Esporta Parent Company Goes into Administration
More woes for owner of troubled Riverside Club
The troubled Esporta group looks set to change hands once again as the current owner is finding it difficult to raise finance during the recent stock market downturn.
Syrian property developer, Simon Halabi, whose company acquired the chain of sports clubs less that a year ago, had appointed Lazards earlier this month to try to put together a rescue package to stop the group from going into administration. However, after a reported breakdown in the relationship between him and the principle financial backer of his group, Société Générale, the administrators have now been called in.
Analysts believe that the basic operating business remains sound despite the continued absence of revenue from the Riverside Club. The financial troubles of the group are unlikely to lead to the closure of any the clubs owned in the locality although it does put a question mark over the schedule for the rebuilding of the Riverside.
Halabi is reported to have had grandiose schemes for the rebuilding of the Riverside Club which included raising the exterior tennis courts on a mound so that members could see the Thames as they played. Press reports also suggest that he had asked management to look at substantial increases in membership fees.
The £480 million paid by Mr. Halabi for the group was too high by many estimates and he faces a loss of over £100 million. There is speculation that Neil Gillis the former CEO will be returning to run the business. The 55 clubs in the group will be auctioned and a sale is likely to be announced in the next few weeks. Several private equity groups are reported to be interested but the price is likely to be in the range of £300 million, well below the £330 million of loans Mr. Halabi's company took out to acquire the company.
August 18, 2007