Setanta Sports has been handed a lifeline, after an American billionaire stepped in with an 11th hour rescue offer for the beleaguered pay-TV company. Ireland-based Setanta has been teetering on the brink of administration for the past week, but looks to have secured its short term future, as it faced a payment deadline to the English Premier League on Monday.
Its founders Mickey O'Rourke and Larry Ryan have been locked in emergency talks with potential investors this week, as they look to put together a rescue package and avoid calling in the administrators to wind the business up. Yesterday it emerged that Access Industries, alongside some unnamed investors, had emerged to potentially rescue the business. Access has offered £20m to take a 51 per cent stake in Setanta, which owns rights to sporting events including the FA Cup and the Scottish Premier League (SPL).
Setanta declined to comment. Insiders said: "This isn't designed to buy more time, this is the solution to steady the ship."
Access emerged as a stakeholder in Setanta earlier this year, after it accumulated a 3 per cent stake. Access was set up in 1986 by the Russian-born billionaire Leonid Blavatnik, who moved to the US when he was 21. Mr Blavatnik remains chairman and president of the industrial group and last year Forbes listed him as the 28th richest man in America.
Access released a statement yesterday saying it "can confirm that this morning it submitted a proposal to the board of Setanta to acquire a majority interest in Setanta, refinancing the company. Access believes that this proposal would secure the future of the broadcaster for customers, football and employees." The deal was subject to "a number of pre-conditions being met," it said.
Mr Blavatnik already has media interests, as the largest investor of Top Up TV, a digital television service in the UK, as well as sports content company Premium TV. He also has a stake in Russian media company CTC Media.
Outside of his media interests, he teamed up with oligarchs Viktor Vekselberg and Mikhail Fridman to take a controlling stake in Russian oil group TNK, which subsequently secured a joint venture with BP.
In 2007, Access spent $19bn (£11.6bn) on securing Lyondell Chemical Company. Yet in the wake of the financial downturn the business filed for bankruptcy and looked to restructure its huge debt burden. RBS, which was a lender to Mr Blavatnik, was forced to write down £1bn of its loan.
Mr Blavatnik yesterday emerged as Setanta's potential white knight. Setanta has been under pressure since missing a £3m payment to the SPL earlier this month. The SPL has remained in negotiations since, but the payment is yet to be made.
It is believed the £30m owed to the English Premier League is less flexible and a failure to pay could push the group into administration. The body blow came to the group when it lost one of its Premier League packages in the round of bidding earlier this year, halving its games to 23 a season. One Setanta investor said: "When they lost that, as well as the effects of the recession, the business model started becoming unsustainable for us."
Earlier this week, many of the principal investors decided against injecting more cash.