No Extension But Support Remains

Last updated : 27 February 2004 By Kevin Markey

United had a temporary agreement with its creditors which protected the club from demands for repayment. When this deal expired at 1400 GMT, Leeds asked the stock exchange to suspend trading in its shares.

It then told the exchange that "the existing standstill arrangements ... have not been formally renewed". Leeds had managed to persuade lenders to extend their deadline five times in the past two months. Another extention had been expected today.

"However, the Board confirms that it continues to retain the support of these major finance creditors whilst it seeks to finalise its negotiations with interested parties relating to a long term financial restructuring of the Group."

Leeds said it thought it appropriate for its shares to remain suspended while it seeks to avoid becoming the first Premiership club to go into administration, a form of creditor protection suffered by several lower division clubs.

The club now faces a race to find a buyer or a fresh injection of funds before a creditor makes a demand for repayment that it is unable to meet.

"The creditors are saying, 'Get a deal done because the next time a payment comes up and you can't meet it, obviously Leeds United will have to go into administration," Bill Gerrard, Professor of Sports Management and Finance at Leeds University Business School, told Sky TV.

One of two consortiums looking at Leeds dropped out on Thursday. The other, the group of local businessmen, said it was "the only realistic bidder for the club that has the credentials and the finances to save it from administration and possibly liquidation.

"We also see this acquisition as a long term investment that will establish the club as a viable business, going forward, regardless of whether it remains in the Premiership or the Nationwide League," it said in a statement today. "Our business plan is not dependent on Premiership survival."

Dropping out of the Premiership would cost Leeds about £15m to £20m.

Shares in the club last traded at 2.75 pence, giving it a market value of around £9.5m.