While rumours have been circulating about the nature of GFH Capital’s interest in Leeds United since the end of last season, official negotiations only began a month ago.
More recently, statements from club and company spokespeople have ardently declared that a deal is ‘close’. Despite this, ongoing media coverage and financial reports of the Bahrain-based parent company, Gulf Finance House, suggest that the corporation’s fiscal power may be the factor holding up proceedings.
Indeed, the club is valued in the region of £52 million pounds, but GFH Group as a whole held only $6 million in the early months of summer, having suffered more than a quarter of a million dollars of accumulated losses. Far from quelling the worries of Leeds fans, Capital, the affiliate running the takeover, suffered losses in 2009 and 2010, returning just a $381,000 profit in 2011 – little more than the fee paid to SK Brann for Rodolph Austin over the summer.
However, confirmation that the company has already contributed some £2 million of investment prior to negotiations – helping to seal the signing of Luke Varney and increase salaries for Aidan White and Ross McCormack – would contradict these claims, as would recent statements from the club’s would-be chairman David Haigh. He said, “The financials are the parent company’s not ours. With the money in place we are poised to make this deal happen, pending agreements and arrangements which are in the interests of the future of Leeds United – we need to make sure all the finer detail is addressed before trading signatures”. This statement would suggest that there is now very little to stop the deal from going through, so what of the company’s previous projects?
Considering that Haigh described Capital’s original business plan as, “Mega real-estate investments in the Middle East and Dubai”, it would seem safe to assume that they have experience in seeing projects through. However, other than their flagship Financial Harbour project in Bahrain, resulting in something of a deluxe financial city, similar projects taken overseas have yet to reap rewards of their expertise.
Investments made in Libya, Mumbai and Tunisia since 2007 are said to have made minimal progress, and insufficient financial strength was cited in the rejection of the company’s $75 million bid for Adabank in Turkey earlier this year. If applicable here, such measures against the company are not being foreclosed by the negotiating parties in this case, as both Haigh and current chairman Ken Bates become more and more positive about reaching a conclusion. Unfortunately for fans, light on when to expect completion, and what to expect afterwards, remain a mystery.
Author: Jamie Kirby
Leeds United take on Watford at Elland Road this Saturday. Kick off, 3pm.