Leeds United chairman Andrea Radrizzani offered to use the club’s Elland Road stadium as security for a £26million bank loan which his company, Aser, and a bidding partner, Gestio Capital, intended to use to complete a takeover of the Italian club Sampdoria.
Under a heads of terms agreement co-signed by Radrizzani —
essentially an agreement in principle — Elland Road would act as collateral as
part of a deal by Radrizzani’s Aser and his bidding partner Gestio Capital to
borrow €30m (£25.8m; $32.1m) from Italian bank Banca Sistema, helping to fund
their Sampdoria buy-out.
Leeds are majority-owned by Radrizzani but the club’s
minority shareholder, 49ers Enterprises, has been in discussions to acquire
control of the club. No agreement has yet been reached, however, and sources
close to the takeover process told The Athletic that the 49ers
had not been informed about the stadium being put forward as the security for a
potential loan.
Less than 24 hours after Radrizzani had announced
an agreement in principle to purchase Sampdoria, The Athletic learned
that a proposal had earlier been drawn up which meant that in order for the
bank to approve the loan, it would be secured against Leeds’ Elland Road
ground, which is controlled by Elland Road Ltd, the UK company which controls
the stadium.
The proposed bridging loan would be due for repayment within two years, and
also contains clauses showing that the bank would charge interest of
provisionally between six and nine per cent per year during this period.
However, the agreement would also enable the loan to be extended for up to a
decade, which throws open the possibility that Leeds United’s home could act as
security for Radrizzani’s Italian venture on Sampdoria for 10 years. The
current status of the proposed loan and the extent to which it has progressed
beyond a heads of terms agreement is unclear, but no charge has been
registered, at the time of publication, on Companies House, the executive
agency of the British government that maintains the register of companies.
It remains unclear whether the agreement in principle has progressed
further, or if Radrizzani ultimately opted for a different approach to secure
funding, but it is remarkable in itself that the Leeds chairman was
prepared to put his name to securing the stadium of his current club against a
loan to buy a different club. It is also likely to strain relations between
Radrizzani and the 49ers just at the point supporters may be hoping they will
thrash out a final agreement for a takeover.
The potential of Elland Road as security against a loan risks angering Leeds
supporters, raising serious questions about why the ground could be used to
assist the purchase of a different club. It would be a remarkable development
in any event, but even more so in the days following relegation. Elland Road
has been the home of Leeds United ever since the club’s formation in 1919,
which makes this a matter of significant public interest to both the local
community and the club’s global fan base.
Radrizzani’s purchase of Elland Road six years ago was viewed as a major
step towards stability for Leeds, despite it not returning to the hands of the
club directly. The indication was that any future takeover was likely to
include the stadium as part of the deal, but that may now be in doubt.
Previously, Leeds had been paying rent of around £1.7m a year to use it.
Those payments stopped temporarily after Radrizzani bought the ground, although
the club’s promotion to the Premier League saw annual rent payments begin
again.
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