Leeds Plc down 29% after share sale postponed

SHARES in Leeds United Plc, who are bottom of the English Premiership, plunged 29% after the company said that a planned share sale won’t go ahead and that it may ask for court protection from its creditors if talks with them fail.

The stock, which has halved this year, dropped 1p to 2.5 pence at 12.55pm in London, cutting the company’s market value by about £3.5 million (5m).

The decline is the stock’s biggest since August, 1994.

The club last month posted a record full-year loss and said that it had plans to sell shares worth 6.3m in order to raise money to cut debt of more than seven times its market value.

Leeds put off the share sale and it is still talking with creditors and possible investors about a fundraising plan, the company said.

“Negotiations have failed to reach a satisfactory conclusion in time to issue a circular and obtain shareholder approval before Christmas,” the company said.

If the negotiations are unsuccessful, “the directors may be forced to seek the protection of an administration order”.

Deputy chairman Allan Leighton and Arm Holdings Group Ltd, a company owned by a Leeds investor, had agreed to buy new stock worth a total of 6.3m, the club said last month.

Leighton’s funds will still be available to the club, the company based in Leeds, northern England, said in today’s statement.

Leeds in August started talks with creditors to defer repayments on the company’s debt. Under ex-chairman Peter Ridsdale, Leeds amassed 111m of debt as it bought players such as Robbie Fowler.

The team twice failed to reach Europe’s Champions League, missing out on TV revenue, which fell 36% in the past year.