Massimo Cellino says he has reached a deal with former Leeds United owner and shareholder Gulf Finance House which will rid the club of debts owed to the bank and its associates.
In an interview with the BBC, Cellino said he and GFH would sign an agreement in the next few days significantly restructuring the millions of pounds owed by Leeds since his takeover of the club in April.
Cellino’s purchase of a 75 per cent stake in United cost the Italian businessman £11m in cash but he also agreed to inherit and repay £24m of short and long-term debt.
Some £10.5m was due to be repaid by the turn of this year with the remaining £13.5m owed in staggered payments by December 2017.
Cellino acquired majority control of Leeds at a time when the club were losing more than £1m a month but he has introduced heavy cost-cutting measures at Elland Road in his short time as owner, including heavy redundancies among United’s staff.
As part of the latest agreement, GFH will continue to hold a 10 per cent shareholding in United with club chairman Salah Nooruddin and Bahrain’s International Investment Bank (IIB) retaining the remaining 15 per cent.
Nooruddin and Salem Patel are both on the board at Elland Road as representatives of GFH.
Cellino told the BBC: “I can tell you I have done a deal with GFH to sign in a few days’ time which sorts out the historic debt. We are all happy.
“I remain 75 per cent in charge and GFH are happy that their share is now worth something.”
Exact details of the agreement are not clear but the YEP understands that the deal will wipe out a large portion of the £24m debt while changing the circumstances activating repayment of the remaining cash.
Cellino, who said that United now had £20m of working capital available and would push ahead with plans to buy back Elland Road from the stadium’s private owners, has been fighting financial problems from the day of his takeover on April 7.
A formal redundancy process was launched in May and numerous staff have left the club, including members of United’s backroom team.
The YEP revealed yesterday that goalkeeping coach Andy Leaning has lost his job and is in the process of settling a rolling contract.
Under-16s coach Leigh Bromby is also understood to be leaving his position at Thorp Arch after the club opted not to renew his deal.
Leeds, however, are in the process of making a stream of additions to their first-team squad with the new season four weeks away.
The club have already finalised the signings of goalkeepers Stuart Taylor and Marco Silvestri and midfielder Tommaso Bianchi.
Swiss defender Jonathan Rossini trained with United at their pre-season camp in northern Italy today ahead of a move from Italian side Sassuolo, and Catania forward Souleymane Doukara is expected to line up with the squad tomorrow with his transfer also pending.