Leeds United boardroom drama: The £17m debt GFH left for Cellino

Leeds United owner, Massimo Cellino.
Leeds United owner, Massimo Cellino.
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Gulf Finance House’s controversial involvement at Leeds United dramatically ended last night as Massimo Cellino assumed 100 per cent control of the Elland Road club.

United’s chairman announced a deal to buy out GFH’s minority stake, giving him and his UK firm, Eleonora Sport Ltd, complete ownership of Leeds for the first time.

Massimo Cellino

Massimo Cellino

Cellino acquired a 75 per cent shareholding in United from GFH - the Bahraini investment bank which bought Leeds in 2012 - in April 2014 and gradually increased his equity to more than 80 per cent.

An announcement from the club yesterday confirmed that GFH no longer holds any shares in the club.

The bank is still owed around £17m by Leeds, a debt left over from its time in charge, and Leeds issued a debenture earlier this week guaranteeing the repayment of that liability.

GFH’s stake in United was held by GFH Capital, a subsidiary based in Dubai which was originally used to front its takeover from Ken Bates.

In a short statement, Leeds said: “The club is delighted to confirm that Leeds United Football Club is now 100 per cent owned by Eleonora Sport Limited, it having purchased all of the shares previously held by GFH Capital.”

GFH’s departure from the boardroom will fuel speculation of an impending takeover at Elland Road following recent talks between Cellino and Italian businessman Andrea Radrizzani.

Radrizzani, who founded the global media firm MP & Silva and has strong business links to China, is understood to be interested in buying a majority of Eleonora Sport’s shares in a deal which would see Cellino stay on as a minority stakeholder.

Cellino is understood to want at least a 15 per cent share as part of any agreement which ends his reign as majority stakeholder.

Radrizzani was recently reported to be backed by Baofeng, a Chinese technology firm which earlier this summer appointed him as chairman of a related company, Baofeng Sport International.

Radrizzani, who attended Leeds’ pre-season friendly against Atalanta and their league game at Queens Park Rangers as a guest of Cellino’s, told the YEP last month that there was “nothing concrete” agreed and said he and United’s chairman had held a “simple conversation to understand the club better.”

The original share purchase agreement (SPA) negotiated between Cellino and GFH in 2014 denied Cellino the outright freedom to sell shares as he wished but his acquisition of a 100 per cent stake in Leeds effectively clears the way for a more straightforward change of ownership.

GFH endured a contentious spell in control of United, resulting in Cellino’s £11m takeover two-and-a-half years ago, and its continued involvement at Elland Road was highly unpopular.

Cellino blamed the bank for obstructing his progress and said the bank’s reluctance to invest funds in the club a minority shareholder was a reason behind his failure to repurchase United’s rented stadium, a ground the club have leased for 12 years.

As part of his takeover, Cellino agreed to assume debts of more than £20m owed to GFH and the Italian later negotiated a payment scheme which could see GFH draw money from the club until 2032. According Leeds’ most recent accounts, GFH was owed £17m as of June 30, 2015.