Leeds United Investor GFH Has 'Little Financial Fire Power'
Published October 17, 2012
Accounts of its Bahrain parent company Gulf Finance House show that the
Dubai-based investment firm negotiating to takeover Championship club
Leeds United, one of English football's most-famous clubs, "appears to
have little financial fire power to complete the deal," according to
Sa'Pinto, French & Weir of REUTERS. According to an internal document
from '10 reviewed by Reuters and verified by four former insiders, the
Bahrain company had "previously taken big fees from projects that rarely
see completion." Dubai-based GFH Capital "is in exclusive talks to buy
Leeds, which it estimates has a market value of around £52M ($83M)."
However, the GFH group "had more than a quarter of a billion dollars of
accumulated losses and less than $6M in cash at the end of June." Leeds
Supporters' Trust Chair Gary Cooper said, "Words don't buy football
clubs; Money buys football clubs. We would expect to see evidence of
GFH's ability to fulfill their claims and promises in the very near
future after the takeover." GFH Capital CEO David Haigh said that "his
company had the resources to complete the transaction and buy new
players, but gave no further details on the deal, citing a
non-disclosure agreement during negotiations." GFH Capital said that "it
can afford the investments to get the club back into the Premier League
and buy back the stadium." The group's accounts "present a more more
equivocal picture." After losing more than a billion dollars in '09 and
'10, the group reported a profit of just $381,000 in '11 -- less than a
month's pay for a top EPL player -- after "slashing staff costs and
canceling staff bonuses already accounted for in previous financial
statements" (REUTERS, 10/16).
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