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Abramovich loses 12 billion in a day

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Roman Abramovich has lost £12 billion on the Russian stock exchange, it was revealed today.

The owner of Chelsea FC has seen his fortune dwindle as Russia's Micex Index has gone into freefall.

The decline in value of two of his companies on the Moscow-based index, steel maker Evraz and mining company Highland Gold, has left the 41 year-old tycoon $20.3 billion (£11.9 billion) out of pocket.

The staggering loss was revealed today by analysts who said it represented a decline in the equity value of traded companies.

Abramovich's woes come on a disastrous financial day for London's Premiership football clubs with the owners of Arsenal and West Ham also suffering.

Arsenal FC's part owner Alisher Usmanov has lost £7 billion ($11.7 billion) on the Micex index which has declined 61 percent since its peak in May and was closed today for the second time this week.

The metals and mining mogul and Abramovich are part of a list of 25 Russian oligarch's who have lost £140 billion ($238 billion) on the Micex index.

The country's ailing economy has also been hit by war with Georgia and foreign capitalists withdrawing billions of pounds worth of investment from a nation facing a period of instability.

West Ham were plunged further into crisis as it was revealed that the east London club's Icelandic owner Bjorgolfur Gudmundsson is considering selling the club after losing £230 million in the country's own economic crash.

Abramovich's unprecedented loss will set alarm bells ringing in the football world and the City.

It comes after Chelsea chairman, Bruce Buck suggested this week that the club could sell players to survive the financial turmoil.

He said: “Even with a benefactor like Roman Abramovich, if we think revenues are going to go down a bit we have to look at our expense side to look for areas where it is appropriate for us to save money. That's actually a process we are engaged with at the moment.â€

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It's bad news all around.

But what strikes me is how co-ordinated it all seems.

Of course it started out with America, but especialy in America it started out a year ago and kept gaining momentum. All leading up to the elections. A bit too much coincidence for me.

This will be trying times for Chelsea and we'll see what they and their fans are made of.

They have made a lot of noise about the fact that their debt is 'soft' debt, because it is owed to Roman and not a third party, but it is still a debt. If Roman don't like his toy no more, he can claim those debts back - no matter what it takes.

I can only hope the Glazers future-proofed themselves against this kind of scenario.
*crosses fingers and toes*
 

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God....I'd rather not hear this sort of thing!

At least Chelski are suffering....eh? :D.........Its ruining the world this economy
downturn *****...:rolleyes:

As for the Glazers....who knows? We never see/hear them....(Which is a
BRILLIANT thing IMO
), so who knows how they stand?
 

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RedForceRising said:
I can only hope the Glazers future-proofed themselves against this kind of scenario.
*crosses fingers and toes*
I would think they would. Well, I would hope.

Despite what many people think about the Glazers, they are businessmen, and they seem to be pretty good businessmen at that. So I would be surprised if they didn't have everything in as solid shape as they could make it.

But it is bad times for football. But it is an example, I suppose you could say, about how dangerous foreign owners who don't have an emotional bond with their clubs and use them as a toy are. If Abrahmovich decides that the best thing to do, in this economic climate, is to jump ship, Chelsea are in trouble.

Yes, someone else may come to their aid. But that will also probably be a foreign owner with no emotional bond.

That may sound good for us. But if you think about it, clubs struggling financially is not good for football long-term.
 
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RedForceRising said:
I can only hope the Glazers future-proofed themselves against this kind of scenario.
*crosses fingers and toes*
One would like to think so, but without knowing any backroom dealings, here's where the original funds came from.

New York-based hedge funds Citadel, Och-Ziff Capital Management, and Perry Capital, between them contributed about £275m to the Glazer takeover.

The three hedge funds bought preference shares issued as part of the takeover. Glazer will pay interest on the shares, and has the option of buying them back at a later date.

Glazer's bid was also financed in part through a £265m bank loan.

£275m was the original amount of hedge funds debt in May 2005. There was a subsequent refinancing in July 2006 when the amount of hedge funds debt was reduced in half, but the overall debt (bank debt + hedge funds) ended up being increased.

Red football ltd were an aquisition company set up by the glazers solely for buying united. It works as an holding company, this meant all the debts could be placed in the name of the company rather than the glazer's family name. As for the hedge funds thats where the money came from for the initial takeover, the loans they got were then loaded onto united, or red football, they've all been changed so many times while the glazers have been trying to reduce there interest repayments over the past couple of years.

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Bear markets like this one and every other finally run out of steam .

anyone with a few bob should wait till thursday/friday of next week and make hay as premium stock that has been hammered will start rising in price steadily .

The billions pumped in by governments acts like someone pouring cold water into a boiling hot bath in that it will take a while to have an effect .

What started this was defaulting mortgage holders and fear of others in states . falling interest rates and falling fuel prices will start to in tandem with much lower house prices start to ease those fears .

Expect markets to yo yo till thursday then rise steadily before stable period .

Also expect further drops in interest rates by early 09 to have an effect .

There was a tonight programme about a year ago where a fella was stating that house prices would have to drop by 30 per cent over two years and everyone poo poohed it . if i can find it i will link to it .

http://www.guardian.co.uk/money/2008/jun/16/houseprices.mortgages

Bottom line is banks will now be better regulated against black swans.

Good god haggs stop talking sense and have another can of brew !!!
 

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manutd004 said:
But it is bad times for football. But it is an example, I suppose you could say, about how dangerous foreign owners who don't have an emotional bond with their clubs and use them as a toy are. If Abrahmovich decides that the best thing to do, in this economic climate, is to jump ship, Chelsea are in trouble.

Yes, someone else may come to their aid. But that will also probably be a foreign owner with no emotional bond.


That may sound good for us. But if you think about it, clubs struggling financially is not good for football long-term.

Possible, bu it would take someone really brave to buy a Chelsea with 600m debt. That's just the debt. The prospective buyer would have to pay Roman the club's value, which should be quite a high figure too.

I believe it's high time to protect the fans against this kind of instability.
 

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RedForceRising said:
Possible, bu it would take someone really brave to buy a Chelsea with 600m debt. That's just the debt. The prospective buyer would have to pay Roman the club's value, which should be quite a high figure too.

I believe it's high time to protect the fans against this kind of instability.
Yes, it is possible but not a certainty. Thats why I said may, and not will ;)
 

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ABRAMOVICH LOSSES PLAYED DOWN
http://www.football365.com/story/0,17033,8652_4299292,00.html





Roman Abramovich's advisers have played down suggestions that the Chelsea owner's fortune has been diminished following the stock market crash.

Reports suggested Abramovich had lost up to £12billion after losses on two of his investments - steel making company Evraz, and Highland Gold, a mining company.

However, a spokesman for the Russian, John Mann, is quoted in The Daily Telegraph as saying:

"The figure is just as arbitrary as those you see in Forbes every year and we don't put any stock by them."

The paper claims that the losses have been exaggerated by associates of the Russian, and in any case they are 'paper' losses, and his cash and property assets will not be affected.

Chelsea are currently indebted to the tune of £730million, around £578million of which is in the form of an 'interest free loan' from Abramovich.

Should Abramovich choose to call in the loan, the club would have 18 months to find the money.
 

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Considering that I thought Abramovich was worth around £7billion, the news that he has lost £12billion comes as a bit of a surprise!!!

It would be hilarious if Chelsea had to start selling players to repay the debt to Abramovich but I can't help but think that is just media blurb trying to stir things.
 
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