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Former Blackburn Suitor Defaults on La Liga Team Debt Payment

May 6 (Bloomberg) -- Racing Santander owner Ahsan Ali Syed defaulted on the repayment of part of the Spanish soccer team’s debt to the regional government, which has the right to cancel his acquisition as early as next month.

Ali Syed missed yesterday’s deadline and the government of Cantabria will call in a bank guarantee covering the payment, according to an official who declined to be identified in line with local authority policy. An e-mail to the Zug, Switzerland office of Western Gulf Advisory AG, which Ali Syed founded, wasn’t immediately returned. A Racing Santander official said he couldn’t reach Syed for comment today.

Ali Syed agreed to repay 6.7 million euros ($9.7 million) of the team’s debt to the government when he bought Racing Santander in January. The local authority can cancel Ali Syed’s acquisition under the terms of the contract if he misses a further installment next month, the official said by telephone. This month’s payment is the last covered by a Credit Suisse Group AG bank guarantee, the official added.

Ali Syed dropped a bid to buy former Premier League champion Blackburn Rovers after saying in an interview in August last year he planned to spend 60 million pounds ($98.3 million) on the acquisition and invest a further 100 million pounds on new players. Blackburn was bought by Venky’s, an Indian operator of poultry farms, in October.

Ali Syed is one of three investors to buy teams in the top-tier La Liga, where several clubs stretched by Spanish banks reining in credit are seeking foreign backers. Qatar’s Sheikh Abdullah Bin Nasser Al Thani bought Malaga last June and Royal Emirates Group acquired Getafe last month.

To contact the reporters on this story: Alex Duff in Madrid at aduff4@bloomberg.net;

To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net.

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