agreement in an interview with ge.
One of the points explained by Wesley Melo was the amount that Corinthians passed on to the state bank so far:
– Corinthians had already paid around R$ 165 million until 2017, then the cash flow ended up not allowing more payments – said the director.
At the time of construction of the stadium, the club took out a loan of R$ 400 million from Caixa. However, due to interest, the debt is already at R$ 611 million – it will be adjusted annually by the CDI (almost equivalent to the Selic rate, currently at 13.25%) + 2%.
A good part of this amount will be paid by Corinthians with the value of the naming rights of the arena. The sale of the property was concluded in 2020 for R$ 300 million, a value that undergoes annual adjustment by the IGPM (General Market Price Index, which closed 2021 at 17.78%). Thus, the balance that the club has to receive at the moment is approximately R$ 400 million.
According to Wesley Melo, Hypera Pharma has already paid for two of the 20 installments of the agreement:
– This money is 100% reserved in the fund, precisely to pay the next installment of the financing.
Corinthians owes Caixa BRL 611 million for Neo Química Arena — Photo: Bruno Cassucci
Under the new agreement with Caixa, Corinthians will begin to pay interest on the financing in 2023. As of 2025, it will also pay the principal (loan amount). The new contract provides for quarterly installments to be paid until the end of 2041.
In a presentation to directors last month, the alvinegra board estimated that it will pay Caixa BRL 76 million in 2023, BRL 64 million in 2024 and BRL 66 million in 2025 and 2026. Selic rate and other factors.
Wesley Melo shows confidence that the agreement will be honored without the need for “help” from other areas of Corinthians, such as the football department:
– It will not be necessary to take money from the club, the arena will be self-sustaining. At the moment, the arena has a large revenue capacity in terms of box office, boxes and other properties. We started doing more events in our arena. It is sustainable, and the expectation is that money will remain even after 2025. The arena is not a problem, but a solution!
Check out the interview with Wesley Melo, financial director of Corinthians, below:
The president of Caixa Econômica, Daniella Marques, said in an interview with Jovem Pan that the new contract between the club and the bank guarantees income from broadcasting rights to the club’s games and also from possible sales of athletes. That’s true?
– I can only answer what she has already made public. In the contract signed by us, there are confidentiality clauses, we cannot open details. But it goes through TV rights, also through revenue from sales of players, but this in the last case, if Corinthians is unable to compose the balance to make the interest and principal payments. However, our projections are fully feasible.
In that same interview, the president of Caixa stated that the first agreement was a “very unsuccessful credit operation”. Do you agree?
– No way. The first financial engineering that was done, conducted by President Andrés Sanchez, at the time made a lot of sense. For the information of that moment, it was relevant, possible, feasible. The problem is that the country has changed. External actions influenced and compromised the achievement of what was projected. These are things that are beyond your control for macroeconomic reasons. And the president of Caixa today (Wednesday) made a new statement that celebrates this new agreement, which was in fact relevant to the parties involved.
Were the projections made in the past overestimated?
– These were perspectives that did not materialize. There may have been exaggerations in the projections, eventually yes, but it was a period of crisis in the world that seriously impacted Brazil. It may have been an exaggeration, but given the information at the time, it seemed to make sense. Today it is easy to condemn and see where the differences have gone.
Wesley Melo, financial director of Corinthians — Photo: Corinthians TV/Reproduction
This new contract with Caixa comes at a time when experts are predicting a global recession and a scenario of rising interest rates. Does it worry?
– We took this into consideration, we were a little careful with the projections, we were super conservative. We made a payment projection within the conditions that we can honor, with the cash generation that the arena allows, with all its activities and the cost of structure and maintenance. The surplus is doable. Of course, no one is 100% shielded from the global crises that can happen, but we are much better preserved at this moment, we should have no problem honoring our commitments. And I don’t rule out being able to make larger contributions and anticipate these payments. I say with confidence that the agreement is sustainable.
If there is surplus money, the Corinthians Do you intend to use these funds to pay off the arena’s debt or to reinforce the club’s cash?
– The interest rate that we agreed with Caixa is very competitive, one of the best in the market, if not the best. Maybe I have no interest in making amortization, which I don’t need contractually, and bring this resource to the club to pay debts with higher indexes. This is what we are imagining, eventually over the next few years we will be able to consider making a debt reduction with Caixa.
Club directors estimate that the total amount paid for the Corinthians for the arena exceeds R$ 1.5 billion. Is this projection correct?
– It may even be a number that the Excel spreadsheet allows estimating, but it is innocuous, it makes no sense. It is far from representing an adequate analysis of a negotiation, of a commitment by Corinthians. We live in an inflationary country, with interest rates different from those of the USA and Europe, this impacts the purchase of a car, a property, a durable good. I don’t like this analysis, I think that if you are going to make this kind of comment, you have to say that we have a Naming Rights that was closed at R$300 million, today it is worth 400 million and I will receive much more, maybe even R$1 billion. I think this is information that in no way adds to the good negotiation we made.
Is this amount of BRL 1 billion with naming rights your real projection or a hypothetical number?
– It was a number I guessed, as an example. What I would like to make very clear is that the report that ended up mentioning this amount (of R$ 1.5 billion) caused doubts in counselors, partners, in the crowd, but when viewed in isolation, it is innocuous. I guessed the value of naming rights because the analysis needs to be broader. We don’t know what the behavior of inflation will be, then we would also have to talk about accounts receivable, not just accounts payable.
I know it’s hard to predict inflation and interest rates. But how much the Corinthians Do you believe you will have to pay the installment to Caixa as early as 2023?
– We have our projections, but I prefer not to comment, not to give an absolute number because it can do a disservice, people can start doing maths that are not simple in the face of such complex financing, but we will be prepared to pay these fees. We plan not to have any kind of delay.
Initially, the payment term for the World Cup financing was 180 months. That is, 15 years. Now the club has signed a deal until 2041. That won’t let the Corinthians financially stuck for longer?
– I don’t think so, this extension was important to leave a feasible payment flow, which we can honor. It wouldn’t do any good to make an agreement that later would have difficulty honoring, not this one, but the club’s next managements. The commitment belongs to Corinthians, not to whoever is in the chair. It was necessary to put this longer term to make everyone satisfied and confident of the payment: fans, press, opposition, Caixa, everyone. This was the necessary condition for an agreement to be signed.
+ Want to turn your football knowledge into cash prizes at each round of the Brasileirão? Access Cartola Express!
+ Let’s go Brazilian! The biggest offer of games for a price that gives game. Subscribe to Premiere!
— Photo: Reproduction
Click here, download the app and have Timão in the palm of your hand!
+ Watch: all about the Corinthians at Globo, sportv and ge