Fulham cash strapped?

last updated Thursday 09th May 2013, 1:21 PM

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Cash-strapped Fulham have been bailed out to the tune of £16 million by a secretive offshore company as the Craven Cottage outfit attempts to plug a huge hole in its finances.

Despite being on course for a mid-table finish in the Premier League for a second successive season, the Cottagers - owned by Mohammed Al Fayed - have seen their fortunes deteriorate dramatically in recent times.

According to its latest set of accounts, Fulham made losses of £18m in the 2011-12 financial year - that's almost 25% more than its £74m turnover.

It is understood the situation hasn't improved during the last 12 months.

Al Fayed's problems would appear to have been resolved in the short-term thanks to a loan brokered between the south London club and the little-known Vibrac Corporation, which is based in the British Virgin Islands.

But the details of the draconian financial arrangement brokered on 16 April and uncovered by SportsDirect News, are likely to raise eyebrows among supporters, not least because:
  • Fulham have been forced to take out a mortgage on all the properties the club owns, including Craven Cottage.

  • Vibrac Corporation have first call on the £50m Fulham will receive next season from the Premier League's broadcasting deals.

  • In the event that Fulham default on a repayment, Vibrac Corporation have the right to appoint a receiver "without notice".

  • Officials from the lender have been granted "free access. to inspect and take copies of, and extracts from, the books, accounts and financial records" of the club.

Nobody was available to comment on the arrangement when SportsDirect News contacted the club.

But a well-placed senior source, who worked at Fulham for several years and was a trusted confidante of al Fayed, revealed: "You don't take out these kind of deals if everything is fine and dandy.

"These types of lenders are for emergencies only. You usually use them when all other options, such as your bankers, have been explored and declined."

Fulham have done nothing wrong in choosing to borrow such a large amount from Vibrac Corporation, which is based in Tortola, capital of the Virgin Islands. In recent seasons, the likes of West Ham United, Southampton and Everton have all been forced to call on its services.

Yet companies like Vibrac Corporation are notorious for the veils of secrecy they operate under and the rates of interest they charge, which are far higher than those offered by respected high street lenders.

Although transparency has improved in recent years, government bodies like Her Majesty's Revenue and Customs still experience major difficulties in identifying the ultimate ownership and beneficiaries of these types of organisations.

The arrangement raises more questions than answers and puts the £15m deal brokered last month between Queens Park Rangers and the Hong Kong branch of Barclays Bank into perspective.

"Everyone knows that going to the Far East for some cash is unusual," added the Fulham insider. "So what are they going to think about this arrangement?"

Source Tony Yorke at SportsDirect
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