The auditor for Brera Holdings, an Irish company that was established in 2022 to own an Italian football club with inconsistent results, has pointed out risk surrounding the organisation’s capacity to keep running after repeated financial losses. Brera Holdings, which was listed on the Nasdaq one and a half years ago, stated in its annual report for 2023 that it is exploring various options to generate funds. These options include public offerings, acquiring private equity, and securing debt financing.
In the interim, the company’s executive chairman, Daniel Joseph McGorry, who works as an investment banker with Boustead Securities in the US, has shown his readiness to finance the company if required for the foreseeable future, especially if there is absence of income from current operations or alternative funding. Consequently, the Board is confident that Brera will have enough working capital for the next year at least, which has enabled directors to prepare the accounts considering the continuity of operations.
However, the company’s auditor, TAAD, has emphasised that accumulated losses by the company could seriously question its ability to remain operational. The net loss for Brera increased to €4.91 million in the previous year from €1.23 million in 2022, the year it was founded.
Brera failed to meet a deadline as per US stock market regulations to file its annual report, also known as the 20-F report, by the close of April, which marks four months since the conclusion of its financial year. It pledged to submit the report before the previous Monday to achieve compliance again with the Nasdaq, but the report was shared four days after that.
Since its listing in late January 2023, Brera’s shares have plunged by 86 per cent. The company’s present market value is $7.7 million (€7.1 million). Brera is officially registered in Ireland for tax reasons, with its registered address being on Burlington Road in Dublin 4, and it is in control of Milan’s Brera FC.
Established in 2000, Brera FC, often referred to as Milan’s “third team” following Inter Milan and AC Milan, is overseen by Brera Holdings, a company formed in Dublin in June 2022. The parent company set itself up to manage the ‘cult’ football club, which sought to raise funds via an Initial Public Offering (IPO) with an aim to enlarge by buying and developing an array of football clubs located in emerging markets such as Eastern Europe, Africa, and South America.
The club ventured into the African market in March of the previous year by setting up Brera Tchumene, a team that joined the second-division league in Mozambique. Soon after, it procured 90 per cent ownership of FK Akademija Pandev, a top-tier football club in North Macedonia.
By June 2023, Brera had acquired a minor yet significant stake in Manchester United. The share turned out to be profitable, yielding a return of about 74% by the year-end once it sold the entire stake when UK’s billionaire Jim Ratcliffe offered to buy a small share in the club.
Additionally, the control of UYBA Volley, an Italian Serie A1 women’s professional volleyball team, was also taken over by Brera, wrapping up acquisitions last year.