Leeds United Owners Put In The Spotlight: QA
In response to a request for an interview with GFH Capital's David Haigh and Salem Patel, the YEP was asked to submit written questions about their plans for leeds united. Here are their replies: Questions compiled by Phil Hay
Q: In the press release of September 25, 2012, GFH spoke about how they were going to “lead and arrange” the takeover. Many took that to mean you were working in tandem with other investors. Did that change? And if it did, was there a time when you had second thoughts about continuing with the purchase?
A: It did not change. We are an Investment Bank and our model is to bring investors to investments.
Q: Where is your funding coming from? Are suggestions that you have a wealthy backer inaccurate and was that ever the case at any stage of takeover negotiations?
A: The acquisition of the club and injections of working capital have come from GFH Capital’s own resources and that of several of its clients.
Q: Is it correct, as reported on Saturday, that you are willing to consider offers of investment for a 30 per cent stake in Leeds United?
A: We are an Investment Bank and as discussed at our first meeting, we are seeking strategic investors.
Q: What are your reasons for looking to sell 30 per cent of the club?
A: As above, we are an Investment Bank and as discussed at our first meeting, we bring investors to investments. This has never been any secret.
Q: If investment on that scale is not found, do you have the resources to take the Leeds United forward regardless or will it leave the club under significant financial pressure?
A: No, it won’t. While we have the funds to take the club forward without the need for additional investors, we are of the belief that building a strong consortium of strategic investors will better serve and protect, and build our great club.
Q: Are you open to or actively seeking offers to buy either a majority stake or a 100% shareholding in Leeds United?
A: We are not open to or actively looking to sell 100%. We consider the club to have very good potential and wish to benefit when that potential is realised.
Q: Can you confirm whether an offer for a majority stake in Leeds United (as confirmed on the club’s website) remains on the table? Or has it been rejected?
A: It has been rejected.
Q: What investment has GFH Capital made in Leeds United so far?
A: The figures are confidential.
Q: When we spoke on December 21 after the press conference to confirm the takeover, you mentioned that cash flow was a worry. How will you be able to rectify that in the short and long-term?
A: Cashflow is an issue at most football clubs, simply due to the nature of the business.
Q: How has the day-to-day running of Leeds changed since December 21 and what further changes do you envisage over the coming months?
A: For most members of staff there has been no change yet, but we are slowly trying to impose a more corporate structure on the club. We are also still continuing with our review and, as a result, there may be further changes in the future.
Q: Have there been many surprises in the two months since taking over? And if so, what were they?
A: Not really surprises as such, but this is a unique industry. I suppose the biggest surprise, and given the fact we attended a number matches before taking over it shouldn’t be, is the level of support and how deeply people care about the club. This has been apparent both with the fans – the show of support at the Etihad was amazing – and with the staff, the majority of whom are here because of the club and are fans themselves.
Q: You said in an interview with the Guardian that building projects at Elland Road have negatively affected the club’s financial state? Is that the case and do you feel that those building projects were a mistake?
A: We don’t feel they were a mistake as such, but we would not have chosen to undertaken them at the time that they were done. That said, the club now has a stadium that is ready for Premier League football.
Q: Were you aware of the exact burden and cost of those building projects prior to your takeover i.e. once due diligence was complete?
A: Yes. The due diligence process gave us a clear view.
Q: Much has been made of the financial position of Gulf Finance House (GFH Capital’s parent company). You’ve said before that you’re a different company with different balance sheets but clearly you’re 100 per cent owned by Gulf Finance House so if the bank encounters severe problems then so would you. Can you outline Gulf Finance House’s financial position as you understand it and explain why recent years seem to have been a challenge for the company?
A: You need to wait until Thursday/Friday when q4 financials (Gulf Finance House’s results for the last quarter of 2012) are published for a better picture. Like any bank in the world, GFH has suffered due to the global financial crisis, but we think GFH has done better than a lot of others in trying to recover from that.
Q: Eight weeks on from the takeover, can you outline GFH Capital’s motivation for investing in Leeds United?
A: It’s the same as what was said on the day of the takeover – this is a great club with relatively little debt and huge potential.
Q: Are you speaking to Neil Warnock about what is going to happen with regards to the manager’s job? In Saturday’s Guardian, you spoke of wanting a younger man to come in and that suggested a change is on the way.
A: We speak to Neil regularly and as you know his contract expires at the end of this season.
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