July 27 – Real Madrid are going to the financial markets to raise between €400 million and €500 million for a remodeling of their Santiago Bernabéu stadium.
Club president Florentino Perez is reported by El Confidencial to have begun approaches to banks and hedge funds for the money.
The cash for the Bernabeu revamp had long been lined up to come as part of a naming rights deal with Abu Dhabi’s International Petroleum Investment Company (IPIC). Perez inadvertently back in 2015 had told broadcast media that “the Bernabeu will be called IPIC or Cepsa, what they want.”
Real Madrid had signed a €20 million a year sponsorship deal with IPIC leading up to the naming rights deal. It is understood that both IPIC and Cepsa (the name of the Spanish subsidiary of the investment group) were rejected and the words Santiago Bernabéu would remain part of the stadium name, in deference to the history of the club and the wishes of the fans and president.
Now the whole arrangement with IPIC appears to have been lost completely based on a contract clause that says that IPIC could pull out if there were significant changes to the project plans. That clause was exercised after Real Madrid had to abandon their initial plans when the Madrid council, later ratified by the Supreme Court, refused them planning permission.]
El Confidencial reports that the breaking of the contract is now in the hands of lawyers and court of arbitration, with no immediate resolution expected. Perez wants to be able to report to stakeholders in 2018 that the stadium plans are financed which, given the club’s positive cashflow and ability to service its debt, is not expected to be an issue for lenders.
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