The takeover of the 4.25 billion pound Chelsea football club caused problems at the last minute after the British government clashed with Russian oligarch Roman Abramovich over conditions that called into question the prospects of a quick deal.
American financier Todd Boley needs special approval from the British government to buy Chelsea, because Abramovich is subject to sanctions, and the West London club operates under a special license.
But in recent days, ministers have been concerned that Abramovich has become “tougher” in his demands for terms of sale, government officials say.
“Relations have not broken down, but we are not making the progress we need at the moment,” said one government official close to the talks. “The sales schedule is really, very complicated.”
At the heart of Whitehall’s concern is Chelsea’s “deeply complex” ownership structure and the ministers’ determination that every penny of the sale goes to good causes.
Abramovich and Chelsea have already suggested that all proceeds of £ 2.5 billion go to a frozen bank account in the UK, which requires government permission to transfer money.
The money was earmarked by Abramovich for an independent charity for the victims of the war in Ukraine.
Ministers want the money to be kept in a safe deposit account until they make sure the charity is working and equipped to safely manage £ 2.5 billion.
Government officials said Abramovich did not reconcile his verbal obligations to sell with acceptable legal obligations. The dispute could jeopardize Chelsea’s ability to work because the government license is only valid until the end of May.
The fights, backed by US investment firm Clearlake Capital and other investors, are investing another £ 1.75 billion in the club in addition to a purchase price of £ 2.5 billion.
Fordstam, Chelsea’s parent company, owes about £ 1.5 billion to Jersey-based Camberley International Investments, which has ties to Abramovich.
Government officials say they are concerned that according to Abramovich’s plan to use the proceeds from the sale, Camberley may demand some of the money as a lender.
Abramovich denies that he wants to return the money. A man close to the sale said no one would have a claim of £ 2.5 billion and there is no doubt that the full amount will go to a charity fund.
Mike Penrose, the former executive director of UNICEF UK, has been selected to set up the fund, according to one person who is knowledgeable on the subject. Contacted Penrose for comment.