The government fears Chelsea’s £4.25billion takeover could collapse due to Roman Abramovich’s alleged refusal to agree to a new sale structure proposed by ministers.
With the deadline for completing the deal less than a fortnight away, Whitehall insiders have said he fears Chelsea could go bankrupt. The government is determined that none of the proceeds from the club’s sale to Todd Boehly’s consortium will go to Abramovich, who put the European champions up for sale when he was hit with sanctions following the invasion Ukraine by Russia.
Chelsea, whose special operating license expires on May 31, needs government approval before the deal is done. But talks over what will happen to Abramovich’s £1.6billion loan to the club have stalled, heightening concerns that the sale deadline will not be met.
The government’s proposal is a two-step process in which the £2.5billion from the sale to the Boehly Group would be paid into an escrow account, where it would be held until it is satisfied the funds will go to a charity for war victims. in Ukraine.
But Westminster sources said the deal had been blocked by the club’s ownership structure. Chelsea’s parent company Fordstam Ltd owes £1.6billion to Camberley International Investments, a Jersey-based company with alleged links to Abramovich. The government claimed Abramovich and Chelsea wanted the loan repaid and then frozen before it was given to a charitable foundation.
The government insists this would violate the terms of the sanctions imposed on Abramovich. Whitehall insiders also say they have yet to see legal assurances that the money will not end up going to the Russian oligarch and that they need guarantees that the funds will reach good causes. Chelsea and a spokesperson for Abramovich have been approached for comment.
Abramovich’s camp has previously denied claims the billionaire could delay the deal by reneging on his promise to cancel his loan at Chelsea. Abramovich insisted that the charitable foundation will be an independent organization and will be led by the former head of a United Nations organization with no connection to him.
Chelsea have been represented in government talks by club chairman Bruce Buck and powerful manager Marina Granovskaia. Buck and Granovskaia, who both have longtime ties to Abramovich, are expected to be retained by Boehly’s group.