by 
Edit****
The Bahrain-based owners of Leeds United have given formal notice that they have begun negotiations to sell the club, which they bought from the previous owner, Ken Bates, only on 21 December. In their financial statements for the year to 31 December 2012, Gulf Finance House (GFH) state that they bought Leeds for "a bargain purchase" and are now holding the club for sale, which they envisage completing within six months to a year.
GFH also revealed for the first time the price they paid for Leeds, "net cash" of $33m (£22m), and they assess the club to be worth immediately $10m (£7m) more than that. Bates owned 73% of the club via his offshore company, Outro, so of that £22m purchase price disclosed by GFH, he would have been paid £16m. He has never revealed how much he paid to buy Leeds, so it is not known whether Bates, a tax exile living in Monaco, made a personal tax-free profit on the sale.
In their financial statements, GFH say without further explanation that Bates was under some duress to sell the club."The bargain purchase was due to pressure on the sellers [principally Bates] to exit their holdings due to change [sic] in their business plans," they say.
GFH make it clear they are seeking almost immediately to sell Leeds. The club's assets, which the accounts assess to be worth $88m (£58m), are noted as "held-for-sale" with "maturity" predicted within six months to one year.
"The group has an active plan to sell its stake in LUFC Holdings [the company which now owns Leeds]," the financial statements say. "Subsequent to the year end, [GFH] has commenced negotiations relating to the sale of its stake in LUFC Holdings."
In February Salem Patel, GFH's chief investment officer, told the Guardian the fund is looking for "strategic investors" who would buy a minority stake, preferably 30%, to reduce GFH's exposure to the price of buying and funding Leeds. Patel said GFH might consider selling a majority stake, but only to an investor with enough money to fund Leeds to success.
Patel said GFH had paid substantial sums already into Leeds because the club had "a cashflow shortfall" due to season ticket income from this and next season having been mortgaged under Bates's ownership to finance building work in the Elland Road east stand.
The GFH financial statements, signed on 23 February, make it clear GFH is actively seeking to sell its stake and has already begun negotiations to do so. Neither Patel nor David Haigh, deputy chief executive of GFH Capital, the subsidiary fund that actually bought Leeds, have said with whom they are negotiating, or on what terms.
The accounts show that GFH, which has had financial difficulties during the property and financial market slumps, recorded in 2011-12 a modest profit of $10m (£7m). The GFH chairman, Esam Yousif Janahi, hailing a "positive turnaround," said the firm had restructured millions of pounds of debt, and he cited the Leeds acquisition as a high point. "LUFC promises to be a high yielding investment opportunity, which GFH is successfully placing with its investors," Janahi stated.
Leeds, managed by Neil Warnock, are 10th in the Championship, having lost at home to west Yorkshire rivals Huddersfield Town on Saturday.
