(Bloomberg) -- Eagle Football Holdings Ltd., one of the most active investors in football clubs globally, is seeking to borrow about $300 million to help repay part of a loan from Ares Management Corp. as part of a broader recapitalization plan, people with knowledge of the matter said.
The company is working with Toronto-Dominion Bank’s TD Cowen unit to gauge appetite from lenders including private credit firms, the people said, asking not to be identified because the information is private. At least some of the proceeds will be used to repay part of a roughly $500 million debt package that Eagle took out from Ares to support the takeover of French team Olympique Lyonnais, according to the people.
Eagle may also use some funds from the planned sale of its 40%-plus shareholding in Crystal Palace FC to help repay the Ares loan, some of the people said. The group said in September it had received multiple offers for the Crystal Palace stake.
The plans follow a busy summer for Eagle founder John Textor, after the US investor unsuccessfully tried to buy the Premier League’s Everton FC. The fundraising efforts by Eagle are ongoing and details of the financing could change, the people said. Representatives for Ares and TD Cowen declined to comment.
Recapitalization Plan
The move is part of Eagle’s efforts to raise a combined $1.1 billion in equity and debt to recapitalize its business. It’s planning to retire existing senior debt after raising funds through the sale of its Crystal Palace stake and a possible placement of long-term senior notes, Eagle said in a statement Tuesday in response to Bloomberg News queries. It plans to identify a finalist to buy the Crystal Palace shareholding in early November, according to the statement.
Under the recapitalization plan, Eagle aims to raise as much as $100 million selling shares in Eagle to pre-IPO investors and targets another $500 million from a planned initial public offering in the first quarter of 2025, according to the statement. Eagle has hired three investment banks for the offering and is poised to confidentially file for the listing in early November, it said. Eagle previously said it was planning to list its holding company on the New York Stock Exchange toward the end of this year.
Eagle is projecting more than $225 million of player transfer revenues in 2024/25, according to the statement. Revenue from Eagle’s Brazilian team, Botafogo, is expected to exceed $100 million in 2024 with the team leading the table this season, according to the statement. Meanwhile, at Olympique Lyonnais, the French team recovered from the worst start in its history last season to qualify for the Europa League competition.
Ares Debt Package
The debt package that Ares provided to the Eagle Football group in 2022 included a type of loan where the interest rate ratchets up over time, one of the people said. At the end of June, a publicly-traded Ares investment vehicle held a senior subordinated loan to Eagle Football with a 17% coupon as well a floating-rate loan paying 13.3%, or 800 basis points above the benchmark rate, according to US regulatory filings. That compares with the end of last year, when Ares listed a loan with a 16% rate as well as the floating-rate loan, the filings show.
Both loans were set to mature in December 2028 and are structured as payment-in-kind notes, which allow the borrower to make interest payments using more debt. Ares partners Mark Affolter and Jim Miller sit on the board of Eagle’s holding company, and the investment firm owns ordinary shares in the group as well as warrants to purchase stock, according to the filings.
Eagle’s holding company is overdue in publishing its financial accounts for the year through June 2023, according to the UK Companies House website. The group’s French subsidiary said last week it’s also postponing the publication of its results for the 2023/24 financial year, pending the completion of an audit of the accounts.
In Tuesday’s statement, Eagle said it has chosen to delay its UK filings after changing its financial reporting to comply with US accounting standards ahead of the planned IPO. The company said its French unit has been asked by its statutory auditors to more comprehensively document the change from international accounting rules to US norms, and it plans to release the accounts on Oct. 31.
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