Benfica bond subscription deadline expires, but investors can still cancel orders
The Portuguese club seeks to raise €35 million from the bond loan that started on July 5.
Three weeks have passed, but for Benfica, it seemed like many more. At the same time as it placed a bond loan on the market with the purpose of raising €35 million, with the subscription period now coming to an end, the SAD saw Luís Filipe Vieira being arrested. And it also became known that José António dos Santos had an agreement to sell 25% of the capital to a North American investor, developments that extended the period for cancelling orders for this operation until today.
The bond loan issued by Benfica, which is now ending, started on July 5. Just two days after the debut of the bond subscription period, the first “bombshell” fell on the Portuguese club: Luís Filipe Vieira was arrested, with the then president of Benfica being accused of embezzling money from Benfica SAD.
Along with Vieira, the businessman José António dos Santos, the largest individual shareholder of the SAD was also arrested. At stake are possible crimes of fraud and abuse of trust.
Shortly afterwards, it was the Portuguese Securities and Exchange Commission’s turn to increase the “buzz” surrounding Benfica, and its financing operation with small investors. It found “various irregularities” in the SAD’s shareholder structure, namely a stake larger than that officially communicated by José António dos Santos. Not only did he have over 20% of the club’s capital but there was an agreement to sell this position.
The defendant in the “Red Card” operation ended up, on July 14, confirming both the participation in SAD and “two agreements for the sale” of 25% of Benfica SAD’s capital to American investor John Textor, dependent on payment until September 15. Textor has taken up the interest, but Benfica’s administration has said no, stating that it will not accept the investor if he intends to seal the signed deal.
All this happened while the offer was taking place, but the deadline was also approaching for those who had given the order to subscribe to these debt securities, which pay 4% interest per year, to revoke them. With CMVM already investigating situations of “information abuse” with SAD shares, the period that investors have to cancel orders transmitted was eventually extended, coinciding with the last day that is possible to invest in the bonds.
It is not clear, how Benfica’s bond loan is progressing, although Textor said that, based on rumours, the “issue may not be going well”. But it is well known how important this is for the SAD.
Benfica has to repay, on July 16, €19.98 million of a 2018 issue, which in December 2019 had been subject to an early repayment of €25.02 million. The liquidity achieved may also be relevant for this summer transfer market.
