Leeds United's future was thrown into fresh doubt last night as Sebastian Sainsbury's £25m takeover hit new hurdles, and the chances of Elland Road being sold off to alleviate debt, perhaps as early as today, increased.
One source close to Nova Financial Partners, the US-based firm that is backing Sainsbury, maintained that Nova were in "good shape" last night to complete the takeover by the 1pm deadline today. Another later cited "serious difficulties" with the due diligence on the deal, adding that Sainsbury risked "going in blind" if he completed his buyout before taking due care in scrutinising the club's labyrinthine finances.
Nova's bankers refused last night to sanction the transfer of funds before due diligence was complete, forcing an 11th-hour rethink on financing. Sainsbury is due to travel from London to Leeds this morning to deal with whatever fate awaits him.
If an all-night session by lawyers and associates has paid dividends, he could be installed as the chairman by this afternoon. If not, he fully expects the Leeds board to accuse him of failing to deliver.
Today's 1pm deadline, announced by the Leeds chairman Gerald Krasner on Tuesday, was imposed mainly because the Leeds board must make an imminent repayment on a loan arising from their own purchase of the club. To do that deal, they borrowed £15m from Jack Petchey, a former Watford chairman, West Ham director and now the second largest shareholder in Aston Villa.
Some £9.5m is still owing, with an instalment due on Monday. It is understood there is a £2m penalty fee if the Leeds board default, and although the board could make the payment, cashflow would become tight. Hence the possibility that Elland Road will be sold in a sale-leaseback deal to raise funds.
According to Nova sources, they were told earlier this week that Elland Road would be sold this afternoon, to a buyer already lined up, if Nova's takeover was not complete by 1pm. There is no doubt Leeds are in serious financial trouble. If Sainsbury's bid falters, short-term asset-selling will not stop administration looming over the horizon.