West Ham changed owners yesterday in a deal orchestrated by Icelandic bank Straumur-Burdaras to head off the threat of foreclosure and a damaging points deduction. The club has been sold to CB (Claret and Blue) Holding, a consortium of four Icelandic banks led by Straumur. Former owner Bjorgolfur Gudmundsson, who bought the club for £85m in 2006, has stepped down as chairman. Straumur, which it itself insolvent, is a major creditor of Mr Gudmundsson, who saw his fortune wiped out in the Icelandic financial crisis.
West Ham changed owners yesterday in a deal orchestrated by Icelandic bank Straumur-Burdaras to head off the threat of foreclosure and a damaging points deduction. The club has been sold to CB (Claret and Blue) Holding, a consortium of four Icelandic banks led by Straumur. Former owner Bjorgolfur Gudmundsson, who bought the club for £85m in 2006, has stepped down as chairman. Straumur, which it itself insolvent, is a major creditor of Mr Gudmundsson, who saw his fortune wiped out in the Icelandic financial crisis. It will hold 70 per cent of CB Holding, with the balance held by Byr Savings Bank, MP Bank and state-owned Landsbanki. The move protects the club against the threat of any creditor of Mr Gudmundsson’s Hausa investment vehicle seeking a forced liquidation of its assets, the most prominent of which is West Ham. Court papers issued in December by Hausa suggest that it was seeking the sell the club for up to £250m, although a price tag of £100m would be more realistic. The club’s latest accounts for the year to May 2007 show that the club’s bank borrowings were £36m on turnover of £49m. However, they noted that the club was in the process of agreeing extended facilities of £47m.
The decision leaves the club in financial limbo. CB Holding has a three-year plan to run the club, aiming to recoup the money it is owed by Bjorgolfur Gudmundsson. The club will be forced to balance their books in the meantime. CB Holding will want to maintain the value of West Ham and is unlikely to sell too many top players because it could risk relegation and therefore a drop in value. Equally, it is unlikely to invest much money in transfers. West Ham owe Sheffield United a minimum of £21m rising to £27m after the Carlos Tevez affair. A payment to the Yorkshire club is due on July 1.