After months of promises and delays, the two main Iranian football clubs, Esteghlal and Persepolis, will go public on Sunday.
People were asked to subscribe during a press conference held Saturday by the managers of the two clubs allong with the head of the Iranian Privatization Organization and the CEO of Iran Fara Bourse, the junior equity exchange.
As per notices posted on the IFB website, both clubs will offer 10% of their stakes in the subscription phase and investors can buy 3 million rials in shares at the most.
Esteghlal’s stake will comprise 1.23 billion shares each priced at 2,910 rials. Persepolis is to offer 1.034 billion shares each worth 3,387 rials.
The subscription is expected to generate 3.6 trillion rials ($14 million) for Esteghlal and 3.5 trillion rials for Persepolis. The income from share sales will be used to increase the capital of the clubs through share premium.
Share premium is the difference in price between the par value, or face value of shares, and the total price a company received for recently-issued shares. Share premium is the additional paid-in capital in excess of par value that an investor pays.
Hossein Qorbanzadeh, the IPO chief, said the subscription is the first phase of a process through which the government would divest its ownership of the two popular clubs.
“We are working on methods to divest 50% of the government’s share before September,” he told reporters.
The tickers of the newly listed clubs are to be traded on the Base Market of the IFB, which is normally designed for listing companies with not updated auditing and lacking high transparency norms.
The public listing comes after recent media reports on the possibility of banning the two clubs from the AFC Champions League 2022 for failing to meet the requirements for obtaining the entry licenses to the games.
More than a decade ago, when the Asian Football Confederation insisted on privatization of professional football clubs, state-owned clubs were no more acceptable and deadlines were set for transfer of proprietorship.
Following the AFC ruling, several scenarios were considered for the two Iranian clubs, including selling it via auctions. Efforts to privatize Esteghlal and Persepolis failed in the past. The baton has been passed on from one government in Tehran to another, unable (some say unwilling) to find workable solutions to the management and financial problems of the two teams.
Accumulated debt of the clubs and their ambiguous financial statements are seen as the main hurdle to privatization. According to Qorbanzadeh, the last financial reports of the two clubs put debts of Esteghlal and Persepolis at 2,000 billion rials ($6.6 million) and 1,500 billion rials ($5m), respectively.
