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Volume 6 No. 212


The Dubai-based firm leading the proposed takeover of Championship club Leeds United has "spoken out for the first time," promising to guide the club back to the Premier League “as quickly as possible,” according to Phil Hay of the YORKSHIRE EVENING POST. GFH Capital Ltd. -- the company heading up the proposed buy-out of Leeds -- "underlined their commitment to reaching a deal to acquire a majority stake" from current Chair and Owner Ken Bates. GFH Capital Directors Salem Patel and Hisham Alrayes and Deputy CEO David Haigh released a statement that "offered no exact details of how their takeover -- thought to be costing around £52M ($83M) -- would be funded or who was ultimately behind the bid." However, they gave their backing to Manager Neil Warnock and said that the repurchase of United’s Elland Road stadium from its private owners "would be part of their future plan." Patel added: “We are keen on waking this sleeping giant and forging a sustainable long term future for the club -- both on and off the pitch. We also hope to take back ownership of Elland Road and continue to work closely with Neil Warnock and the team” (YORKSHIRE EVENING POST, 9/30).

DEEP POCKETS: In Yorkshire, Hay also reported that GFH has "raised and invested" $5B in schemes in the Gulf region and beyond. The bank said it has a “track record and specialisation in creating new financial institutions and the conception of high value economic infrastructure projects.” For Leeds United, "so far so good." The organization behind the only confirmed bid to buy the club comes "with promises of cash, vision and innovation." However, "what do others say about it, and what is the independent view of this Bahraini banking institution?" Earlier this year, KPMG audited GFH’s accounts for the three months through March 31. In a letter to the bank’s board of directors sent on May 14, KPMG said: “As at March 31, 2012, the Group had accumulated losses of $300.7M and, as of that date, its current contractual obligations exceeded its liquid assets. As a result, the ability of the Group to meet its obligations when due depends on its ability to achieve a timely disposal of assets. These factors indicate the existence of material uncertainties which may cast significant doubt about the Group’s ability to continue as a going concern" (YORKSHIRE EVENING POST, 9/29).

CONCERNS OVER FUNDING: In Abu Dhabi, Ben Flanagan reported that investment bank Exotix said in a research note that GFH's core operations "were not producing significant cash, and its ability to pay future debts was in doubt." The note said, "We remain wary of GFH's ability to carry on as a going concern ... the company now runs a serious risk of default." According to Exotix, GFH, which "was hit hard by the financial crisis," has total debt amounting to $252M. In May, the bank obtained permission from creditors to restructure a $110M debt, but Exotix said GFK's sukuk should be evaluated "from a liquidation perspective" (THE NATIONAL, 9/30). Also in Abu Dhabi, Duncan Castles noted that Bates has been involved in discussions with the Middle East group since early '12. GFH was "granted exclusivity to pursue a takeover in June and subsequently agreed a price for Bates' shares." A dispute over completion, however, has "rumbled on since late-July with multiple legal teams unable to negotiate a solution" (THE NATIONAL, 9/30).