Soccer-Barcelona close $1.6 billion deal to finance stadium revamp
April 24 (Reuters) -FC Barcelona have secured a financing deal worth 1.45 billion euros ($1.6 billion) that will enable the club to renovate its iconic but outdated Camp Nou stadium and its surroundings after having renegotiated the initial terms, they said on Monday.
Barcelona added that they signed the agreement with 20 investors, including Goldman Sachs GS.N and JP Morgan JPM.N.
The Spanish club are set to pay back investors in progressive tranches - after five, seven, nine, 20, and 24 years - with a flexible structure, including a grace period.
This means Barca will finish repaying the debt six years earlier than previously agreed, after renegotiating what was initially a 35-year deal approved in a referendum of club members in 2021.
"The club will start to repay the operation once work has been completed on the stadium, using income generated by the Spotify Camp Nou, which is forecast to be around 247 million euros," Barcelona said in a statement on their official website.
The club added that they would hold a news conference to give more details on the financing deal in coming days.
The announcement comes 24 days after the previous deadline to reach a deal, March 31, elapsed. The club said at the time that negotiations were still ongoing.
The preliminary debt structure has since been revised, the Kroll Bond Rating Agency (KBRA) said in reports published on its website.
KBRA said the revised structure included additional refinancing and interest rate risk. As a result, it had downgraded the financing plan's rating from BBB+ to BBB, making it less attractive to investors.
Later, KBRA said it had converted its preliminary rating to unpublished from published at the club's request.
Camp Nou is the largest football stadium in Europe and the fourth-largest in the world by capacity, with 99,354 seats.
But Barcelona have said it no longer offers a full match-day experience for fans.
The club estimates that the revamped stadium will allow them to generate more than 200 million euros of additional revenue annually through sponsorship and naming rights, ticketing, catering, VIP boxes, hospitality, meetings and events.
Turkish construction company Limak has been tasked with the renovation, with works set to begin in June.
Club president Joan Laporta, who presided over one of Barca's most successful periods from 2003 to 2010, was re-elected two years ago after the previous board resigned due to the club's worsening finances and other issues.
Laporta inherited a club deep in financial crisis exacerbated by the COVID-19 pandemic. Since taking over, he has tried to improve Barca's financial situation, turning the club's assets into cash and bringing in new sponsors.
In March 2022, the club signed a shirt and stadium sponsorship deal with audio streaming platform Spotify SPOT.N in an agreement worth 280 million euros.
Barcelona have also agreed to sell a 25% stake in their LaLiga TV rights for the next 25 years to U.S. private equity group Sixth Street TSLX.N for 607.5 million euros and approved the sale of a minority share of their audio-visual division to Socios.com and Orpheus Media for 200 million.
($1 = 0.9055 euros)
Reporting by Fernando Kallas in Jerez de la Frontera and Corina Pons in Madrid; Editing by David Latona and Ken Ferris
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