Leeds United boosts GFH's profit

GFH attributed its gain in profits to income generated by Leeds United, which it acquired last year through its Dubai-based unit, GFH Capital. AFP PHOTO / ANDREW YATES

Leeds United Football Club is helping its heavily indebted Bahrain-based owner repay creditors.

Gulf Finance House reported US$10 million (Dh36.7m) in profits for last year with receipts from the Championship club emerging as one of the biggest contributors to earnings in the fourth quarter.

In 2011, GFH had barely scraped into the black with a profit of $380,000. "Despite the slowdown in the international, regional and local economies, we at GFH have met the challenges and have continued to maintain its growth momentum and remain profitable," said Esam Janahi, the chairman of GFH.

The Manama-based Islamic investment bank has restructured hundreds of millions of dollars in debt after it was hit by losses from a number of soured property deals in the wake of the 2009 financial crisis. It said it had made progress in extending terms on a number of loan facilities. The bank said it had successfully restructured the $45m remaining debt on a facility worth $100m.

It also obtained approval from its sukuk holders to restructure its outstanding debt amounting to $105m.

All debts will now mature by 2018, the bank said in a statement.

GFH had a net profit before provision of $12.9m during the fourth quarter of last year with net profit after provision of $2.5m.

That compared to a net loss of $4m in 2011. The bank attributed the gain to income generated by Leeds United, which it acquired last year through its Dubai-based unit, GFH Capital.

The company wants to return the club to the English Premier League in an effort to avail itself of increased revenues from a renegotiation of television broadcasting rights.

The move has drawn criticism from some commentators.

"We find it uninspiring for creditors that GFH can continue to restructure its debts while at the same time magically and rapidly sourcing enough capital to take over a sports team," wrote analysts at Exotix, the distressed-debt specialist, in a report last month.