Newspaper article The Evening Standard (London, England)

It's Russian Roulette at Stamford Bridge; Chelsea Sensation

Newspaper article The Evening Standard (London, England)

It's Russian Roulette at Stamford Bridge; Chelsea Sensation

Article excerpt

WHETHER you see Roman Abramovich's takeover of Chelsea as a piece of effrontery or great news, the execution was dazzling.

Serious talks only began on Thursday and by last night - little more than 100 hours later - he deed was done. His offer of 35p a share values the club at [pounds sterling]60million. But that's only the start of it.

By the time the debts are paid off and the promised money made available for new players it could end up costing him [pounds sterling]200m . . . and that's just for starters. An awesome amount of money for most of us; for Abramovich, rumoured to be worth more than [pounds sterling]4billion, mere bagatelle.

Why did this 36-year-old tycoon, who jets around the world in his own 767, and will be arriving here again today, but who speaks little or no English, decide on Chelsea?

Serendipity.

He looked at Manchester United and deemed it too expensive. He came to London, looked at Spurs and Arsenal as well as Chelsea, and chose the Bridge.

What impressed him most about Chelsea, which he visited, was the quality of the facilities. Plus of course Chelsea's Champions League place, and the club's availability.

There's no doubt for Ken Bates, who stays on for an undisclosed period as chairman, that Abramovich's offer came at just the right time.

Chelsea never were a Leeds, as I have repeatedly made clear in Standard Sport. Chelsea had tangible assets whereas Leeds had none. But Chelsea still had real financial problems which had nothing to do with the long-term health and prospects of the business, but everything to do with short-term cash flow.

Servicing a [pounds sterling]75m Eurobond at a whopping 9 per cent was costing the club more than [pounds sterling]7m a year. Then there was a further [pounds sterling]23m - a [pounds sterling]5m debt to Royal Bank of Canada and an [pounds sterling]18m debt owed to a consortium led by Barclays - due for repayment or rescheduling this very month.

The Eurobond conditions were also onerous in terms of what the directors could do with the property assets, further limiting their room for manoeuvre.

A full-scale financial restructuring had been on the cards for months, but it had become increasingly obvious that doing this through conventional means at a bad time for football was going to be difficult and protracted. …

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