The decision came late in a fraught day for the south London club during which dealings in Millwall shares were suspended on the stock market pending further details about the club's financial position. Millwall's shares were suspended at 4p, valuing the club at pounds 14m. It is now likely that the club's broker, Townsley & Co, will launch a rescue rights issue to raise around pounds 6m to refinance the club. Full details will be revealed later today.
City sources were uncertain how the Millwall collapse might affect Newcastle United's pounds 200m flotation planned for later this year. One broker said: "I don't think it's fair to tar everyone with the same brush. But it does show that it is not all roses for everyone."
Millwall's problems centre on the club's high costs which include a large playing squad. Peter Mead, chairman, said the club had been living beyond its means. "For years now we have been gearing up for Premier League football. On a number of occasions we have come close, but failed. Sadly, we were relegated last year but we are still being run as a Premier League club with all the costs that involves.
"We have decided to refinance once and for all, to allow us to carry on and avoid selling our best players which was becoming debilitating."
In November, Millwall reported full-year operating losses of pounds 3.4m while turnover was also down. Millwall's problems show that in spite of the stampede to the stock market by football clubs, a flotation is not the panacea to all financial problems.
One source close to Millwall said yesterday. "If you're in the Premier League then you get a lot of money from TV and other sources. But if you get relegated the money is not so good."
Millwall went public in 1989, one of the first football clubs to seek a listing. In recent years there has been a flurry of new listings including Chelsea, Sunderland and Leeds United, which is part of the Caspian Group.