Sunderland boosts its assets in run up to float

Sunderland, the Premier League football club, has bolstered its balance sheet in the run up to a pre-Christmas stock market flotation by putting its new state-of-the-art stadium in the books at nearly twice its building costs - even though the ground will not be ready until next season.

The all-seater stadium, which has yet to be named, will have a capacity of 42,000, making it the second-largest football ground in England.

It will replace Roker Park, Sunderland's home for almost a century and the only Premier League ground where fans can still stand to watch football.

According to the pathfinder prospectus published yesterday, Sunderland has spent pounds 15m building the new stadium. A further pounds 2.25m is expected to go on fitting out the ground and providing car parking facilities.

But a recent independent valuation by consultant surveyors Dunlop Heywood said the new ground is already worth pounds 26.5m. The valuation, which assumed the stadium had been completed, included the 12 acres of freehold land on which it is situated and the eight acres of leasehold interest in the nearby parking site. The revaluation increases Sunderland's illustrative pro forma net assets for May 1997 by pounds 9m to pounds 23.2m. Last year the company had negative shareholders funds.

"We think we got a bloody good deal on the stadium," David Stonehouse, finance director, said.

Under a deal with the Tyne & Wear Development Corporation, owner of the 40 acre site on the north bank of the River Wear, Sunderland will acquire the 12 acre freehold for a nominal sum. The club also has an option to acquire a 250-year lease on the eight acre site earmarked for car parking for a negligible amount. A multi-screen cinema and other leisure-related activities are earmarked for the remaining 20 acres.

The new stadium forms the centrepiece of Sunderland's flotation plans. The company confirmed it intends to raise pounds 10m to pounds 12m through a placing of shares with institutional investors and an offer for subscription valuing Sunderland at between pounds 40m and pounds 50m. Dealings are expected to begin on Christmas Eve.