Leeds left on the brink after Sainsbury takeover bid collapses

LEEDS UNITED again stand on a financial precipice after Sebastien Sainsbury’s proposed takeover finally collapsed last night.

Sainsbury has still not given up all hope of saving the club, but following his decision to pull out of a potential £25m buy-out, Leeds stand on the brink of administration, potentially within the next three months.

Despite the current board, led by chairman Gerald Krasner, having reduced debts from a staggering £104m to around £25m during the 10 months of their tenure, the club continue to haemorrhage money at an alarming rate.

It is understood given Leeds’ current liabilities, it would take £40m to stage a takeover, but more shocking is the fact the club will lose £10m over the next six months.

Such losses have resulted in Sainsbury’s backers withdrawing their funding, much to the bitter frustration of the 42-year-old great-grandson of the supermarket founder.

“I am really depressed.

“I really wanted to get something done for the sake of Leeds United and their fans and I am sick to my stomach that I have not been able to do so.

“But upon completion of due diligence by our potential funders, the true scale of Leeds United’s debt and liabilities have become clear.

“It was obviously more than we, they, and many others had envisaged.”

Sainsbury first became involved more than three months ago, at the time assisted by an American consortium known as Nova Financial Partners, only for their bid to ultimately end in failure.

Leeds supporters were dealt a double-body blow on that day in November as Krasner announced the £8m sale-and-leaseback of Elland Road.

That came weeks after a similar £4.2m arrangement on their Thorp Arch training complex, with the funds from both deals used to pay existing debts.

Since then, Leeds have been forced to defer a £1.2m payment owed to the Inland Revenue and given their dire straits, it is understood Krasner has put contingency plans in place should administration occur.

Sainsbury, though, remains hopeful he can play a part in sparing Leeds the ignominy of administration, or even a winding-up order, which would result in an automatic 10-point deduction by the Football League and with it a battle to avoid relegation. from the Coca-Cola Championship.

Krasner’s only alternative is to turn to Leeds-based property developer Norman Stubbs, who has long courted the club with a potential investment, albeit one which falls short of saving United from administration.

Leeds will now be desperate to do a deal with either Chelsea or Liverpool for young goalkeeper Scott Carson. The club have met representatives from both sides over the last 24 hours and although no deal has been finalised Leeds could push through a transfer as they are in need of the funds it would bring.