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Zatara said:
Hasnt abramovich given money as gifts? i dont think they are beholden to him.
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Roman Abramovich still owed £726m under complex Chelsea structure
• Oligarch owed by holding company, not by Chelsea FC plc
• Russian retains right to call in outstanding debt in future

Roman-Abramovich-001.jpg

Chelsea's owner, Roman Abramovich, channels his loans to the club through a holding company, Fordstam Limited. Photograph: Ian Kington/AFP/Getty Images


David Conn

Wednesday 19 May 2010 07.01 BSTFirst published on Wednesday 19 May 2010 07.01 BST

This article is 6 years old


When Chelsea published their accounts for 2008-09 earlier this year, the club announced that its owner, the Russian oligarch Roman Abramovich, had written off his mammoth £726m loan to the club, and converted it into shares.

But is not quite as clear-cut as that. Abramovich channelled his loans to the club, since taking it over in 2003 and wanting to spend its way to trophies, via a holding company, Chelsea Limited. He loaned money to Chelsea Limited, who then loaned it on to Chelsea FC plc, which runs the club.

It is true that the loans from the holding company to Chelsea FC plc were fully converted to shares last year. However Abramovich's loan to Chelsea Limited, the holding company which owns Chelsea FC plc, was not. That loan remains owing; in fact it increased from £701m, because Abramovich loaned another £25m in a year when Chelsea's extravagant spending, and the dismissal of Luiz Felipe Scolari and his coaching team, produced losses of £47m.

The accounts of Chelsea Limited (whose name was changed during the year to Fordstam Limited), show that loan still outstanding: £726m, owed to Abramovich.

A spokesman for the club confirmed that yesterday: "Recapitalisation of loans happened at the level of Chelsea FC plc, not the holding company (Fordstam), therefore making the football club debt free."

That is true. But Fordstam owns the football club company, and owes Abramovich £726m. The loan is interest free, but it is repayable if Abramovich gives 18 months' notice. The Russian could still demand the money back some day, either if the club is making a profit, or if he were to sell it. He has not, in fact, written off the huge loans he has made on his Chelsea adventure.
 
Zatara said:
Hasnt abramovich given money as gifts? i dont think they are beholden to him.
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In short mate, no he hasn't written the debts off, it was reported by 'i think' the mirror that he had - in 2009 - but the guardian blew that out the water after the next set of financials where released by chelsea as wrong.


The current level of outstanding loans is over 1bn now btw
 

bluestevon said:
In short mate, no he hasn't written the debts off, it was reported by 'i think' the mirror that he had - in 2009 - but the guardian blew that out the water after the next set of financials where released by chelsea as wrong.


The current level of outstanding loans is over 1bn now btw
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In effect, if Blue Heaven Holdings owned 100% of EFC and there were a share issue, EFC would show no debt due in its accounts because at that level, there is no debt. The parent company would owe FM, but presumably interest free, no fixed repayment date and probably subordinated to claims of all other creditors
Similar situation at Chelsea.
 
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hibbo'sclass said:
In effect, if Blue Heaven Holdings owned 100% of EFC and there were a share issue, EFC would show no debt due in its accounts because at that level, there is no debt. The parent company would owe FM, but presumably interest free, no fixed repayment date and probably subordinated to claims of all other creditors
Similar situation to Chelsea.
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Aye that's my understanding of how it is as well mate. In every way shape and form it was exceptionally good news and very promising as to the owners commitment long term.
 
bluestevon said:
Aye that's my understanding of how it is as well mate. In every way shape and form it was exceptionally good news and very promising as to the owners commitment long term.
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Can't see a downside myself.
I think that the options will be exercised and a rights issue of some sort will be underwritten by BHHL (or its agent) and done within 12 -18 months max to capitalise the loan from BHHL. The club is then hopefully debt free except bank overdraft.
Fingers crossed
 

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