Spurs rights issue to net pounds 11m for new stand

Tottenham Hotspur, the quoted Premier League football club, is raising pounds 11m through a rights issue to build a new North Stand which will increase the capacity at its White Hart Lane ground to 36,000.

However, Spurs chairman Alan Sugar also revealed that the club is cutting the value of its players registrations by a third in the light of the recent Bosman ruling on the transfer of out-of-contract players.

The registrations of Spurs players are currently valued at pounds 20.8m in the Tottenham balance sheet. The club said it was "considering an adjustment" of pounds 6.8m which will appear as an exceptional item in the current year accounts.

The decision is likely to force other clubs to follow suit although it will not affect Manchester United, one of the other top quoted clubs, as the club does not treat its players as assets on its balance sheet.

"It is our view and that of our auditors and anyone with half a brain that the transfer system as we know it is on its last legs," Mr Sugar said.

He said transfer fees were likely to fall as a result and that smaller clubs may find themselves robbed of windfall gains from selling star players to larger clubs. Under the Bosman ruling, clubs cannot demand transfer fees for out of contract players who move to other clubs within the European Union. Mr Sugar said the effect on Spurs would be minimal as the club's "superstar" players were on four-year contracts.

But he warned that players' wages would have to be covered by club's operating incomes, such as television revenue, gate receipts and merchandising, rather than from the sale of players.

Spurs plans to use the pounds 11m raised from its rights issue to redevelop the North Stand at White Hart Lane and complete the development of the South stand. The club's pounds 5.8m debts will also be reduced though none of the rights issue cash will go to buy players.

Work on the North Stand should start towards the end of next season and be completed for the start of the new season in August 1997. The existing stand is likely to be closed for four or five games at the end of next year which will mean a slight loss of revenue.

The one-for-four rights issue is priced at 270p. Mr Sugar is not taking up his rights (which would cost him more than pounds 5m). His stake will fall from 51 per cent to 41 per cent and his 2m-share entitlement will be taken up by institutions.

Tottenham is forecasting a final dividend of 3p. The shares closed 14p higher at 324p.

Investment column, page 20