Banks take control at West Ham as financial crisis deepens

[dww]

• Gudmundsson ousted as Icelandic administrators move in
• Gianfranco Zola to have no more spending money over summer

Matt Scott
The Guardian, Friday 17 April 2009 00.05 BST

West Ham United will be taken over by a consortium of international banks in the coming weeks. Icelandic government-appointed officials running the stricken investment bank Straumur are set to take control from Bjorgolfur *Gudmundsson at Upton Park as they seek to recover the money lost in the collapse of that nation's economy.

Straumur was last month declared "effectively insolvent" by the UK's Financial Services Authority as it took steps to protect the deposits of investors at its branch in London. Twenty-four hours later it was nationalised by the Icelandic government. Straumur provided the bulk of the finance for Gudmundsson when he bought the club in 2006 from its shareholders, led by the then chairman, Terry Brown, in an £85m deal. But since the collapse in the Icelandic economy and the meltdown of his investment vehicle, Hansa, last year, Gudmundsson's ability to maintain ownership has been in serious doubt.

Despite a moratorium on Gudmundsson's debts until June, won last month in the Icelandic courts, Straumur's banking creditors are now preparing to take advantage of covenants on the debt that allow for the club to be taken over. It is believed that the banks will form a new board, with Gudmundsson making way.

But West Ham fans looking for *reassurance over the future of the club will find no comfort in the latest development. The club remains up for sale, although the incoming owners are understood to be patient as they look to achieve a big price for the Hammers.

That means the consortium of about half a dozen banks nominated by more than 40 institutions – Straumur's *creditors – expect to remain in charge of West Ham next season and probably well in to 2011. But although Gudmundsson is set to relinquish *control, there will be no fresh investment for Gianfranco Zola to buy players and any summer spending will have to come from cash generated by sales. There is also likely to be pressure to make further cutbacks following the overindulgence of the previous chairman, Eggert Magnusson, which alarmed the club's owner so much he was sacked.

However, Zola's value to the new owners is clear from his record since arriving with his assistant Steve Clarke early this season. The Italian has achieved a strong performance in the Premier League in spite of the departure of nearly £20m of *playing talent with the sales of Craig *Bellamy, *Matthew Etherington and *Hayden Mullins in January.

With six league games remaining, West Ham remain in contention for a place in next season's Europa Cup, a fact that has done well to hide the difficulties off the pitch. This column revealed last month that the club's accountants, Deloitte, had refused to sign-off West Ham's annual report due to the uncertainty over how much compensation it would have to pay Sheffield United for the illegal use of *Carlos Tevez that was found to have contributed to the Bramall Lane club's relegation. In the event that amounted to £25m, payable over five years.

Zola has admitted that Matthew Upson may leave in the summer following the 29-year-old's comments that if the club fail to qualify for next season's Europa Cup the England defender will consider his options. "I believe Matthew is enjoying what he's doing," said Zola. "But you will have to ask him. I don't want to be the one who is selling something that doesn't belong to me."

Upson, who is thought to interest former club, Arsenal, and Manchester City, has two years remaining on his current deal but Zola would not be drawn on the subject of a new contract. "I don't know, we will see. We are going to talk to him and see if he can be happy staying here.

[dww]

I have to say I have been really impressed by Zola/Clarke. I really though West Ham would be relegation candidates with them having to sell in January but they have done very well.

[Joe King]

I think they are in a good shout of getting into the Europa League. I too have been extremely surprised by Zola and the impact he has had on West Ham. You can't help but think that Clarke's knowledge of organising defences has helped incredibly whilst Zola's flair and zest of creative freedom has rubbed off especially on the youngsters like Collison, Stanislas, Sears and obviously Cole.

Sky Sports News are reporting he is getting a new contract so there must be some money for him to spend. I would imagine West Ham is a reasonable big name outside of England with them winning the World Cup - you could see these investors looking at further foreign investment as West Ham does have room for improvement.

[Craig_H]

I couldnt be arsed to read the whole article, are they going into administration?

Lot of time for WHU, met loads of their fans after the cup final in 2006 and not one of them was bitter or anything, very graceful and respectful. After the way they lost, i was very appreciative of their dignity. Furthermore, a very good mate of mine is a STH at West Ham, a great lad who has a huge amount of respect for LFC and texts me whenever we're in a big game to wish me luck. He also sent me a great text on Wednesday which meant a lot.

I hope they're going to be ok.

[The_weatherman]

• Gudmundsson ousted as Icelandic administrators move in
• Gianfranco Zola to have no more spending money over summer

Matt Scott
The Guardian, Friday 17 April 2009 00.05 BST

West Ham United will be taken over by a consortium of international banks in the coming weeks. Icelandic government-appointed officials running the stricken investment bank Straumur are set to take control from Bjorgolfur *Gudmundsson at Upton Park as they seek to recover the money lost in the collapse of that nation's economy.

Straumur was last month declared "effectively insolvent" by the UK's Financial Services Authority as it took steps to protect the deposits of investors at its branch in London. Twenty-four hours later it was nationalised by the Icelandic government. Straumur provided the bulk of the finance for Gudmundsson when he bought the club in 2006 from its shareholders, led by the then chairman, Terry Brown, in an £85m deal. But since the collapse in the Icelandic economy and the meltdown of his investment vehicle, Hansa, last year, Gudmundsson's ability to maintain ownership has been in serious doubt.

Despite a moratorium on Gudmundsson's debts until June, won last month in the Icelandic courts, Straumur's banking creditors are now preparing to take advantage of covenants on the debt that allow for the club to be taken over. It is believed that the banks will form a new board, with Gudmundsson making way.

But West Ham fans looking for *reassurance over the future of the club will find no comfort in the latest development. The club remains up for sale, although the incoming owners are understood to be patient as they look to achieve a big price for the Hammers.

That means the consortium of about half a dozen banks nominated by more than 40 institutions – Straumur's *creditors – expect to remain in charge of West Ham next season and probably well in to 2011. But although Gudmundsson is set to relinquish *control, there will be no fresh investment for Gianfranco Zola to buy players and any summer spending will have to come from cash generated by sales. There is also likely to be pressure to make further cutbacks following the overindulgence of the previous chairman, Eggert Magnusson, which alarmed the club's owner so much he was sacked.

However, Zola's value to the new owners is clear from his record since arriving with his assistant Steve Clarke early this season. The Italian has achieved a strong performance in the Premier League in spite of the departure of nearly £20m of *playing talent with the sales of Craig *Bellamy, *Matthew Etherington and *Hayden Mullins in January.

With six league games remaining, West Ham remain in contention for a place in next season's Europa Cup, a fact that has done well to hide the difficulties off the pitch. This column revealed last month that the club's accountants, Deloitte, had refused to sign-off West Ham's annual report due to the uncertainty over how much compensation it would have to pay Sheffield United for the illegal use of *Carlos Tevez that was found to have contributed to the Bramall Lane club's relegation. In the event that amounted to £25m, payable over five years.

Zola has admitted that Matthew Upson may leave in the summer following the 29-year-old's comments that if the club fail to qualify for next season's Europa Cup the England defender will consider his options. "I believe Matthew is enjoying what he's doing," said Zola. "But you will have to ask him. I don't want to be the one who is selling something that doesn't belong to me."

Upson, who is thought to interest former club, Arsenal, and Manchester City, has two years remaining on his current deal but Zola would not be drawn on the subject of a new contract. "I don't know, we will see. We are going to talk to him and see if he can be happy staying here.

I own a football club

[dww]

I couldnt be arsed to read the whole article, are they going into administration?

No.

[Neil Young]

No.

So what does it say then?

[dww]

That the same investment vehicle will remain in charge next season and try and sell West Ham for as high a price as possible without putting in any more cash, albeit with different leadership - in effect I think they are doing the same as Southampton in that while they own West Ham it is not West ham being taken over/going into administration. It seems like a cunning ploy to avoid official administration to me. At least that is the impression I have got from conversations with people around here. I should probably have been more equivocal in my last post but i worried that it may become to long for Craig to be bothered with.

[Neil Young]

That the same investment vehicle will remain in charge next season and try and sell West Ham for as high a price as possible without putting in any more cash. It seems like a cunning ploy to avoid official administration to me. At least that is the impression I have got from conversations with people around here. I should probably have been more equivocal in my last post but i worried that it may become to long for Craig to be bothered with.

Thanks.

In future please post the executive summary for Craig and me in the original post.

[Craig_H]

That the same investment vehicle will remain in charge next season and try and sell West Ham for as high a price as possible without putting in any more cash, albeit with different leadership - in effect I think they are doing the same as Southampton in that while they own West Ham it is not West ham being taken over/going into administration. It seems like a cunning ploy to avoid official administration to me. At least that is the impression I have got from conversations with people around here. I should probably have been more equivocal in my last post but i worried that it may become to long for Craig to be bothered with.

It was twenty to one in the morning and i was tired, you fecker

[Nicey]

I have to say I have been really impressed by Zola/Clarke. I really though West Ham would be relegation candidates with them having to sell in January but they have done very well.

Extremely well and his team plays nice open expansive football