Bahrain investment firm confirms to Dubai's stock exchange it has agreed to sell part of its stake to British investors.
Gulf Finance House to sell partial stake in Leeds United
Gulf Finance House confirmed it has agreed to sell a partial stake in England’s Leeds United Football Club to a consortium of British investors after shares surged almost 15 per cent on Tuesday.
“Investors are currently in their final stage to fulfil their subsequent obligation to complete the transaction and obtain approval from the English Football Association,” the Bahrain-based investment firm said in a statement yesterday.
GFH did not provide the value of the transaction or the size of the stake sold.
The firm bought the football club in December 2012 through its subsidiary GFH Capital, based in Dubai, but has since sold some of its holding, its financial statement has shown.
Shares of GFH on Tuesday rose 14.8 per cent, almost touching its one-day price limit, on record volumes of 820 million to close at 76 fils.
The statement by GFH was in response to a request by the Dubai bourse to provide an explanation for its unusual trading activity.
“Apart from this, there has not been any material event that has occured [or material information] which could have triggered such high volume trading.
Shares fell 2.8 per cent yesterday to close at 74 fils on the Dubai exchange.
Gulf Finance House is seeking to turn around its business after it was hit hard by the 2008 global financial crisis. The company has made public its plans to become more involved in its investments and to hold on to its projects till completion, Hisham Al Rayes GFH’s head told Reuters last July.
The company made $343.3 million in profits in 2007 and $291.9m in 2008. But the crisis soured appetite for GFH’s assets, triggering a loss of $728.4m. With financial commitments of more than $2 billion, GFH was forced to restructure its finances, some of which were more than once to avoid a default.
Mr Al Rayes in July said that the investment firm was aiming to turn Leeds into a sustainable franchise.
“I would like Leeds to reach that stage as well … but you can’t just do changes overnight, you have to do it smoothly. Overall we are looking at the enhancement of operations and enhancement of results,” he told Reuters.
Investors are torn about how they saw GFH’s financial future.
“They are trying to do a fresh start,” said a Dubai-based trader who did not want to be named.
“But the question that needs to be answered is, will this model work for sure? That’s something that remains to be seen.”