West Ham's Iceland fears eased
Published 08/10/2008 | 09:47
West Ham United's owner, Bjorgolfur Gudmundsson, yesterday acted to reassure executives at the club that the financial meltdown in the Icelandic banking industry will not force him to sell up.
Landsbanki, Iceland's second-largest bank, which is chaired by the billionaire, who is also a significant shareholder, has been taken over by the country's government to prevent it from collapse. There are fears it could become insolvent.
This immediately led to concerns that Gudmundsson may have to try to recoup some of his losses by selling West Ham. He has complete control of the club, acquiring it for £85m in November 2006 – plus taking on the club's debts – and then pumping in a further £30m in December last year.
"He has told us there is no implication, no impact. It's business as usual," one board member said yesterday. "He remains fully committed. He has taken a big hit, but this has not impacted on his personal wealth."
Gudmundsson's right-hand man, and West Ham's vice-chairman, Asgeir Fridgeirsson, admitted that the bank's plight was a "blow" for the 67-year-old, but he added: "Landsbanki has not gone into administration. The government has claimed the shares in the company, but the company is still in operation. It is, of course, a blow for him and his financial strength, but he has numerous other investments which are doing well at the moment, so there is no reason to fear that he will not fulfil his commitments to West Ham United."
The club have been fretting with the latest financial blow following on from the collapse of West Ham's shirt sponsor, XL. The club hope to announce a new sponsor soon, but are unlikely to recoup any of the money owed to them from the tour operator, which is thought to be around £5m.
In addition, there will not be any significant transfer funds made available to West Ham's new manager Gianfranco Zola in the January window, although the Italian was aware of this state of affairs when he took the job.
West Ham expect any signings to be financed by players leaving, with the board still arguing – an argument not accepted by Zola's predecessor, Alan Curbishley – that the club have a bigger than average squad in need of trimming.