• Court papers reveal owner threatened by insolvency
• Hammers claim to have up to nine potential buyers
Sachin Nakrani guardian.co.uk, Friday 2 January 2009 00.05 GMT
West Ham United's owner Bjorgolfur Gudmundsson bought the club for £85m in 2006 and hopes to generate £250m by selling it. Photograph: Akira Suemori/AP
The owner of West Ham United, Bjorgolfur Gudmundsson, has just over two months to sell the club before his holding company, Hansa, faces the possibility of being declared insolvent, court papers in his native Iceland have revealed.
Gudmundsson has put West Ham on the market in order to pay back debts exceeding £50m that resulted from the collapse of the Icelandic bank Landsbanki, in which he held a 41% stake.
Interest has been shown but Gudmundsson, who bought the club for £85m in 2006, is struggling to finalise a deal having initially expected to raise £250m, a figure that is proving unrealistic in the current financial climate. This is something he needs to overcome by 6 March when, according to documents seen by the Guardian, court officials will reconvene in Reykjavik to decide if Hansa is in a position to repay its creditors, or has to be declared insolvent and subsequently stripped of its assets, including West Ham.
Should the worse come to the worst, that could lead to the club being placed in administration in order to keep it alive. If that came to pass, the Premier League has confirmed West Ham would be hit with an immediate points deduction. "Any club within the division that suffers an insolvency event will automatically receive a nine-point sporting sanction," a spokesman said.
The most pressing of Hansa's creditors is the Reykjavik-based MP Investment Bank, which is owed 5.4% of the company's overall debt. At a 10 December hearing, representatives for MP argued that Hansa's financial problems "are completely insurmountable ones and it is certain that their payment difficulties are not temporary but permanent … The only real reason why Hansa wished for a payment cessation was to prevent the creditors collecting their claims, which would quickly have bankrupted the company."
Hansa was, however, able to obtain breathing space by assuring the courts that it could generate substantial funds from selling West Ham. Hansa said it had already made contact with prospective owners and could generate up to £250m from any sale. It compared the situation to the sale of Manchester City, for £230m, saying that West Ham was worth more because of its "London location, its loyal supporters, its proximity to the Olympic Village and the fact that the club owns its own field".
But there has been little progress towards a takeover in recent weeks, partly due to Christmas but also because the respective parties have not been able to agree on a fee. A source close to Gudmundsson admitted this week that £250m has become an unrealistic figure and that if he is to finalise a deal in the coming months, an offer closer to half of that will almost certainly have to be accepted.
"It is very difficult to sell any football club right now, it is hard to maximise value," the source said. "But Mr Gudmundsson will not accept an unsatisfactory amount, he is prepared to wait for the right offer to come along." He also said Hansa had options for paying back creditors other than selling West Ham.
A spokesman for MP this week confirmed it will again call for Hansa to be declared insolvent when the parties reconvene in March if West Ham has not been sold.
Such financial uncertainty puts the club's manager, Gianfranco Zola, in a difficult position. The club's chief executive, Scott Duxbury, has insisted the Italian is not under pressure to sell any players, but he has been told by Gudmundsson that any purchases during the just-opened transfer window can only be made by selling first. Zola is open to the possibility of cashing in on Craig Bellamy, who has scored just eight goals for the club following his £7.5m move from Liverpool in July 2007, but wants more than the £6m Spurs bid for the player in order to finance his own purchases. To generate funds, Zola is also prepared to let a number of fringe players, such as Julien Faubert and Luis Boa Morte, leave this month.
As many as nine potential buyers are said by the West Ham source to have shown an interest in the club and Gudmundsson, who is now permanently based in Reykjavik and maintains contact with Upton Park via his vice-chairman Asgeir Fridgeirsson, hopes discussions regarding a sale will speed up now the holiday period is over.
• Hammers claim to have up to nine potential buyers
Sachin Nakrani guardian.co.uk, Friday 2 January 2009 00.05 GMT
West Ham United's owner Bjorgolfur Gudmundsson bought the club for £85m in 2006 and hopes to generate £250m by selling it. Photograph: Akira Suemori/AP
The owner of West Ham United, Bjorgolfur Gudmundsson, has just over two months to sell the club before his holding company, Hansa, faces the possibility of being declared insolvent, court papers in his native Iceland have revealed.
Gudmundsson has put West Ham on the market in order to pay back debts exceeding £50m that resulted from the collapse of the Icelandic bank Landsbanki, in which he held a 41% stake.
Interest has been shown but Gudmundsson, who bought the club for £85m in 2006, is struggling to finalise a deal having initially expected to raise £250m, a figure that is proving unrealistic in the current financial climate. This is something he needs to overcome by 6 March when, according to documents seen by the Guardian, court officials will reconvene in Reykjavik to decide if Hansa is in a position to repay its creditors, or has to be declared insolvent and subsequently stripped of its assets, including West Ham.
Should the worse come to the worst, that could lead to the club being placed in administration in order to keep it alive. If that came to pass, the Premier League has confirmed West Ham would be hit with an immediate points deduction. "Any club within the division that suffers an insolvency event will automatically receive a nine-point sporting sanction," a spokesman said.
The most pressing of Hansa's creditors is the Reykjavik-based MP Investment Bank, which is owed 5.4% of the company's overall debt. At a 10 December hearing, representatives for MP argued that Hansa's financial problems "are completely insurmountable ones and it is certain that their payment difficulties are not temporary but permanent … The only real reason why Hansa wished for a payment cessation was to prevent the creditors collecting their claims, which would quickly have bankrupted the company."
Hansa was, however, able to obtain breathing space by assuring the courts that it could generate substantial funds from selling West Ham. Hansa said it had already made contact with prospective owners and could generate up to £250m from any sale. It compared the situation to the sale of Manchester City, for £230m, saying that West Ham was worth more because of its "London location, its loyal supporters, its proximity to the Olympic Village and the fact that the club owns its own field".
But there has been little progress towards a takeover in recent weeks, partly due to Christmas but also because the respective parties have not been able to agree on a fee. A source close to Gudmundsson admitted this week that £250m has become an unrealistic figure and that if he is to finalise a deal in the coming months, an offer closer to half of that will almost certainly have to be accepted.
"It is very difficult to sell any football club right now, it is hard to maximise value," the source said. "But Mr Gudmundsson will not accept an unsatisfactory amount, he is prepared to wait for the right offer to come along." He also said Hansa had options for paying back creditors other than selling West Ham.
A spokesman for MP this week confirmed it will again call for Hansa to be declared insolvent when the parties reconvene in March if West Ham has not been sold.
Such financial uncertainty puts the club's manager, Gianfranco Zola, in a difficult position. The club's chief executive, Scott Duxbury, has insisted the Italian is not under pressure to sell any players, but he has been told by Gudmundsson that any purchases during the just-opened transfer window can only be made by selling first. Zola is open to the possibility of cashing in on Craig Bellamy, who has scored just eight goals for the club following his £7.5m move from Liverpool in July 2007, but wants more than the £6m Spurs bid for the player in order to finance his own purchases. To generate funds, Zola is also prepared to let a number of fringe players, such as Julien Faubert and Luis Boa Morte, leave this month.
As many as nine potential buyers are said by the West Ham source to have shown an interest in the club and Gudmundsson, who is now permanently based in Reykjavik and maintains contact with Upton Park via his vice-chairman Asgeir Fridgeirsson, hopes discussions regarding a sale will speed up now the holiday period is over.
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