Borussia Dortmund intends to continue its cooperation with SPORTFIVE and to significantly decrease its Group liabilities with effect as of June 30th...
Borussia Dortmund GmbH & Co. KGaA / Key word(s): Alliance/Strategic Company Decision
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Borussia Dortmund GmbH & Co. KGaA ('Borussia Dortmund') today received an offer of SPORTFIVE GmbH & Co. KG, Hamburg ('SPORTFIVE') to close a contract regarding a long-term prolongation of the existing marketing cooperation.
The offer of SPORTFIVE, which can be accepted by Borussia Dortmund until June 20th, 2008, by latest, provides for a prolongation of the existing cooperation until June 30th, 2020 under new economic parameters. SPORTFIVE shall be entitled to carry out the marketing of certain sponsoring and media rights on behalf of Borussia Dortmund and to earn a commission or respectively a participation in such revenues. Borussia Dortmund shall be entitled to receive a remuneration in a total amount of EUR 50.0 Mio from SPORTFIVE in return. Borussia Dortmund and SPORTFIVE thus seek to continue their - to date - established and faithful marketing alliance.
Moreover, Borussia Dortmund received a credit approval of a German real estate bank. It is intended to close a credit agreement of EUR 20.0 Mio. for a fixed term of five years and backed by normal banking securities.
In case of closing of the afore mentioned agreements, the proceeds resulting therefrom - which are expected to be paid still in June 2008 - shall solely be used by Borussia Dortmund to discharge the Credit Agreement dated June 6th, 2006, with Morgan Stanley International Bank Limited, London ('Morgan Stanley') ahead of schedule (primary term until 2021), but still in Borussia's fiscal year 2007/2008 (end of fiscal year: June 30th, 2008), and thus to repay the complete loan debt with effect as of June 30th, 2008. As a result of, and taking the regular repayment and the voluntary prepayment in the current fiscal year into consideration, a decrease of Group liabilities by EUR 59.8 Mio. from EUR 128.9 Mio. to EUR 69.1 Mio. would be achieved with effect as of from June 30th, 2008.
A further effect of the discharge of the Morgan Stanley loan would be - among others - a significant improvement of the sporting competitiveness in the next years. Borussia Dortmund would be able to realise a considerable enhancement of first team in the fiscal year 2008/2009 and would be even able to finance personnel expenses of the first team in a minimum amount of EUR 36.0 Mio p.a. from the operative business and in a sustainable way, e. g. without any new indebtedness, in the next years.
The management therefore intends to use the aforementioned business opportunities and to take the necessary steps.
Dortmund, June 12th, 2008
Borussia Dortmund GmbH & Co. KGaA Borussia Dortmund Geschäftsführungs-GmbH
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