Are Leeds At Endgame?

mike65

I've just been listening to Five Live talking about the perilous state of Leeds Utd plc. Jeff Randall who is the Beebs financial guru seems to belive that short of a billionaire godfather turning up very quickly they are close to being finnished as a going concern.

This from bbc sport

Leeds United are holding "continuing, constructive discussions" over the future of the debt-ridden club.

Leeds have until 19 January to find a new buyer following a deadline imposed by the club's major creditors, who are owed a combined £82m.

In the meantime Leeds have admitted the club's future remains in limbo.

In a statement to the Stock Exchange Leeds said: "None of the interested parties' proposals contemplates an offer for the company's shares."

Since December there has been a hefty amount of trading in Leeds shares.

More than 30% of the company has changed hands, with brokers KBC Peel Hunt - who are acting as advisors to Leeds United Plc - involved in the majority of the dealings.

Schroder Investment Management Ltd, who up until recently were the largest institutional shareholder with a stake of 12.1%, have sold 4% - 12.25m shares - of their stock.

During December the share price hit a 20-month high amid talk of a possible takeover by Chinese businessman Xu Ming.

Xu, who owns Dalian Shide, a Chinese first division club, is one of China's richest men, according to Forbes.

Sheikh Abdulrahman bin Mubarak Al-Khalifa is another potential saviour, but former board member Allan Leighton is also believed to be assembling a takeover consortium.

Mike.

The Muppet

Looks serious with the proposed backers looking to only buy parts of the company and not lock stock and barrell as is required to save the club . Its unlikely anyone will step in at this late stage with the necessary finances to stop the inevitable.

Sad day for Leeds Fans and Football.

mike65

This from www.unison.ie

LEEDS UNITED yesterday revealed that none of the parties interested in rescuing the club from financial meltdown is preparing to make an offer to buy out shareholders.

The news that there is no one willing to spend at least £15m for the equity in the publicly-listed company increases the sense of urgency over debt restructuring talks before next Monday's deadline.

Creditors have given Trevor Birch, the Leeds chief executive, until January 19 to secure investment or find a buyer before they force the club into administration. The announcement confirms scepticism that a 'white knight' bidder will step forward.

"The board of Leeds United confirms that it is in continuing, constructive discussions with a number of parties regarding proposals to purchase the Company's business and assets or to inject funds," it said. "However, none of these interested parties' proposals contemplates an offer for the company's shares."

The coming week is the important one if Leeds are to remain in top-flight football. Debts are believed to amount to £83m, of which £60m relates to a long-term bond held by three financial institutions. The bondholders are only likely to extend their deadline, set in early December, if there is hard evidence of new cash coming into the business.

Mike.

The Muppet

What will administration mean for leeds ? will there be a free for all on the players?

mike65

I think its a fire sale situation, the administrator will try to raise as much money as possible from sales of assets

heres a defintion I found-

Administration Order
An Administration order is a Court Order placing a company that is, or is likely to become, insolvent under the control of an Administration following a petition by the company, its directors or a creditor. The purpose of the order is to achieve a survival of the company's business, allow a reorganisation or ensure the most advantageous realisation of its assets whilst protecting it from action by its creditors.

Mike.

Sand

How much will the players raise realistically in a situation where everyone knows Leeds *have* to sell. Cant see them making 80+ million. Could Elland Road - or rather the property under it - be up for sale as well?

Wheeler

ill still support leeds to the very end...dont care if they end up in the dr. martin league, il still stick with em

ZENER

ill still support leeds to the very end...dont care if they end up in the dr. martin league, il still stick with em

Respect

tinky

SAXA

Isn't there some rule about the League deducting 10 points off you if you go into administration or is that only if you are relegated and go into administration ???

Anyone know?

uberwolf

there ought be charges brought against Ridsdale.

The Muppet

Isn't there some rule about the League deducting 10 points off you if you go into administration or is that only if you are relegated and go into administration ???

The Deduction of points for going into administration only applies to clubs outside the premiership at the moment. However there are plans to introduce the rule to the premiership before this season ends.

Posted by wheeler
ill still support leeds to the very end...dont care if they end up in the dr. martin league, il still stick with em

Fair Dues to you.

BaZmO*

Originally posted by Wheeler
ill still support leeds to the very end...dont care if they end up in the dr. martin league, il still stick with em

Why don't you do what a lot of people do when their team hits a bad patch?

Support Man Utd.!!!!

[DF]Lenny

No I think Leeds are able to go into liquidation this season if relegation looks a dead cert.Therefore the will be deducted 15 league points or whatever(dont matter if they are going down) andfined a couple of hundred grand.Therefore they can start next season in 1st division without the risk of further problems..restructure their debts and avoid censure.Due to their extremely low market value(5million stg or thereabouts)This could be when venture capitalists swoop for 'em.I believe there has been quite a turnover in Leeds shares in the last week or two.

Wheeler

I believe there has been quite a turnover in Leeds shares in the last week or two.

your right there

The Muppet

Reports of Leeds demise may be premature as their shares have risen 40% this morning as speculation grows over a club takeover. They are trying to get the deadline of Monday for administration extended.

Wheeler

they reckon it will be the sheik after all that could save the club

kmart6

They have been sayin that for the ladt few month's

Wheeler

alot of turnover in shares in the last 2 days.something is going

[DF]Lenny

Yep something is afoot,someones gonna make a killing on Leeds in the next year..

Mountjoy Mugger

http://www.mirror.co.uk/sport/sporttop/content_objectid=13822347_method=full_siteid=50143_headline=-LEEDS%2DUNITED%2DARE%2DSAVED-name_page.html

They reckon the Sheik has got the money sorted.

Zaph

Latest reports quote chairman Trvor Birch as saying that it may be necessary to sell Elland Road. He said that the site is prime development land and could be sold at some stage in the future to fund a new, larger stadium to generate the revenue the club needs. This has been spoken about before and was primarily the reason why the £60m. bond was raised in the first place, before Ridsdale decided to buy the likes of Seth Johnson with the cash instead. While it's something thatmay be necessary, the more pressing concern is to make sure there's a club to play at Elland Road or elsewhere.

It does look like the club has managed to secure an extension of at least a week to arranges a £5m. cash injection to help them survive until the end of the season. That's the first bit of good news I've heard for a couple of weeks. All the talk about the Sheikh appears to be going nowhere - the club aren't convinced he has the money.

Originally posted by uberwolf
there ought be charges brought against Ridsdale

I Agree, although running a business into the ground doesn't appear to be a criminal activity just yet.

And I'm with Wheeler, doesn't matter where the club ends up, I'll still support them. Just think, it could be your club next...

Kingp35

They have agreed an extension untill january the 26th which may also be extended by a further two weeks if they can raise the £5m within that week. Its looking likely that the players will take a 30% wage deferral which will raise the cash needed. As for where the club goes from feb. 6th I don't know but to get a buyer they have got to stay up. I feel that if the club goes down they are in serious trouble and will definitely go into administration.

Its true that they are planning to sell the ground but that will not happen for at least 3-5 years so that is not important right now. Basically the club need to raise funds to stay afloat to the end of the season and avoid relegation at all costs. If they can do that then a buyer should be able to be found. Whether thay acn do it or not I don't know but no matter what happens I know ill still support them.

MARCHING ON TOGETHER!!!

BaZmO*

Originally posted by Kingp35
MARCHING ON TOGETHER!!!

Ahh Bless!

SAXA

Was listening to today fm and Mark Lawrenson said he had been talking to Birch and the whole Sheikh story is a load of rubbish and no Sheikh had made any contact with Leeds. So is this another tabloid made up story and if not where did it come from ?

Wheeler

theres definatley a sheik alright..saw pictures of him on the web wearing leeds stuff..whether he deserves the publicity hes gettin is another story..good pint though

Kingp35

Yeah the sheik is definitely real alright and he does have an interest in buying leeds but as of it no official approach never mind bid has been made for the club. As far as I know the sheik can't raise enough cash to buy leeds never mind get rid of their debt so I don't think he would be the right man to take over the club if he doesnt have to money to seriously help out. Yeah I don't think the sheik will buy the club he cant afford it. Dont think anyone will put in a bid for the club until the end of the season when evryone knows if they will be relegated or not so the most important right now is the team to start winning games and then a buyer will be found.

smiaras

This post has been deleted.

mike65

Truly pathetic - we support the club but not so much as to be payed only 25,000 a week rather than 30,000!

Mike.

Kingp35

yeah I think its a disgrace the players wont take a wage deferral. That is the best way for the club to get the funds needed to operate to the end of the season. The players would get their wages back then its not like they need it or anything. So much for loyalty to the club. We are gonna have to sell now and probably means relegation and then real trouble.The players should grow up and try and help the club that they are supposed to love!!

johnor

your going down paddy face it... muahahha

The Muppet

The players should grow up and try and help the club that they are supposed to love!!

Just another indication that palyers anf fans hold a completely different view of football. To us its life and death to them its a job. Who's right. I know i wouldn,t be too keen on taking a 20% cut in my wages but the again I,m not quite on 40 grand a week. Its sad to see leeds in such trouble but the players are not responsible for the decisions that has then in the state they are. Whos to guarentte that this step will save the club who are over 80m in debt.

smiaras

This post has been deleted.

Zaph

I'm really pissed off with the player's attitude. For example, Seth Johnson's reported £37.5k a week would be scaled back to £24.5k. I don't know about anyone else, but I reckon I could just about survive on 24 grand a week. As for selling the players, whatever about selling Milner - he has all the makings of a great player so it would be a shame to see him go - but selling Robinson would just be admitting that there's nothing can be done to save the club. As good as he's reported to be, there's not a hope in hell that they'd stay up if Carson took over in goal with such a porous defence in front of him, he's just too inexperienced.

I agree with what Trevor Birch said the other day, that the sheikh should put up or shut up. It's been dragging on far too long at this stage, he either has the money or he doesn't. If he does, I'm sure he could come to some sort of deal to provide the £5m needed with an option to buy the club in the summer with the price dependent on what division the club is in. If he really doesn't want to buy it though he should say so and stop getting people's hopes up. The way things are at the moment I can see the lower half of the first division beckoning next season, with even the second division a real
possibility.

Kingp35

I agree with zapf if leeds do sell and get relegated this year i can it turning out the be like sheffield wednesday who have just plumeted down the leagues. We have gotta keep our players but in saying that I dont see the point in keeping the loan players at the club if they are not playing games. They are just adding onto the clubs wage bill which needs to be cut. Both sakho and domi have found new clubs to go to but they are refusing to leave and want to stay at leeds. I suppose at least it shows a bit of heart.

If leeds go down this tear i can just see them continuing to go down. I hope it doesn't happen

mike65

This from The Times -

February 28, 2004

Creditors cast new doubt on future for Leeds
By Ashling O’Connor


LEEDS United lurched closer to collapse last night after their key creditors declined to renew the “standstill agreement” that has been their financial lifeline during a troubled season. The board left discussions with bondholders and other major creditors yesterday without the breathing space previously granted to try to save the stricken club from administration.

In a statement to the London Stock Exchange, the board said that the creditors had not formally renewed the agreement put in place on December 4 that had effectively frozen debt repayments. Since then, those owed money by the club have agreed to five extensions of the agreement. Leeds board members fully expected the creditors to roll over the deadline for a sixth time. The outcome will be viewed as a setback to those trying to keep the club out of administration.

The plug has not yet been pulled on the club, whose total debts are believed to have spiralled above £90 million, but the move indicates that time is running out for a team once within touching distance of the European Cup but now struggling to avoid relegation. Leeds, bottom of the table, would be the first Premiership club to be forced into administration.

The Leeds board said that it continued to retain the “support” of creditors while it pursued negotiations with a consortium of Yorkshire businessmen interested in buying the club. Amid the uncertainty, however, it was decided Leeds shares should not be traded for the foreseeable future. At 2pm, the shares were suspended at 2¾p “pending clarification of the company’s financial position”, giving Leeds a notional value of £9.5 million.

It was unclear last night whether the club’s creditors would draw up another standstill agreement until the end of the season. Much depends on the outcome of negotiations between the Leeds board and the consortium of businessmen, who are believed to have offered £20 million in repayable loans to take over the club and its debts. The consortium, rumoured to include Geoffrey Richmond, the former Bradford City chairman, although he has denied it, came out yesterday to defend its position, denying it was “asset-stripping” and emphasising that it had “the credentials and finances” to save Leeds from administration. “Any suggestion that the consortium are looking at this acquisition as an asset-stripping exercise is untrue, so much so we can make a commitment now that, if we are successful in buying the club, Leeds United’s future is and always will be at Elland Road,” the consortium said.

“Anyone suggesting otherwise is scaremongering. Despite wishing to keep the members of the consortium anonymous for the moment, our intentions have been clear for everyone to see. Our one and only motivation is to ensure the survival of Leeds United.”

A second consortium, fronted by Terry Fisher, the former Huddersfield Town chairman, on Thursday pulled out of the running to take over Leeds.

The difficulty for any buyer is knowing whether they are taking on a Premiership club or one soon to be playing in the Nationwide League first division. The income differential is about £20 million a year.

Leeds, who reached the semi-finals of the European Cup three seasons ago, have seen their fortunes plummet after a player spending spree under Peter Ridsdale that stretched the club’s finances. The chairman, who was later forced to resign, had mortgaged the future of the club through a £60 million bond secured against the stadium and future gate receipts. The club has sold many of its stars, including Rio Ferdinand, Harry Kewell, Jonathan Woodgate, Robbie Fowler and Robbie Keane, but has failed to stem the negative tide. In the year to June 2003, Leeds reported a pre-tax loss of £49.5 million.

“It’s worrying news in the sense that, although the club say the creditors are still supporting them, there seems to be a more direct time limit on the negotiations now and one has to be worried about the threat of administration which still lies over the club,” Ray Fell, chairman of the Leeds United Supporters’ Club, said.

Mike.

PHB

The players are doing the best thing for themselves, some of them could be clubless for a long period of time and they need to save.

Also how would you feel if your boss came in and told you that you were getting a wage cut since the company is in a bit of trouble atm, I can't imagine you being too happy

secret_squirrel

Administrations not necessarily a bad thing. Plenty of clubs have gone into adminstration and survived Bradford..(bad example ) Swindon, Portsmouth (I think)

If the administrator decides the creditors are better off with the club being run as a going concern it could give Leeds just the time they need. Although realistically they should be preparing for 1st Div football now....

Dr Bolouswki

Portsmouth have not been in administration, though Leicester have and now seem to be ok...

If leeds somehow escape the drop I'd imagine they will be ok - otherwise they are doomed....