The Espai Barça will generate the payment of an annual debt of 94 million

2023-04-27 14:07:59

He Barça will pay an average net interest of 5.53% (around 5.8% gross) during the remodeling phase of the Camp Nouaccording to the terms of the agreement sealed this week with 20 investorsled by US financial institutions Goldman Sachs y JP Morgan. The annual debt service of this operation, the ‘Espai Barça’, which amounts to 1,450 million euros, will be around 94 million, which will be deducted from the expected income of 347 million once the culé coliseum has been completely remodeled in 2026. The entity reserves the possibility of refinancing a part of the project, for about 1,000 million, to make it cheaper in the next 10 years. The operation begins with 375 million bank loans and the rest will be bond issues until 2050.

???? Joan Laporta: “The works will not entail costs for the members, they will have no risk for sports management and the Club’s assets will not be mortgaged as a guarantee” pic.twitter.com/HWCV0wQ7DV

— FC Barcelona (@FCBarcelona_es) April 27, 2023

The economic vice president, Eduard Romeo, has explained that the board has managed to comply with all the mandates of the assembly of members. That is to say, the ‘Espai Barça’, whose cost amounts to 1,450 million, will be paid with additional resources obtained by this project, with fixed interest rate without exchange rate riskscon flexible structurethe cancellation of the outstanding bridge loan with Goldman Sachs, amounting to 180 million, and without mortgaging the club’s facilities.

Romeu, who has described the “spectacular” operation and has affirmed that “nobody else has had the nose to do it”, has specified that the project, in addition to the stadium, for 1071 million, includes the Palau Blaugrana, without having yet awarded the work or detailing its cost. The corporate director, Maribel Meléndez, has ensured that the project has been achieved despite the environment of interest rate rises and the information about the ‘Negreira case’ “thanks to the Barça brand”, as well as the determination of the board of directors, the work of the entire team and the “anticipation”. He has ensured that even during the process some investor “has become a partner.”

The financing structure agreed has three sections. The first, of 583 million, of which some 375 will be through credit bank, to repay in full in five years. The rest will be through the issuance of debt. The second tranche, of 477 million will be on issuance terms of seven and nine years; and the third, of 390 million, in terms of 20 and 24 years.

According to the terms of the agreement, the first two tranches have the door open to the refinancinghoping that Throughout these 10 years, market conditions improve and the financial cost can be reduced. This will be possible especially once the risk of construction on the part of at the Turkish company Limak. In total there will be about 375 million in bank credit and more than 1,000 million in bonds through private placement.

And how will it be paid? A securitization fund (conversion of debt into bonds) managed by Intermoney has acquired the collection rights and the debt and will pay only interest. This fund will be nourished by 24% of the ‘hospitality’ area; another 24%, from sponsorship and title rights, another 15% from museum income and visits; 22% for tickets and restaurants and 15% for events and meetings. Romeu has assured that an increase in the price of season tickets is not expected.

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This fund is the one that will receive the 1,450 million as of May 31. It is from the delivery of the stadium, scheduled for 2026 (26-27 season), when the club must generate an additional 247 million a year, up to 347 million (currently it generates about 180 million a year), without counting the sponsorship of Spotify, which they do not detail. Of this sum, some 100 million will go to the club’s coffers, to which the excess of 147 million will be added, that is, another 153 million. The rest will go to the fund that pays the debt.

A daily penalty of one million euros for failing to comply with Limak

Given the doubts raised by the award of the construction of the stadium works to Limak, the corporate director, in addition to the bank guarantee of 10% of the total work, the withholding of another similar percentage and the signing of a compensation of one million euros per day per day of delay on the agreed date, he analyzed his experience in finishing projects on time, in large projects and in the fact that for this company these works are “a strategic commitment”. In fact, meeting these deadlines is one of the pillars of the structure of this financing scheme.