EghtesadOnline: The Ministry of Sports and Youth Affairs has completed the requirements for the long-awaited offering of Tehran's two major football clubs, Esteghlal and Persepolis, on Iran Fara Bourse, says the minister.
"The ministry has submitted all the financial reports including the list of assets owned by the clubs. The process of recapitalization has been completed by judicial experts and the documents were submitted to the Iran Privatization Organization," Masoud Soltanifar, the minister, told IRNA on Tuesday.
"We have done our part as demanded by the High Council of Privatization. The date for offering shares of the two clubs will be decided by the IPO, the Securities and Exchange Organization and Iran Fara Bourse."
According to Soltanifar, 15% of the shares of Esteghlal and Persepolis will be offered in the bourse.
After the asset valuation was finalized, the initial capital of Esteghlal Athletic and Cultural Club, the Iranian multisport club and owner of Tehran’s state-owned Esteghlal Football Club, was 7,190 trillion rials ($28.7 million). The figure was 7,010 trillion rials ($28m) for Persepolis Athletic and Cultural Club, the multisport organization and owner of Tehran’s state-owned Persepolis Football Club,
Amir Hamouni, the chief executive of IFB, said Tuesday that the SEO had registered the public offerings of the two soccer clubs. "Shares will be offered via the IFB Base Market," he told reporters without providing details.
Shares of companies unable to address the main regulatory requirements, such as transparency of financial records, can be traded only in 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 indirectly appointed by the Iranian president of the country and 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 were no more accepted as AFC members and timelines were set for the transfer of proprietorship.
Following AFC’s ruling, several scenarios were considered for the two clubs, including auction. Attempts were made to privatize Esteghlal and Persepolis, but to no avail. The baton has been passed on from one administration to another.
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 $5.8 million at current rates) and 1.3 trillion rials in unpaid taxes -- half of it pertaining to fines for late payment.
The fact that Iran’s sport sector is largely owned by the government has been a major hurdle to its growth. Officials hope problems of the two clubs will be resolved once their shares are offered to the public.