Banker speaks on Leeds takeover

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Banker speaks on Leeds takeover

Postby leedshippriest on Thu Oct 04, 2012 11:45 pm

Here is the full transcript of @HishamAlrayes' interview from CNBC Arabiya in English. Very interesting stuff. #lufc

It's a good translation but maybe not 100% perfect...

Hisham Alrayes: Leeds United is, as you are aware, a massive club with a massive fanbase and has a great reputation in the past and was able to win many titles in English football. We didn’t view the club only due to its name, stature, or to its fanbase but these were only some of the factors. The club today enjoys the qualities and specialties which led us to take the decision to invest in Leeds United.

Presenter: Talk about the Role of GFH in purchasing Leeds United and will it hold a stake in the club, once the purchase goes through or is it only preparing this deal?

Hisham Alrayes: Of course G Capital is owned by GFH and G Capital was in discussions and a memorandum of understanding and a non-disclosure agreement has been signed, to organise the deal, as well as manage the takeover of Leeds United. Of course today this deal is being prepared by the company itself and a group as they say a "small club of investors" who are there today with GFH to finalise or to complete the takeover of Leeds before the end of the year.

Presenter: There has been a lot of talk and gossip lately that Leeds United has a lot of debt - is that true? And if it is in debt what's the total debt of the club?

Hisham Alrayes: Today Leeds is debt-free, back in 2004 the club had lots of debt. This led the club to sell a lot of players and as we know went down the leagues. The current administration and club leadership has been able to provide diversified income and has been able to meet all obligations. The financial health of the club is very good in comparison with other Championship or even Premier League clubs. Our target was to get into a club which was in a good financial position and Leeds was that club plus it's debt free and its total revenue reached up to £30million in 2011. Furthermore it has diversified income and with the media rights being increased in the Premier League, reaching the Premier League will cause a leap in the club's revenue. So this makes it a great investment for anyone entering into this deal.

Presenter: What are the chances of Leeds United reaching the Premier League? And if doesn’t reach the Premier League does this mean that the expected return of this investment is threatened and the investors will not gain a "pleasing" return from this investment?

Hisham Alrayes: Today, Leeds United is one of the few teams in the Championship that are profitable or their net profit is reasonable. If the revenue from ticket sales and from sponsorship it will increase the revenue from the club's market value. Today the club's market value is around £50-60million and if the club reaches the Premier League then the market value will increase because the clubs today in the Premier League are valued around £150-200million according to the market valuation. The media rights, which were increased in the recent past are estimated at £60million so made the clubs in the Championship a very good investment and made people scramble, either for clubs in the Premier League. But the Premier League has its own circumstances and debt and bigger costs but at the Championship level you can purchase a club at a reasonable value and advance its value, as we call it from an investment side, growth capital, where you take it from a level to another level. And I think it's one of the most or best investment which has been studied and carries a risk which is not high for an investor.

Presenter: For the club to reach the Premier League, it surely needs spending money as the club might need to purchase new players for instance. Do the current investors, who are willing to take over the club, have the ability or are willing to invest in the club in order to reach the Premier League.

Hisham Alrayes: Of course according to the plan, there is a budget put in place to invest plus the original investment for buying the club, but the good thing is that Leeds, today, you come to the stadium, which has been improved and renewed recently, so you won't be paying money for that, like you will do with other clubs. Furthermore, for example, if you want to improve the team and buy new players, you won't be paying like or equal to that you'd have to pay if the team was in the Premier League. One player in the Premier League would cost you around £5-6 million but in the Championship the payroll of the whole team might not be more than £5million.

Presenter: Another question, which is important, what effect would this deal have on GFH and its investment fund in general, plus how does GFH expect it to effect its revenue in the foreseeable future.

Hisham Alrayes: Of course this deal and its nature has a new investment nature and diversifies GFH's fund. Today in the United Kingdom it is a club which has a big fanbase, it will increase the profile of GFH and GFH Capita, and this will lead to new investment opportunities and open the door for bigger investment opportunities and deal with different parties, who in the past we have dealt or have been dealing with.


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