Gulf Finance House EC climbed to the highest in more than 22 months after the investment company said it signed an agreement with a group of British investors to sell 75 percent of its stake in Leeds United Plc.
The shares gained 9.6 percent to 0.86 dirhams in Dubai, the highest close since March 2012. GFH will retain a 10 percent holding in the club after completion of the deal, it said in a statement on the Dubai Financial Market website, without disclosing its value, citing a confidentiality agreement.
The Bahrain-based firm is selling Leeds about 14 months after buying the soccer club as it prepares to begin making payments on $110 million of debt it restructured in May 2012. The transaction, which requires approval from the English Football Association, will have a positive impact on the company’s financial position, GFH said in the statement.
“The disposal of an asset like Leeds United will bring cash for the company to meet its refinancing obligations,” Montasser Khelifi, a Dubai-based senior manager for global markets at Quantum Investment Bank Ltd., said in an e-mailed response to questions. “That explains the positive market reaction to the deal announcement.”
GFH is starting to make payments on its restructured debt this year, with reimbursement of a sukuk in July and a so-called murabaha facility in August, Khelifi said.
The company’s shares rose for a third day after it said Jan. 15 it had signed an agreement to sell a stake in the club. Its Kuwait-listed stock rose 8.6 percent, while it gained 9.8 percent in Manama. Volume of shares traded in Dubai was almost five times the three-month daily average.