Soccer-Barcelona close $1.6 billion deal to finance stadium revamp

Sixth Street Specialty Lending

24/04/2023 19:21

April 24 (Reuters) - FC Barcelona have secured a
financing deal worth 1.45 billion euros ($1.6 billion) that will
enable the club to renovate its iconic but outdated Camp Nou
stadium and its surroundings after having renegotiated the
initial terms, they said on Monday.
    Barcelona added that they signed the agreement with 20
investors, including Goldman Sachs  GS.N  and JP Morgan  JPM.N .
    The Spanish club are set to pay back investors in
progressive tranches - after five, seven, nine, 20, and 24 years
- with a flexible structure, including a grace period.
    This means Barca will finish repaying the debt six years
earlier than previously agreed, after renegotiating what was
initially a 35-year deal approved in a referendum of club
members in 2021.
    "The club will start to repay the operation once work has
been completed on the stadium, using income generated by the
Spotify Camp Nou, which is forecast to be around 247 million
euros," Barcelona said in a statement on their official website.
    The club added that they would hold a news conference to
give more details on the financing deal in coming days.
    The announcement comes 24 days after the previous deadline
to reach a deal, March 31, elapsed. The club said at the time
that negotiations were still ongoing.  
    The preliminary debt structure has since been revised, the
Kroll Bond Rating Agency (KBRA) said in reports published on its
website.
    KBRA said the revised structure included additional
refinancing and interest rate risk. As a result, it had
downgraded the financing plan's rating from BBB+ to BBB, making
it less attractive to investors.
    Later, KBRA said it had converted its preliminary rating to
unpublished from published at the club's request. 
    Camp Nou is the largest football stadium in Europe and the
fourth-largest in the world by capacity, with 99,354 seats. 
    But Barcelona have said it no longer offers a full match-day
experience for fans. 
    The club estimates that the revamped stadium will allow them
to generate more than 200 million euros of additional revenue
annually through sponsorship and naming rights, ticketing,
catering, VIP boxes, hospitality, meetings and events. 
    Turkish construction company Limak has been tasked with the
renovation, with works set to begin in June.    
    Club president Joan Laporta, who presided over one of
Barca's most successful periods from 2003 to 2010, was
re-elected two years ago after the previous board resigned due
to the club's worsening finances and other issues.
    Laporta inherited a club deep in financial crisis
exacerbated by the COVID-19 pandemic. Since taking over, he has
tried to improve Barca's financial situation, turning the club's
assets into cash and bringing in new sponsors.
    In March 2022, the club signed a shirt and stadium
sponsorship deal with audio streaming platform Spotify  SPOT.N  
in an agreement worth 280 million euros.
    Barcelona have also agreed to sell a 25% stake in their
LaLiga TV rights for the next 25 years to U.S. private equity
group Sixth Street  TSLX.N  for 607.5 million euros and approved
the sale of a minority share of their audio-visual division to
Socios.com and Orpheus Media for 200 million.
    ($1 = 0.9055 euros)

 (Reporting by Fernando Kallas in Jerez de la Frontera and
Corina Pons in Madrid; Editing by David Latona and Ken Ferris)
 ((Fernando.Kallas@thomsonreuters.com))