Times Online - Sunday Times
14-day race to rescue Leeds
The crisis at Elland Road has deepened with club shares suspended, but that could focus minds on a deal. By David Bond
THE group of Yorkshire businessmen behind a rescue package for Leeds United has been given two weeks to complete the £20m deal, or the club will go into administration.
After another traumatic 48 hours at Elland Road, the financially stricken club has been left on the brink after its major creditors failed to agree on Friday to a two-week extension to a critical repayment freeze.
Leeds are battling debts of more than £100m, with £60m of that a long-term securitisation bond owed to three large finance houses: American firms Met Life and Teachers and the British company M&G. A further £20m is owed to Registered European Football Finance Ltd (Reff) under a leaseback deal in which Leeds borrowed money to buy players.
With no formal protection from these creditors, there is now nothing to stop the club sliding into the hands of administrators.
Until Friday morning Leeds chief executive and acting chairman Trevor Birch had believed a sixth extension to the standstill agreement, which has become the club’s lifeline since the start of the year, was a formality.
Sources close to the club say that although the bond- holders were prepared to back another two-week extension, leaseback financiers Reff and the German insurance company behind the deal, Gerling, ran out of patience.
By the time the opposition became clear, it was too late for Birch to try to extend the deadline, and trading in the club’s shares was suspended at 2pm on Friday.
Although the move has pushed Leeds, who face Liverpool at Elland Road in the Premiership this afternoon, closer to insolvency, the club hopes it will focus minds to get a rescue deal finalised.
Creditors will be opposed to any moves to bring in the administrators, as it will mean they receive even less than they might get if the club is taken over by the Yorkshire consortium. But that will encourage more potential buyers to come forward.
The former Leeds vice- chairman Allan Leighton is believed to be ready with a rescue deal if the club goes into administration.
Last week a consortium led by Terry Fisher, the former Huddersfield Town chairman, withdrew, leaving just one interested group of Yorkshire businessmen. Gerald Krasner, the group’s spokesman, said last night that they were still keen and were further forward now than last weekend.
14-day race to rescue Leeds
The crisis at Elland Road has deepened with club shares suspended, but that could focus minds on a deal. By David Bond
THE group of Yorkshire businessmen behind a rescue package for Leeds United has been given two weeks to complete the £20m deal, or the club will go into administration.
After another traumatic 48 hours at Elland Road, the financially stricken club has been left on the brink after its major creditors failed to agree on Friday to a two-week extension to a critical repayment freeze.
Leeds are battling debts of more than £100m, with £60m of that a long-term securitisation bond owed to three large finance houses: American firms Met Life and Teachers and the British company M&G. A further £20m is owed to Registered European Football Finance Ltd (Reff) under a leaseback deal in which Leeds borrowed money to buy players.
With no formal protection from these creditors, there is now nothing to stop the club sliding into the hands of administrators.
Until Friday morning Leeds chief executive and acting chairman Trevor Birch had believed a sixth extension to the standstill agreement, which has become the club’s lifeline since the start of the year, was a formality.
Sources close to the club say that although the bond- holders were prepared to back another two-week extension, leaseback financiers Reff and the German insurance company behind the deal, Gerling, ran out of patience.
By the time the opposition became clear, it was too late for Birch to try to extend the deadline, and trading in the club’s shares was suspended at 2pm on Friday.
Although the move has pushed Leeds, who face Liverpool at Elland Road in the Premiership this afternoon, closer to insolvency, the club hopes it will focus minds to get a rescue deal finalised.
Creditors will be opposed to any moves to bring in the administrators, as it will mean they receive even less than they might get if the club is taken over by the Yorkshire consortium. But that will encourage more potential buyers to come forward.
The former Leeds vice- chairman Allan Leighton is believed to be ready with a rescue deal if the club goes into administration.
Last week a consortium led by Terry Fisher, the former Huddersfield Town chairman, withdrew, leaving just one interested group of Yorkshire businessmen. Gerald Krasner, the group’s spokesman, said last night that they were still keen and were further forward now than last weekend.
