End Game Nearing for Setanta?
June 7, 2009
In a story that we have been following since March, the UFC’s home for television in the UK Setanta Sports is nearing a point of seeking administration, a move that would most likely doom the future of the broadcaster:
Deloitte, the accountant, is on standby to take over as the private equity-owned business struggles to close a funding gap of nearly £50 million. A board meeting on Saturday failed to achieve a breakthrough, raising concerns that lucrative television deals will cease both north and south of the border.
Setanta’s board will hold another crisis meeting today against a bleak backdrop. It has failed to persuade shareholders to produce more cash, or find a new investor or buyer for the business, which analysts estimate is losing £90 million a year.
The mood at Setanta has become increasingly gloomy over the past week as no answer to its problems has emerged. Its backers, led by Goldman Sachs, Doughty Hanson and Balderton Capital, have refused to offer more than £50 million of the £100 million needed to secure its future.
Setanta will officially go into default tomorrow on an £3m installment to the Scottish Premier League, which they most likely have but would not ending up paying if they are headed for administration anyway. Much more of a problem is the £35m payment that must be made to the English Premier League that is due June 15th, an amount that they look to be unable to cover. Various capital raises and cash for equity swaps look to have failed, an going into administration may be a pre-cursor to the possible shuttering of the company.
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