Financial Tribune – TEHRAN, Privatization of Tehran’s two top football clubs, Esteghlal and Persepolis, will be finalized by the end of December, the Minister of Sports and Youth Affairs Masoud Soltanifar was quoted as saying earlier this week.
However, creditors are not supposed to have priority in purchasing stocks of the two clubs, Abolqassem Shamsi, deputy head of Iran Privatization Organization told Tasnim news agency on Friday. He was responding to some reports about priority of selling the two clubs’ shares to creditors (to whom the clubs owe money) and cooperatives.
“Anybody can buy the shares. Cooperatives too will be welcome but not on a priority basis.”
In May it was announced that shares of Iran’s two biggest soccer team will be offered on the Iran Fara Bourse soon after the process of registration and recapitalization of the clubs is over.
Accumulated debts of the clubs and their ambiguous financial statements are seen as a main hurdle to privatization. In August 2017, it was announced that the two teams had 1.45 trillion rials ($38 million based on exchange rates in that year, and $8.5 million at current rates) and 1.3 trillion rials in unpaid taxes, with half of the debt pertaining to fines for late payments.
Officials have announced that the problems of the two clubs will be resolved once their shares are offered on the capital market.
As per the plan, 50% of the shares are supposed to be sold to companies with more than 10,000 shareholders and the rest can be purchased by cooperatives.
***IFB Base Market
Esteghlal and Persepolis are to be sold via the IFB Base Market. Shares of companies unable to address the main regulatory requirements, such as transparency of financial records, can be traded only at the base market.
Esteghlal (the Blues) had a private owner before the 1979 Islamic Revolution, but the club was later put under the control of the then Physical Education Organization (now Sports Ministry). Persepolis (the Reds) had a similar fate.
Since bosses of the two most powerful football clubs are directly appointed by the president of the country, policy decisions of the clubs have been traditionally made by politicians.
More than a decade ago, when the Asian Football Confederation insisted on privatization of professional football clubs, state-owned clubs are no more acceptable and deadlines have been set for transfer of proprietorship.
Following AFC’s ruling, several scenarios were considered for the two clubs, including auctions. Attempts have made in the past to privatize Esteghlal and Persepolis, but to no avail. The baton has been passed on from one administration to another.