The sale of Chelsea has been thrown into doubt due to disagreements over what will happen to the £2.5billion the club are expected to be sold for.
The consortium led by American businessman Todd Boehly is the preferred bidder to buy Chelsea, but the UK government will not allow the sale unless it is absolutely certain that Roman Abramovich will not receive any proceeds.
Two months ago, Abramovich put Chelsea up for sale and said he would not seek repayment of his loans to the club and that all proceeds would go to a charity foundation for “all victims of the war in Ukraine”.
Abramovich was sanctioned by the government on March 10, barring him from doing business in the UK.
But the sale of Chelsea is being led 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 so that Abramovich receives the £1.5billion he loaned the club through its parent company Fordstam Limited.
The government has to issue a special license for Chelsea to be sold and they wouldn’t do this if any of the profits went to Abramovich or the repayment of loans the club owes him.
Chelsea’s government license to operate expires on May 31 and they face the prospect of bankruptcy unless the club is sold or the license is extended.
The Premier League meets on June 8 to constitute the new season, by which time Chelsea should have a license to be part of the next campaign.
Chelsea and Abramovich declined to comment.
Time is running out for all sides, but who will blink first?
Analysis by Kaveh Solhekol, chief reporter of Sky Sports News
Last week, some of the bidders were told that Abramovich or a company linked to him did in fact want to be reimbursed for loans he had made to Chelsea. This would mean Roman Abramovich did not cancel his £1.5bn loans and ultimately that money could go to Roman Abramovich. There’s no way the British government will agree to this, because Abramovich is sanctioned.
So what will happen to the money? And who is going to have control of this money? Will it be the British government or will it be Abramovich? It can’t be Abramovich, because he’s sanctioned. The UK government does not allow him to do business in the UK. So we could have a potential situation where we have a standoff between Abramovich and the government. And all the while, the clock is ticking. Time is running out as Chelsea’s operating license expires at the end of this month, on May 31.
There are two sides to this. If you see it from Abramovich’s perspective, he thinks: “They want me to sell Chelsea for £2.5billion and I’m not going to get any of that money. I’m going to lose all that money. I’ I I’m also going to lose the club and I’m going to lose the £1.5billion I loaned the club.” From another perspective, the British government is saying, “Look at what is happening in Ukraine, look at what Russia is doing in Ukraine. Abramovich is someone who is linked to the Russian government. He is linked to Vladimir Putin. That’s why he’s being sanctioned. We can’t let him do business in the UK. We can’t let him do 1p in the UK.”
And in the middle of it all is a stuck Chelsea football club.
What happens to Chelsea if Abramovich refuses to sell? And of course he could do it. He has other business interests. He has a house in Kensington worth £150m. He is not selling this at the moment and is donating the proceeds to charity. He sits well.
But the only problem is that if he sits still and refuses to sell Chelsea, then Chelsea will go bankrupt. Chelsea will no longer exist and, of course, he has always maintained that Chelsea are very, very close to his heart and he doesn’t want that to happen. But if that were to happen, who would blame the Chelsea fans? Would they blame Abramovich or would they blame the British government?
So time is running out not only for Abramovich but also for the UK government as they cannot have a situation in their hands when at the end of this month Chelsea’s operating license expires and potentially one of the biggest clubs in the world could go out of business.
Potential Chelsea buyers given flexibility on debt
Chelsea bidders were told last week they would be allowed to borrow money to fund their bids for the club.
A source close to the sale process says the debt advice was changed at the same time as bidders were asked to raise their bids by £500million.
It is believed that bidders were told there would be an element of debt flexibility.
The Glazer family bought Manchester United in 2005 in a leveraged buyout which has so far cost the club more than £1 billion in interest and repayments.
Where are we with the Boehly offer?
The Todd Boehly-led consortium are the preferred bidder to take over Chelsea and they have until the end of this week to finalize terms of a deal to buy the club.
The offer is already being reviewed by the Premier League to see if it passes the test of their owners and administrators.
Like the other bids, they presented their detailed plans for the club to the Raine Group and they guaranteed that they would not sell the club for at least a decade.
They have also assured that they will invest at least £1billion in the club and infrastructure, including the redevelopment of Stamford Bridge.
Where are we with the other offers?
the Sir Martin Broughton and Steve Pagliuca bids are still in play, with both consortia still interested in buying the club.
They are ready to re-enter the process if Boehly’s offer is not accepted.
Both believe they have made very compelling offers for the club and both believe the club will thrive and prosper in their hands.
What about Ratcliffe’s late offer?
It emerged last week that Sir Jim RatcliffeBritain’s richest man had tabled a last-minute £4.25billion bid to buy the west London club.
But, the consortium of LA Dodgers co-owner Boehly was still named as the preferred bidder.
Ratcliffe has not committed to the process set out by the Raine Group, making it difficult to review its offer.
Regardless, his offer remains on the table and Ratcliffe is still interested in buying Chelsea.