The Saudi Arabia PIF are now looking to sell a significant part of their shareholding in Newcastle United.
However, this is not the majority owners taking a step back with regard to the club, instead it is quite the opposite.
The Saudi Arabia PIF looking to sell some of their shareholding in order to help establish the financial arrangements that can enable the club to move forward with both their stadium plans and the new Newcastle United.
At present, the PIF owns 85 per cent of Newcastle United and the Reuben family owning the other 15 per cent.
The club was bought for £305million from Mike Ashley, but the progress on and off the pitch means that The Times say their sources have informed them the club has now grown to a £1.5billion valuation.
That valuation would make the 15 per cent Reuben family shareholding worth £225million now, with the PIF 85 per cent worth £1.275billion.
The Times report that their information is that the Saudi Arabia PIF are now looking to sell around a quarter of their shareholding. That would dilute the PIF shareholding to about 63.75 per cent with new investors taking a 21.25 per cent stake in the club (the Reuben family retaining their 15 per cent).
Martin Hardy of The Times says that when the Newcastle United owners met senior club staff for a series of meetings at Matfen Hall ahead of the Brighton home match (Yasir Al-Rumayyan pictured above at that game against Brighton) three weeks ago, the owners were told that equity was needed to progress the plans for a new stadium and training facility.
Newcastle United must part-fund any new stadium themselves and that means the club will need to have enough equity to have the right loan-to-value ratio to enable the correct financial arrangements. A £1.5billion club valuation would mean a 21.25 per cent shareholding in Newcastle United would generate just over £318million from new investors, to massively help the amount of equity when it comes to that loan-to-value ratio.
The Times say that the Saudi Arabia PIF are still fully committed to Newcastle United and will remain the majority shareholder, with the move to sell a quarter of their shareholding simply seen as key in an attempt to get equity into the Premier League club before the announcement this summer of a proposed £200million training ground at Woolsington and further talks on a possible new stadium that would cost more than £1billion.
The two major infrastructure projects are key to Newcastle United’s growth and ability to compete on and off the pitch in the future.
Earlier this week, the club announced that they had bought approximately two-thirds of Leazes Terrace, including all of the side that faces St James’ Park. This purchase set to potentially help stadium plans in the future, whether it is a redevelopment of St James’ Park, or a brand new stadium to be built partially or wholly in Leazes Park.
Wednesday then brought an official club announcement that more than £30million is to be spent this summer to improve the current infrastructure, including major work at St James’ Park and the training ground.