Chelsea Village seeks funds from rescue investor

By Susie Mesure
Thursday 09 January 2003 01:00
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Chelsea Village, the owner of Chelsea Football Club, has mounted a cash call in an attempt to slash its near £100m debt mountain.

The group, which has £75m of eurobonds, has called for an extraordinary shareholders meeting to approve plans to sell about 15 per cent of the company.

Chelsea Village said it was talking to "a number of parties" with a view "to issuing either all or a substantial proportion of its unissued share capital". The group currently has 169 million issued shares.

In a statement to the London Stock Exchange, Chelsea Village said the shares would be issued at "a significant premium to the current market price." The news sparked a 11 per cent rise in the group's share price, which closed up 2p at 20.5p. City sources said the deal could net Chelsea as much as £10m. An EGM date has been set for 29 January.

"The board believes that an injection of further equity is in the best interests of the company for its long-term future and will strengthen its balance sheet. The board strongly recommend that shareholders support the proposed resolution," the company said in a separate statement.

The group, which is chaired by Ken Bates, is thought to be keen to refinance its eurobonds, which are due to be repaid in 2007. They pay interest at 8.75 per cent, which costs the club more than £6m a year.

Chelsea Village, ownership of which has been shrouded in secrecy since it floated in the mid-Nineties, racked up the debts during an ambition programme to develop the company into a diversified leisure group. Its Stamford Bridge site boasts hotels, a fitness club, a nightclub and several restaurants as well as a museum devoted to the club. Mr Bates, who has had complete control of Chelsea since buying the club for a nominal £1m in the Seventies, has a 29.5 per cent stake.

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