Sporting Lisbon in Talks to Buy Back Debt With Apollo Money
(Bloomberg) -- Sporting Lisbon is in talks to repurchase debt from its two largest lenders with backing from Apollo Global Management Inc., according to people familiar with the situation.
The Portuguese soccer club plans to borrow money from the U.S. private equity firm to buy back debt with a face value of about 250 million euros ($282 million) from Novo Banco SA and Banco Comercial Portugues SA, the people said, asking not to be identified discussing confidential information. It could buy the debt back at a discount to its face value, they said.
The two banks hired an adviser earlier this year to help seek new buyers for the debt they hold in Sporting Clube de Portugal and Sporting Clube de Portugal Futebol SAD, the entities that control the club.
Deliberations are ongoing and no final agreements on the terms of any deal have been reached, according to the people. Other bidders have also shown an interest acquiring the debt, the people said.
Some of the debt will convert into equity should it fail to be repaid, Bloomberg News reported in May, giving the chance for its holder to increase their equity stake in the club. Sporting Clube de Portugal holds 63.8% of the voting rights in Sporting SAD.
Representatives for Apollo, BCP and Novo Banco declined to comment, while a spokesperson for Sporting Clube de Portugal Futebol SAD wasn’t immediately available to comment.
Sporting Clube de Portugal Futebol SAD reported a net loss of 33 million euros for the year ending in June 30 compared with net profit of 12.5 million euros the previous year, according to a company report. Total debt increased to 310.6 million euros in the same period from 298.6 million euros.
Sporting Lisbon is one of Portugal’s Big Three teams, alongside FC Porto and SL Benfica. The club this year won its 23rd Primeira Liga title -- its first in 19 years. Founded in 1906, the club is a model soccer factory, discovering and developing young talent before selling these players on to bigger clubs of hefty fees.
Last year, it sold Portuguese international Bruno Fernandes to Manchester United FC in a roughly 80 million-euro deal. Its most famous export is perhaps Cristiano Ronaldo, who joined Manchester United in 2003 and has gone on to become one of the game’s greatest-ever players
Off the field, Sporting Lisbon and other Portuguese teams have struggled to fix their finances after years of mismanagement and a legacy of debt, dating back to the 2004 European Championships when clubs built expensive new stadiums. These issues have been compounded by the Covid-19 pandemic, which has seen stadiums closed to fans and corporate sponsors.
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