Barcelona signs $1.6 billion deal to finance stadium renovation

Finance


24 April (Reuters) – FC Barcelona has secured a financing deal worth 1.45 billion euros ($1.6 billion). This will allow the club to renovate the iconic but outdated Camp Nou stadium and its surroundings after renegotiating the original terms.

Barcelona added that it had signed deals with 20 investors, including Goldman Sachs (GS.N) and JP Morgan (JPM.N).

The Spanish club plans to repay investors in progressive tranches after 5, 7, 9, 20 and 24 years with a flexible structure that includes grace periods.

This means that after renegotiating an initial 35-year contract approved by a referendum of club members in 2021, Barca will complete paying off its debt six years earlier than previously agreed.

In a statement on its official website, Barcelona said: “As soon as the construction of the stadium is completed, the club will start using the proceeds from Spotify Camp Nou to repay its operating costs, which will amount to around 247 million. It is predicted to be the euro,” he said.

The club added that it plans to hold a press conference in the coming days to discuss details of the fundraising.

The announcement comes 24 days after the previous trading deadline of March 31st. The club said at the time that negotiations were still ongoing.

Kroll Bond Rating Agency (KBRA) said in a report posted on its website that the tentative debt structure has since been amended.

KBRA said the revised structure included additional refinancing and interest rate risk. As a result, the company lowered its funding plan rating from his BBB+ to BBB, making it less attractive to investors.

KBRA subsequently announced that it had changed its preliminary rating from published to unpublished at the club’s request.

The Camp Nou is the largest football stadium in Europe and the fourth largest stadium in the world with 99,354 seats.

But Barcelona have said they will no longer offer fans the full matchday experience.

The club estimates that the renovated stadium could generate more than €200 million in additional revenue annually through sponsorships and naming rights, ticket sales, catering, VIP boxes, hospitality, meetings and events.

Turkish construction company Rimac is undertaking the renovation work, which is expected to begin in June.

Joan Laporta, who presided over one of Barça’s most successful periods from 2003 to 2010, was re-elected two years ago after his former board resigned due to the club’s financial difficulties and other problems.

Laporta inherited a club in financial turmoil exacerbated by the COVID-19 pandemic. Since his appointment, he has tried to improve Barça’s financial situation by cashing in the club’s assets and acquiring new sponsors.

In March 2022, the club signed a shirt and stadium sponsorship deal with audio streaming platform Spotify (SPOT.N) in a deal worth €280 million.

Barcelona also agreed to sell a 25% stake in La Liga television rights over the next 25 years to US private equity group Six Street (TSLX.N) for €607.5 million and authorized the sale of a minority stake in the audiovisual division. His $200 million to Socios.com and Orpheus Media.

($1 = 0.9055 EUR)

Reported by Fernando Carras from Jerez de la Frontera and Corina Pons from Madrid. Edited by David Latona and Ken Ferris

Our standards: Thomson Reuters Trust Principles.



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