Bondholders agree deal to save Leeds from administration

Leeds United PLC, the struggling football club, was saved from administration last night after a deal was agreed in principle between the club and its bondholders, to release £4m (€5.70m) of working capital, according to reports.

The money representing about six months' interest on the club's bonds, is held within the company.

Under existing agreements with the bondholders it has been ring-fenced and so could not be used as working capital.

An official announcement on the deal could come as early as today.

The money will give the club up to six weeks grace and allow it to continue to search for additional funding.

Deputy chairman of the club, Allan Leighton, pledged £2.2m (€3.13m) in the form of a loan.

Sheikh Abdulrahman al-Khalifa, a member of the Bahrain royal family and long-term Leeds fan, initially pledged to invest £2.2m (€3.13m) in addition to this money, in return for Leeds shares.

But when Leeds failed to strike a deal with the bondholders before a deadline set to ensure shares could be issued in exchange for the cash injection, it became unclear whether the Sheikh's offer still stood.

Leeds said it had yet to receive any bid from Sheikh Khalifa.

Leeds recently announced record full-year losses of £50m (€71.36m) and has debts £80m

(€114.18m).

Last week, the club said it could be forced to go into administration if talks with its bondholders failed to reach a resolution.