Breaking News: West Ham Owner’s Bank is Nationalised

It was announced this morning that the bank owned by West Ham chairman BG has been nationalised.

I am not an economist and can only guess at what implications this has for our beloved club. And my guess is that the implications are far from positive.

If anyone knows anything about BG’s financial structures and would like to enlighten the rest of us, please feel free to leave a comment.

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39 Responses to Breaking News: West Ham Owner’s Bank is Nationalised

  1. djclipz says:

    maybe this indian billionaire talk does have some truth to it

  2. RCW says:

    There’s no doubt that the nationalisation of Landsbanki marks the beginning of yet further problems for us. They’ve already frozen 350,000 savings accounts:

    http://www.telegraph.co.uk/news/worldnews/europe/iceland/3150766/Icelands-Landsbanki-is-nationalised-as-crisis-deepens.html

    All of which makes the news that an Indian billionaire may be interested in us all the more significant – the timing couldn’t be better if it does happen! Check this…

    http://www.guardian-series.co.uk/sport/westham/westhamnews/3733669.HAMMERS_TALK__Indian_billionaire_linked_with_Irons_bid/

  3. Troy says:

    BG used Landsbanki shares as security for some of the loans he took out to acquire his business interests. Now that Landsbanki shares are worth nothing, that security will either need to be replaced by pledging other valuable assets to the banks that made the loans, or else the loans will be called in and repaid.

    Effectively it is a house of cards that is about to collapse. A few weeks ago it would have been thought unimaginable that a bank could go bust, especially as Landsbanki had a high deposit/loan ratio.

    The effect on West ham is not clear. He used private money to buy the club and provide funds. However, if he is forced to sell assets in order to raise cash to prop up other more important parts of his business empire (which incidentally is heavily involved in property) then it is inevitable that he will have to sell West Ham and do it quickly.

    All I can say is that I hope the rumours about Anil Ambani are true.

  4. Paul Bailey says:

    Just our luck. We get the only billionaire in football who is skint.

  5. derek hill says:

    the bank is not nationalised, rather it remains as property of shareholders but Icelandic government can make decisions over the heads of shareholders and directors. this means that the icelandic government can sell loans/shares associated with WHFC or indeed force foreclosures if this is the case, (we do not know terms of any loans/financial guarantees). what is certain is that the club and owner are less cash rich than before and my professional advice to him would be to liquidate his fringe assets, whufc, to concentrate on core business issues.

    Derek

  6. Plaistow54 says:

    Iain, maybe this will make it clearer.
    http://hoanewsnetwork.com/media/iceland_is_on_the_brink_of_collapse.php
    Sorry, there isn’t any good news. The 700 billion cash injection did not work, but anyone in the know, knew it wouldn’t. You just have read your history. We are living in momentous times that are far from over yet. BG will look for a buyer, he pretty much has to, i would think. It will be a financial decision, not lack of feeling for the club.

  7. Neal Gilbert says:

    BG has a personal fortune!!

    The clue is in the personal bit!!!!!

    The Bank is not run purely by BG putting in his cash as it is with West Ham.

    Obviously his net worth will be hit like many people but do not think that he is using his fortune to run the bank.

    The lack of understanding re financial issues is what causes so many rumours at the current time.

  8. Biffo the bear says:

    here’s the club’s reaction
    http://news.bbc.co.uk/sport1/hi/football/teams/w/west_ham_utd/7656873.stm
    they say BG’s investments are strong enough and diverse enough…

    “This is not affecting West Ham,” a senior boardroom member told BBC Sport.

    “One of Mr Gudmundsson’s investments has gone bad, but he is still standing and has a lot of other investments,” the board member added.

    Another board member said 67-year-old Gudmundsson had made it clear that Landsbanki’s predicament had “no implications, no impact” for the club.

    “West Ham is protected by Mr Gudmundsson,” he said. “He has considerable personal wealth in a number of sectors, such as construction and shipping, and most of these assets and investments are overseas.” Overseas as in not in Iceland

  9. hinsdaleman says:

    Plastow54, this is not a financial blog so I will be brief. The $700 bn you refer to is not a cash injection. It is essentially a facility set up by the US Treasury to unload distressed debt from the balance sheets of US banks. It is therefore an investment and way too early to project whether it “works” since it hasn’t even been put into effect yet! The media (because they love to keep the bad news coming) would love us all to think it will not work but if we are to get out of this mess we have to restore confidence in the banks and that starts with us not believing all we read.
    As far as WHUFC is concerned, I fear we can believe all we read and as derek hill rightly pointed out the Icelandic Govt does have control over assets and liabilities associated with he club. I will be very surprised if BG is not looking for a buyer as we speak. Let’s hope it’s someone who really wants to not only make a significant investment but restore the reputation of the club on and off the field.

  10. To avoid irradication of these institutions, the shares will in effect be controlled by representatives of the Icelandic government. A major owner of Landsbanki is, beside the private ownership of West Ham owner Björgolfur Gudmundsson (BG to you) and his son Björgolfur Thor Björgolfsson, the investment bank Samson.
    Samson, in turn, is (surprise!) co-owned by BG and his son.

    When these banks and economic institutions are reconstructed a first step will be to sell foreign (i.e. non Icelandic in this case) assets, like companies and shares in companies.

    Now to the interesting part for a West Ham supporter – it turns out that the investment bank Samson is real owner of West Ham United!
    For not knowing this explicitly before, I beg your pardon!

    To put it plainly:
    West Ham will be sold to facilitate the reconstruction of the Icelandic banking system!

    Bubbleview had a strong hunch it was coming to this, (as the faithfuls know) but not that it would be this quick and desperate!

  11. Dave Hall says:

    According to newsnow West Ham United, the bbc are saying that according to a senior boardroom member, ” This is not affecting us. One of Mr Gudmundsson’s investments has gone bad, but he is still standing and has a lot of other investments.” Another board member said that BG had made it clear that Lanndsbanski’s predicament had no implications, no impact for the club. ” West Ham is protected by Mr Gudmundsson. He has considerable personal wealth in a number of sectors such as construction and shipping, and most of these assets and investments are overseas.”

  12. Dave Hall says:

    Apparently there has been interest from others in taking over West Ham but according to an interview just in on sky, they have accepted no bids. Something is going on despite them saying they don’t need to sell the club.

  13. Paul Nixon says:

    Iain: with all due respect, why is this relevant. Either the club will be sold to a new investor, or BG is telling the truth. Either way it won’t affect the club. BBC reports the following:

    “He is the second richest man in Iceland, behind his son. In an interview with The Observer last year he said: “I have interests in companies all over the world. Our operations in Iceland are minimal. Most of our money comes from abroad.”

    On the pitch is my concern. We need those poinst from Bolton at home back. How are we going to develop the mental belief that we can come back at home from two goals down? Liverpool were at Man City. At half time they were 2-0 down. They won 2-3. We need that capability and mental toughness too: I’m hoping Steve Clarke “breeds this in”…

    Paul

  14. The Headmaster says:

    You have to laugh at Biffo’s quoting the board and accepting their reassurances, eh? This board are full of shit as we have all seen over the past 21 months. I wouldn’t trust their platitudes and management speak for a second.
    That having been said, I hope that Paul Nixon’s optimism is indeed founded. For now, at any rate, the EPL continues to attract investment and we must be as well placed as most to benefit from a new source of money.

  15. simo says:

    great comment paul bailey, cracked me up. fortunes always hiding………

  16. E1 says:

    Oh Well, here we go again put on your saftey belts the roller coaster that is west ham is about to begin. the new owner when he comes will be loaded and will look at us as a good investment and will buy at a price that he will be very happy with. Sooner rather than later I hope so we can get on with the football.
    COYI !!!!

  17. IronMick says:

    Paul Nixon, with all due respect to you –
    This will unbootable have an effect on the club, I find it hard to believe that you cannot see this.
    If the club is sold to the sixth richest man in the world we could be in a decent position with respects to signing new, better players ( not quite in the Man City league).
    If the club is not sold we will see no further investment in the club and new players would have to be offset by selling those existing.
    this is a quote from vive chairman Asgeir Fridgeirsson ( or fridge dude )

    “Mr Gudmundsson has already put £30million into the club, the money is still there,” he added.

    “We have a very big squad. Our manager feels it is not necessary to be that size so if further transfers are needed money would need to be generated from sales.

    “There is no intention to invest further in the club at the moment, but the club is standing strong. Mr Gudmundsson will not take money out of the club.”

    I do however agree that we need to concentrate on the pith in the short term – I’m sure that the board will be concentrating on the finance’s , while Zola/Clarke will be fully focused on the next game.

    COYI

  18. Mike says:

    http://www.efinancialnews.com/content/2452088914/24131
    Ian I no longer get access to this site but you can register and receive access to the site for free for 30 days What it provides you with is Landsbanki CEO’s internal letter to staff today so some insight to what the Bank CEo’s are telling their employees. Either way I have to agree with the other postings here and reflected in what BG did last week selling off some of the external (to Iceland) assets Unfortunately the club must be up for sale and he must be looking for buyers…..

  19. I have a bit of a hard time thinking that a sale doesn’t affect the Club.

    If the new owner is a Dubai sheik or if he is another businessman seeing this as yet another opportunity, is of no consequence?

    A change of ownership has a fundamental impact on the Club.
    As has the circumstances of the sale.

  20. Plaistow54 says:

    Yes hinsdaleman, you are correct. It is a “bailout” not cash injection. Or as Bush put it…” Bush said, after warning last week that a significant amount of tax dollars could be used in the bid to throw a lifeline to hundreds of struggling financial institutions.” From a “Money” article dated 23rd Sept. It isn’t a financial blog so i’ll keep my mouth shut on that quote. Here is BG’s worth from Forbes.
    http://www.forbes.com/lists/2008/10/billionaires08_Bjorgolfur-Gudmundsson_DCEV.html
    One point one billion is lot of zero’s. Maybe he does have the personal fortune to carry on, but it doesn’t look good & as i recall, both Ferdinand & McCartney were part of our plans. Time is a taleteller. I don’t think myself, we will be waiting long.

  21. brooking still the best says:

    O dear, here we all go again and again. Why can’t we get a normal chairman for once.

  22. Elmo says:

    when we had no money we win anything, now we have money we haven’t won anything.

  23. jon.london colney says:

    open season at west ham again !! some off the bull thats being said is laughable.do some people wait for a glimmer of a drama and then wahhooooo of we go with the crap.
    BG is a billionaire,that to is loads of dosh,enough to run a few west ham’s if he wanted to.I do think it would be good to see him address the tv and come and say exactly what hes going to do.

    is it me or are we destined to be media fodder forever now?

  24. Potential purchasers will be driving a bargain. BG may be forced to sell at a knocked down price. This may attract serious money to the club (simple rule of business to be bullish and buy low).

    It’s all as clear as mud at the moment – it could go either way. This could be a blessing in disguise or an absolute nightmare. At the moment any opinion or theory voiced is going to be speculative. We just don’t know.

    One thing’s for sure – our club will survive with or without BG, The Premier League or the current playing staff. Let’s hope we retain our league status

    I personally feel sorry for those who have their life savings under threat. Whether you’re going to have money to keep a roof over your head and food to eat. If I were in that position then I’d really worry.

  25. me says:

    As much as i am enjoying witnessing the collapse of capitalism, the sooner the millionaire players all chip in and attempt a takeover by means of some kind of workers co-operative the better.

    Vive La Revolution!!

  26. Biffo the bear says:

    You can laugh at me quoting the board if it makes you feel better.
    I quoted the board because no-one else had, and posted a link to the BBC article so that people could read it. Make your own judgments from the quote. That’s what quotes are, what other people have said. I didn’t say I believed or disbelieved them. I quoted them.

    And you can quote me on that.

  27. Gavin T:
    I totally agree. What we need to understand is that we cannot trust any statement that is not possible to check. They will tell us allmost anything if it serves their purpose.

    Statemets like “There is no problem with the solidity of …” is what they need to say regardless of the actual situation – just to try to avoid it to be fatal.

    My favourite today is “we are not actively looking for a buyer”.
    I mean, why on earth would they have to? Everybody even remotely interested in buying a football club is allready alerted.

  28. LOKI says:

    Hey guys this is serious, just stop to think. We don’t have just one but two billionaire’s. and BOTH of them are skint now.
    still on the bright side our value has to be about £50 mil less than a month ago.
    and the sp*ds are valued at £500 mil. and i still would not swap with them. HA HA

  29. chris says:

    All is not lost,we go bust then get bought by rich arab,buy best players in world, in 20 years east ham and plaistow is a sand dune riddled with camels and bubbles goes arabic!!!!!!!!!!! wots the problem!!!!!!!!!

  30. chris says:

    What has happened to our great country over the last ten years!!!!!everything these days is about foreign ownership are there any rich Englishman anymore,where are you my great English rose.

  31. Joe the Feast says:

    Could be a blessing in disguise gents, Zola wants to sell off our deadwood and so he rightly should. Far too many nearly men on the fringe of the first team that need shifting and will raise dough to help us through this ‘torrid’ time, although i think its just the media trying to latch on to the credit crunch affecting another area. Gudders has got a few more quid tucked under the mattress don’t you worry, and if he ain’t willing to spend we’ll let the other billionaire buy a piece of East London, be nice for him to take us even further beyond spurs as well as snubbing them haha GAME ON!!!

  32. Kim says:

    The ambiguity of the statements (we issue a lot of those these days) seem to indicate that they will sell. Otherwise why state that there has been a lot of interest in the club and that they are not ‘actively’ selling.

    In the current climate I don’t think we will wait long for further developments!

  33. Hammers & Zvezda says:

    We have overnight become an asset of the Icelandic Government and as such will now be playing in the Icelandic Premiership – we stand a very good chance of winning our first title and playing in the Champions League next year! Bring it on!

  34. Iron Lung says:

    Billions are being wiped off the value of stocks worldwide. Even the net worth of billionaires is diminishing hourly. Amid this uncertainty, who in their right mind would buy a football club as a going concern? Perhaps football is imploding before our very eyes.

  35. Essex says:

    Surely this has been the maddest start to a season in Hammers history

    Manager walks out
    Dumped out of League cup
    Threatened with £30M+ law suit
    New manager with no experience comes in
    Chairman loses most of his assets overnight
    Still 6th in the league

    What a roller coaster ride supporting the hammers really is

  36. brooking still the best says:

    I for one would like the football do the talking and not whats happening at board room level. After-all it’s been a long time since it has!

  37. Doc H Ball says:

    Blimey, if the UK Govt is serious about seizing UK assets to pay for investors’ money in Landsbanki, then we could about to be nationalised just like Northern Rock! There’s a thought, W Ham, the Nation’s official club.

    I know Iain’s a Tory, but it sounds good to me…

  38. Plaistow54 says:

    And…if there were exceptional circumstances, could be these days, & the Conservatives won it, could be these days, maybe Iain could arrange sponsorship for the shirts. Problem solved.

  39. Plaistow54 says:

    Iain, i was having a bit of a wander around the net reading. Gudmundsson isn’t saying much. Last we heard he was going to hang on to the club. I don’t think that he can. Now talk of a “fire sale”, administration etc. Who knows what to believe. I reckon there are buyers waiting in the wings. They know BG is under pressure & they are waiting to get the best price possible. Finance sure is a cut throat game. Only the strong survive in that one. I hope that BG does the best for the club whilst managing to salvage something for himself, but the longer this goes on, the more likely he will take a loss. This must be difficult for Zola & the players. Damocles sword. One can only hope that in the spirit of West Ham, that when that whistle blows & the Ref waves his arm, the off field stuff is forgotten & it’s game on. Not much point looking for a buyer & sliding down the table at the same time. One thing that i read once as a kid sticks in my mind. May i quote from Sherlock Holmes “His Last Bow”
    “Good old Watson! You are the one fixed point in a changing age. There’s an east wind coming all the same, such a wind as never blew on England yet. It will be cold and bitter, Watson, and a good many of us may wither before its blast. But it’s God’s own wind none the less, and a cleaner, better, stronger land will lie in the sunshine when the storm has cleared.” The fans, & the players of West Ham, need to be that fixed point.

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