Dubai’s Leeds Utd Owner Sells More Than Half Stake

The Dubai-based investment firm that bought English soccer club Leeds United in December after lengthy negotiations sold more than half of its 100 per cent holding less than six months later, financial statements show.

GFH Capital, a subsidiary of Bahraini Gulf Finance House, offloaded a 10 per cent stake to Bahrain-based International Investment Bank earlier this year and its second quarter financial statement showed it had now sold a total of more than half the shares.

The statement did not say who the buyer was, specifying only that it had made a gain of $776,000 on the sale and was now deconsolidating Leeds results from its own. GFH could not be reached for comment on Thursday.

The company paid 52 million pounds ($80.4 million) last year to buy Leeds from previous owner Ken Bates, reported by British media to have been sacked as lifetime president of the club in July over his use of a private jet to travel to matches.

The club’s website lists shareholders of Grand Cayman-based LUFC Holding Limited – owner of Leeds City Holdings Limited, which in turn owns the club – as GFH Capital, International Investment Bank and Envest Limited.

Envest is owned by Salah Nooruddin, who replaced Bates as chairman, and his wife.

GFH, which had already booked a $10.4 million profit on the Leeds deal in its 2012 financial statement, said in April it had offers from several investors for stakes in the club.

The company has been forced into a number of debt restructurings as well as a major overhaul of its business model since 2010 as it struggled in the aftermath of the global financial crisis.

It made a profit of $4.2 million in the first half of the year, its financial statements showing that this was mainly possible because of a $52 million gain from converting a type of Islamic financing security into shares.

On an operating level, the group lost $13 million, the cash flow statement shows, while the balance sheet reports accumulated losses since establishment of $379 million.