Exclusive: Chelsea sale could be smoothed by 'Brexit-style backstop'

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Exclusive: Chelsea sale could be smoothed by 'Brexit-style backstop' to solve loan impasse - Reuters
Exclusive: Chelsea sale could be smoothed by 'Brexit-style backstop' to solve loan impasse - Reuters

The £1.6billion stand off between Roman Abramovich and ministers could be unlocked by a Brexit-style backstop allowing the Chelsea sale to go through on time.

Government will prioritise pushing the Russian to write off the loans as promised, but there is also a willingness to eventually discuss an appendix to the club licence to stop it going under.

A backstop - like that agreed with the EU to stop a customs border with Ireland - would see ministers and Abramovich sideline their current feud to allow the sale to complete.

The potential solution has yet to be discussed with Abramovich, but his camp had already been confident a deal can still be completed, despite a tumultuous 24 hours in which he had appeared to renege on a promise.

Sources close to discussions say it was never his intention to leave Government with the impression he wanted to repay the loan to himself. A dispute seems to centre around whether the UK is legally entitled to freeze the loan. The Government believes there has been a shift in the Abramovich position in the fortnight. It was suggested a change in approach may have been triggered by authorities in Jersey swooping two weeks ago to target Camberley International Investments, an offshore account which is believed to be linked to Abramovich.

Nadine Dorries, the Culture Secretary, warned last week that delays could derail the process of ensuring the club's sale completes by a May 31 licence deadline. The club has since entered exclusive talks with Todd Boehly's consortium, but one other issue which may attract scrutiny over the coming days is whether two close confidantes of Abramovich - club chair Bruce Buck and director Marina Granovskaia - would be allowed to remain at the club. There has been no clear direction over whether the Boehly ownership would want to keep them on, but the pair are understood to be keen. Julian Knight, chair of the Digital, Culture, Media and Sport Committee, has told the Financial Times their ongoing involvement would be "unsettling".

Todd Boehly speaks at a conference in California in 2019 - Bloomberg
Todd Boehly speaks at a conference in California in 2019 - Bloomberg

The main priority for Government is to ensure Abramovich does not profit from the deal. Ministers will continue to push Chelsea to stand by the prior commitment for the full sale amount to go to a charitable foundation.

The possibility of a legal agreement allowing debate around the loan to continue after the sale process is complete will become increasingly likely if talks remain deadlocked this week. Sources close to both Government and Abramovich maintain the main priority is to ensure Chelsea avoid facing an existential threat. Downing Street imposed sanctions on Abramovich on March 10, claiming to have proved the business magnate's links to Russian president Vladimir Putin. Abramovich then had his licence from the Premier League removed, so he would not be able to be considered as a valid owner when England's top tier meets on June 8 to constitute the 2022-23 season. At it stands, Chelsea's licence to continue operating under a Government licence will have expired eight days before then.

Abramovich said at the start of March, when he put Chelsea up for sale, that "I will not be asking for any loans to be repaid”. There was just over £17milllion in cash reserves in Chelsea's parent company during the last set of accounts up to the end of last season, but the loans that Abramovich has pumped in since buying the club in 2003 now total £1.6billion. Last season alone, Abramovich injected around £150million and withdrew around £130million to end the year loaning the club an overall £19.9million.

However, an amended proposal in the sale process which would see Chelsea’s parent company Fordstam Ltd pay off loans to offshore Camberley International Investments was raised in the last fortnight, figures in Government claim.

Despite the drama, Boehly remains on track to eventually complete his purchase, despite an effort by Sir Jim Ratcliffe to position himself to pounce if the American’s deal meets a hitch.

Telegraph Sport understands the Premier League has already carried out background checks on Boehly and would be able to sign off the deal in a matter of days when an agreement is reached.

A signed purchase agreement is the first priority for the prospective buyer, however, during exclusive talks with the club. Ratcliffe and his team, meanwhile, have now spoken to Chelsea Supporters’ Trust, even though Boehly was last Friday given preferred bidder status to buy the club.

Sir Martin Broughton and Stephen Pagliuca have also told members of their consortiums to remain on standby in case the Boehly bid breaks down, but there is currently no real confidence of that happening. The Raine Group and Chelsea both expect the sale to remain on course to meet current deadlines.

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