FC Porto incorporates two companies to cut costs

With the season going poorly on the pitch, FC Porto is continuing its internal restructuring process, which has been one of the priorities of André Villas-Boas’ first term in charge of the club. Now, the dragons’ SAD is preparing to absorb two companies from the Porto universe with the aim of, among other things, rationalising costs and optimising the structure.

The companies in question are Portoestádio and FC Porto – Serviços Partilhados, which will be merged into the SAD by transferring their assets, liabilities and equity.

Facing a very delicate financial situation, with negative net worth of around 175 million euros, this operation will have very little impact on the SAD’s individual balance sheet, since Portoestádio and Serviços Partilhados had positive net worth of 990,000 euros and 70,000 euros, respectively.

Even so, the absorption of the two companies has a more operational objective for the FC Porto SAD, as explained in the merger project consulted by ECO.

The merger will allow “the concentration in a single entity of currently distinct operational and administrative structures, with obvious synergies, not only in terms of the management and coordination of human and material resources, but also in terms of reducing operational/administrative costs, improving the quality of the services provided and greater flexibility and simplicity in the holding of shareholdings”, says FC Porto SAD, among other points.

Accompanying the transfer of all assets to the SAD, including assets worth 20 million euros, the 90 workers of Portoestádio and Serviços Partilhados will also be transferred to the incorporating company, “which will assume the responsibilities arising from the labour contracts in force, which are not extinguished and are transferred by virtue of the merger”.

André Villas-Boas, who took office in May last year after Pinto da Costa’s presidency of more than 40 years, has made FC Porto’s financial restructuring one of the main priorities of his mandate.

FC Porto’s SAD is going through an unprecedented financial crisis and has embarked on a debt restructuring process totalling 500 million euros, which is being renegotiated with creditors in order to lower financial costs.

It recently managed to refinance a 50 million euro bond loan with more than 3,200 investors, which eased its short-term financing needs.

Last year, the SAD secured 115 million euros from US investors through its newly created company to operate Dragão stadium, Porto StadCo, including naming the stadium and the museum.

The FC Porto SAD also had to sell 30% of Porto StadCo’s capital to raise more funds. It has already received 50 million euros from this deal, which has helped to ease the pressure on the blue and white team’s cash flow, but it is expected to receive a further 15 million euros in a lump sum and another 35 million if certain business metrics are met.