Bank Helps Prop Up Parken

Nordea Bank appears ready to prop up Denmark’s cash-strapped national stadium until it can recover from a 254 million Danish kroner ($46.7 million) annual loss – provided major shareholders also inject new capital.

The bank has pledged to contribute whatever operating loans are necessary to keep Parken Stadium afloat and it will not require the loans to be repaid in the near future, according to local newspaper Jyllands-Posten.

The Copenhagen Post reported Parken’s problems are largely thanks to it investing heavily in a scheme to build an amusement park and flats in southern Italy. The development stalled because the correct building permissions haven’t been obtained. The losses are a writedown on the value of the asset.

The Copenhagen venue hosts the national team’s soccer matches, 2009 league and cup double winner FC Copenhagen’s home matches, and regularly stages concerts featuring such international acts as Madonna, Rolling Stones, U2, Bruce Springsteen, Depeche Mode, Robbie Williams, George Michael, Britney Spears and Muse.

Nordea Bank’s backing is contingent on owner-operator Parken Stadium & Entertainment’s three largest shareholders pledging to put in a further 300 million kroner ($55.3 million).

The combined bank and shareholder support is expected to give PS&E a working capital of about 500 million kroner ($92.1 million).

Nordea press officer Claus Christensen isn’t revealing how big a safety net the bank is willing to place under Parken’s economic future and PS&E execs are stonewalling the question citing confidentiality.

The Danish papers are reporting the agreement has three central points. Nordea continues as banker to the park and provides the necessary operating funds; the bank will not require additional capital from the main shareholders beyond the DKK 300 million pledged; and Nordea will also helps the park with the sale of assets in a bid to raise further cash.

PS&E has already sold its FCK handball team to main rivals AG Handball.

The refinance deal is also said to depend on the three main shareholders promising not to sell stock until at least 180 days after the capital boost is performed and depositing or guaranteeing the equivalent of the DKK 300 million they’re contributing.

Stories about Parken’s financial health have become an annual event in Denmark. The bank bailout comes a year after Flemming Østergaard and PS&E – which owns the stadium, the soccer club, a couple of holiday villages and has various media interests – hit out at national daily Berlingske Tidende for saying the company was having big financial problems and was “on the edge of an abyss.”

“I am astonished at these articles in Berlingske Tidende, and their mere existence compels me to reiterate that our business operations are fundamentally sound,” Østergaard – a former stockbroker – explained in a 500-word rebuttal of the BT story.

A couple of months earlier, he released an official statement to deny similar stories in BT and Ekstra Bladet, which both questioned PSE’s cashflow.