Tottenham Hotspur have today announced a new deal to secure an additional £400 million to complete the construction of their new stadium.
Spurs took to their official website today to announce a new financial scheme to fully fund the construction of the new stadium, which is set to be complete by the 2018-19 season.
A five year deal with Bank of America Merrill Lynch International Limited, Goldman Sachs Bank USA and HSBC Bank PLC will see Spurs utilise a further £400 million spending pot on the construction of a stadium now costing up to £900 million altogether.
This deal replaces a £200 million interim financing that was established in December 2015, of which 50% has already been used. Roughly £340 million has already been spent by the club on purchasing land and an expensive planning and permissions process as well as the current construction work underway. All remaining costs of the project will be funded by the new deal announced today.
HSBC has offered an extra £25 million whereas, the ENIC group has also pledged £50 million to ensure the project’s completion. The five year deal is explained in the statement as such:
“The Facility [£400 million bank facility] has a term of five years, with no early repayment penalties or amortisation requirements and no material financial covenants until the stadium opens. The loan is secured against the new stadium and related commercial and match day revenues.”
Tottenham’s Director of Finance and Operations, Matthew Collecott, also commented:
“We are delighted to have three of the most prestigious and globally recognised banks supporting us. We look forward to continuing our relationship with them and our main contractor Mace as we move into the final stages of our journey to deliver the catalyst to one of London’s largest regeneration projects.”
In a nut-shell, Spurs had already spent nearly £400 million on the construction of the new stadium already, through their own spending power and a smaller bank loan, but had not yet secured the funding required to finish the project. Today, they have, in signing the 5 year deal with the 3 reputable banks. Also, the club are expected to double the annual match-day revenue to £100 million, when opening the new stadium, which will largely contribute to repaying the debt.
However, Collecott also insisted that the deal would have no implications on Tottenham’s transfer policy. As reported by Bloomberg, Collecott revealed that the budgets for the new stadium and for pre-season transfer funds are entirely independent. He said:
“This is not going to touch the football, these are very separate budgets.”
In addition to this, the deal does not include any funding for naming rights of the new stadium. It appears no contracts similar to Arsenal’s Emirates Stadium are nearing fruition. So, although Spurs are now all set to complete the construction of the new stadium, we still have no idea what it’s going to be called.
Have something to tell us about this article?