Duncan Castles:
Though Bahraini bank GFH purchased the Championship only bought Leeds United on December 21, it has now stated that it intends to sell its stake in the club for an immediate profit.
In the company's accounts for 2012, GFH states that: "The Group has an active plan to sell its stake in LUFC Holdings Limited, and accordingly, the asset and liabilities acquired were classified as held-for-sale and presented in the consolidated statement of financial position. Subsequent to the year end, the Group has commenced negotiations relating to the sale of its stake in LUFC Holdings Limited."
GFH has offered shares in Leeds to more than one party, but are understood to be close to reaching agreement with a consortium involving Yorkshire businessman Steve Parkin. According to several sources close to the negotiations, talks have advanced to a stage at which a deal had been agreed in principle, although final paperwork remains unsigned.
If Parkin succeeds in completing the transaction, he plans to enter into partnership with an affluent Saudi investor. Former Leeds executive Adam Pearson will also form part of the consortium, taking on a day-to-day management role at the club.
"On 21 December 2012, the Group acquired 100% stake in Leeds City Holdings Limited (LCHL), a holding company for a number of trading entities whose activities form the operations of Leeds United Football Club (LUFC) in the United Kingdom,' GFH's accounts said. 'The acquisition was carried out through LUFC Holdings Company, a company incorporated in the Cayman Island and a wholly owned subsidiary of GFH Capital Limited.
'The acquisition has resulted in the consolidation of LUFC as at 31 December 2012 and recognition of identifiable assets (including intangible assets and favourable lease contracts) of $ 88,319 thousand and identifiable liabilities (including contingent consideration) of $ 42,655 thousand, representing the estimated fair value less cost to sell of the investment. The acquisition of LCHL resulted in a bargain purchase and the Group has recognised negative goodwill of $10,369 thousand which is included in the income statement under ‘Gain on acquisition of assets held-for- sale’. The bargain purchase was due to pressure on the sellers to exit their holdings due to change in their business plans.'
