Chelsea FC Owe Abramovich £700 Million
Thu 20th May 2010 | Money & Finance
Previous reports that Chelsea Football Club owner Roman Abramovich has written off his £726 million loan to the club by converting it into shares, does not paint a fully accurate picture, reports the Guardian.
Abramovich has channeled his loans to the club through a holding company, Chelsea Limited, since his buying into the club in 2003. While the loans from this holding company to Chelsea FC were converted to shares last year, Abramovich's loan to Chelsea Limited were not converted. So, technically that loan still stands and has grown because of the additional £25 million that Abramovich lent this year following Chelsea's expensive dismissal of Luiz Felipe Scolari and his coaching staff.
Chelsea Limited is now called Fordstam Limited, following an official name change, and its accounts show an £726 million debt owed to Abramovich. A Chelsea spokesperson said: "Recapitalisation of loans happened at the level of Chelsea FC plc, not the holding company (Fordstam), therefore making the football club debt free."
The club is debt free but the parent company is not. While the loan is interest free, it is repayable should Abramovich choose to give an 18 months' notice. The Russian billionaire can still opt to get his money back if he decides to sell his shares or when the club is proving profitable.
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