|
Championship promotion contenders are close to completing a complex refinancing deal which it is hoped will bring Premiership football to the Welsh capital city. The proposals include a £35m stadium redevelopment and a debt-for-equity swap that would see existing shareholders, including former supremo Sam Hammam, heavily diluted (i.e., their shareholdings would become a much smaller proportion of the total issued shares). Under the swap proposals drawn up by new Bluebirds boss Peter Ridsdale, formerly at Leeds United, as yet unidentified institutional investors would pay £12m in return for a dominant 90 per cent stake in the club. £9m would be used to reduce the club's £24m debt with £3m available as working capital. It is not clear who holds the debt. It is made up of loan notes held by creditors so mysterious that even Ridsdale has 'no idea' who they are. However, apparently loan-note holders are prepared to write down a further £9m of debt in return for naming rights on the new stadium that the club hopes to move into December 2008. If they are to exercise naming rights, they will have to reveal who they are.
Ridsdale has stated that the club is currently in discussion with six potential investors who clearly see a big future for top flight soccer in rugby oriented Cymru. The club is going to put up about £16m or 30 per cent of the funding for the new stadium project which will also incorporate a new athletics stadium and an indoor football facility. Ridsdale has stated that the club's contribution would come from three sources: the sale of its existing Ninian Park ground; a grant from the Football Foundation; and the £9m securitisation of five years worth of premium seats in the new stadium. It is hoped that the executive committee of the local council, which is anticipated to provide the remaining 70 per cent of the funding, will sign off on the deal on 14 December. This is a very ingenious package which could see Cardiff City return to the top flight where they once were, but from an outsider's perspective there are comparisons with a house of cards which could fall down if one element was removed. However, Ridsdale is 'very optimistic' that the club will be able to start 'looking forward and not over our shoulders.'
In the longer term he belives that both a flotation and the acquisition of a significant stake by unspecified local community interests were possible. He commented, 'This is one of the few clubs that is potentially flotable.' The trend has been for formerly floated companies to go private or at least off the market, but perhaps Cardiff City could prove an exception.
|
