Telegraph | Sport | Takeover ensures Leeds survival
Takeover ensures Leeds survival
By Mihir Bose
(Filed: 20/03/2004)
Leeds United yesterday staved off the threat of financial meltdown when a Yorkshire-based consortium completed a £22 million takeover of the Premiership's bottom club.
The deal ended three months of uncertainty since Leeds announced a financial standstill arrangement with major creditors, and two months of negotiations involving teams of lawyers. Gerald Krasner, an insolvency practitioner with chartered accountants Bartfields who has been the consortium's representative in the last few weeks, has been named as Leeds chairman.
As revealed by The Daily Telegraph this week, the deal was financed by Jack Petchey, the former Watford owner who has a 16.5 per cent stake in Aston Villa. He is lending £15 million, while the consortium, Adulant Force Ltd, find another £7 million. Petchey will not be on the board and expects to be repaid within 12 months.
Leeds United plc, whose financial wheeling and dealing under former chairman Peter Ridsdale brought the club to this sorry pass, have been stripped of their assets and liabilities and put into administration. The football club, who were a subsidiary, become a private company. They take over the debts and the assets of the plc, agreement having been reached with the creditors, who are owed more than £80 million.
The 20,000 shareholders of Leeds United plc, supporters mostly, will not recover any element of their investment. The shares were suspended at 2.75p on Feb 27 and the plc will eventually be dissolved.
The plc directors may find themselves answering questions from the Department of Trade and Industry as Brendan Guilfoyle, a chartered accountant, has been appointed to look into their conduct and report whether there are grounds for any disqualifications.
Krasner's football club board comprises Peter Lorimer, the former Leeds and Scotland player, property developers Simon Morris and Melvin Helme, entrepreneur Melvyn Levi, and David Richmond, son of the former Bradford City chairman Geoffrey Richmond.
They will benefit from an £11 million cut in the annual wage bill at the end of the season as player contracts run out. However, relegation would mean a £20 million 'hit' in terms of reduced income.
Even though projections have taken relegation into account, yesterday's nifty financial footwork may turn out to be only the story of the first half should Leeds drop into the Nationwide League.
Takeover ensures Leeds survival
By Mihir Bose
(Filed: 20/03/2004)
Leeds United yesterday staved off the threat of financial meltdown when a Yorkshire-based consortium completed a £22 million takeover of the Premiership's bottom club.
The deal ended three months of uncertainty since Leeds announced a financial standstill arrangement with major creditors, and two months of negotiations involving teams of lawyers. Gerald Krasner, an insolvency practitioner with chartered accountants Bartfields who has been the consortium's representative in the last few weeks, has been named as Leeds chairman.
As revealed by The Daily Telegraph this week, the deal was financed by Jack Petchey, the former Watford owner who has a 16.5 per cent stake in Aston Villa. He is lending £15 million, while the consortium, Adulant Force Ltd, find another £7 million. Petchey will not be on the board and expects to be repaid within 12 months.
Leeds United plc, whose financial wheeling and dealing under former chairman Peter Ridsdale brought the club to this sorry pass, have been stripped of their assets and liabilities and put into administration. The football club, who were a subsidiary, become a private company. They take over the debts and the assets of the plc, agreement having been reached with the creditors, who are owed more than £80 million.
The 20,000 shareholders of Leeds United plc, supporters mostly, will not recover any element of their investment. The shares were suspended at 2.75p on Feb 27 and the plc will eventually be dissolved.
The plc directors may find themselves answering questions from the Department of Trade and Industry as Brendan Guilfoyle, a chartered accountant, has been appointed to look into their conduct and report whether there are grounds for any disqualifications.
Krasner's football club board comprises Peter Lorimer, the former Leeds and Scotland player, property developers Simon Morris and Melvin Helme, entrepreneur Melvyn Levi, and David Richmond, son of the former Bradford City chairman Geoffrey Richmond.
They will benefit from an £11 million cut in the annual wage bill at the end of the season as player contracts run out. However, relegation would mean a £20 million 'hit' in terms of reduced income.
Even though projections have taken relegation into account, yesterday's nifty financial footwork may turn out to be only the story of the first half should Leeds drop into the Nationwide League.
