The
sale of Chelsea has been thrown into doubt over disagreements about what
will happen to the £2.5billion the club is expected to be sold for.
The consortium led by US businessman Todd Boehly is the preferred bidder to
buy Chelsea, but the UK government will not allow the sale to go through
unless it is completely certain Roman Abramovich will not receive any of the
proceeds.
Two months ago Abramovich put Chelsea up for sale and said he would not be
asking for his loans to the club to be repaid and all the proceeds would go
to a charitable foundation for "all the victims of the war in Ukraine".
Abramovich was sanctioned by the government on March 10, preventing him from
doing any business in the UK.
But the sale of Chelsea is being conducted by the Raine Group, an investment
bank appointed by Abramovich, and he will have the final say on who buys the
club.
The government is aware of attempts to restructure any potential deal in a
way which could see Abramovich receive the £1.5billion he has loaned the
club through its parent company Fordstam Limited.
The government has to issue a special license for Chelsea to be sold and it
would not do so if any of the proceeds were going to Abramovich or towards
paying back the loans he is owed by the club.
Chelsea's government license to operate runs out on May 31 and they are
facing the prospect of going out of business unless the club is sold or the
license is extended.
The Premier League are meeting on June 8 to constitute the new season, by
which time Chelsea would need to have a licence to be part of the next
campaign.
Chelsea and Abramovich have declined to comment.
Prospective Chelsea buyers given flexibility over debt
Chelsea bidders were told last week that they would be allowed to borrow
money to finance their offers for the club.
A source close to the sale process says the advice on debt was changed at
the same time as the bidders were asked to increase their offers by £500m.
The bidders are believed to have been told that there would be an element of
flexibility when it came to debt.
The Glazer family bought Manchester United in 2005 in a leveraged buyout
which has so far cost the club more than £1billion in interest and
repayments.
Where are we with the Boehly bid?
The consortium led by Todd Boehly is the preferred bidder to take over
Chelsea and they have until the end of this week to finalise the terms of an
agreement to buy the club.
The bid is already being scrutinised by the Premier League to see if it
passes their owners and directors test.
Like the other bids, they have presented their extensive plans for the club
to the Raine Group and they have given guarantees that they will not sell
the club for at least a decade.
They have also given assurances that they will invest at least £1billion in
the club and infrastructure, including redeveloping Stamford Bridge.
Where are we with the other bids?
The Sir Martin Broughton and Steve Pagliuca bids are still very much in
play, with both consortiums still interested in buying the club.
They are on standby to re-enter the process if the Boehly bid is
unsuccessful.
Both bids believe they have made very compelling bids for the club and both
believe the club will thrive and flourish in their hands.
Who are the other bidders?
Sir Martin Broughton, the former British Airways and Liverpool FC chairman,
and Lord Coe, the former British Olympian turned sports administrator and
businessman, are fronting a bid that has the financial firepower of Josh
Harris and Dave Blitzer, two wealthy American financiers, behind it.
Lewis Hamilton was one of the investors backing Broughton's attempt to
acquire the west London club and is understood to have committed £10m to the
bid.
Tennis legend Serena Williams is also among the backers of the Broughton
consortium, spearheaded by the former Liverpool chairman.
The other consortium is fronted by Steve Pagliuca, part-owner of the NBA's
Boston Celtics and Serie A's Atalanta, which includes support from Larry
Tanenbaum.
Pagliuca is a private equity billionaire who has made a fortune from his
career at Bain Capital.
Among the group's other co-investors are said to be John Burbank, founder of
the San Francisco hedge fund Passport Capital, and Eduardo Saverin, the
Facebook co-founder, who was the first investor in the tech behemoth.
What about the late Ratcliffe bid?
It emerged last week that Sir Jim Ratcliffe, Britain's richest man, had
tabled a last-minute £4.25billion bid to buy the west London club.
But, the consortium of LA Dodgers part-owner Boehly was still named as the
preferred bidder.
Ratcliffe has not engaged in the process set out by the Raine Group, making
it difficult for his bid to be considered.
Irrespective of that, his bid remains on the table and Ratcliffe is still
interested in buying Chelsea.
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