Leeds United secure loan
Square Ball 23/10/13
A document from Companies House today revealed that Leeds City Holdings, the parent company of Leeds United, have entered into a loan agreement with Berrydale Seventh Sport Holdings. This will provide the club with funds.
Whilst in principle, a loan isn’t an ideal thing for a club to require, the loan is very situational. Firstly, Berrydale Seventh Sport Holdings seems to be a subsidiary of Gulf Finance House, not least because David Haigh is a director of the company. This loan is, therefore, likely a method of investing into the club without incurring unnecessary expenses, as suggested by George Dyer on Twitter:
https://twitter.com/Ole1985/status/392987514837151744
This is also a legacy of the Bates era at Leeds, and relates to the working capital shortfalls the club has experienced since last summer. The risk taken on the East Stand development led to a need to front-load various incomes due to the club (for example, sponsorship money), which means there is often a shortfall in cash flow. The document even refers to one of these agreements, with Compass Group. The loan is likely just an attempt to rectify that heading forward, and may relate to a need to fund an impending signing or two.
Whilst loans are not ideal, it is a sign of investment from GFH.
A document from Companies House today revealed that Leeds City Holdings, the parent company of Leeds United, have entered into a loan agreement with Berrydale Seventh Sport Holdings. This will provide the club with funds.
Whilst in principle, a loan isn’t an ideal thing for a club to require, the loan is very situational. Firstly, Berrydale Seventh Sport Holdings seems to be a subsidiary of Gulf Finance House, not least because David Haigh is a director of the company. This loan is, therefore, likely a method of investing into the club without incurring unnecessary expenses, as suggested by George Dyer on Twitter:
https://twitter.com/Ole1985/status/392987514837151744
This is also a legacy of the Bates era at Leeds, and relates to the working capital shortfalls the club has experienced since last summer. The risk taken on the East Stand development led to a need to front-load various incomes due to the club (for example, sponsorship money), which means there is often a shortfall in cash flow. The document even refers to one of these agreements, with Compass Group. The loan is likely just an attempt to rectify that heading forward, and may relate to a need to fund an impending signing or two.
Whilst loans are not ideal, it is a sign of investment from GFH.
