A Ares Management should soon take control of the Eagle Football Holdings (EFH)controlling company of Botafogo SAF. The holding’s main creditor, the fund exercised a credit protection clause as part of an internal process in the British courts in light of the worsening of Eagle’s financial and corporate situation. The measure would remove John Textor of the holding’s operational command and would mark a turning point in the troubled financial process involving the company.
According to GLOBO’s investigation, The trigger for action was an internal reorganization promoted this week by John Textor, who removed independent members from Eagle’s governance structure. The initiative was interpreted as an additional risk by creditors, leading Ares to exercise contractual guarantees already provided for in situations of non-compliance or deterioration of governance.
There is, however, a central distinction from a corporate point of view. Eagle remains the controller of Botafogo, but the eventual change will not automatically imply a change of control of SAF alvinegra. The management, currently under the command of John Textor, can only be changed by decision of the SAF Council itself or with the end of the preliminary decision of the Court of Justice of Rio de Janeirowhich currently protects the Board composition and governance structure. In other words, even with Ares taking control of Eagle as a creditor, Botafogo’s management remains unchanged at this first moment. But Textor could be removed from office later.
In contact with O GLOBO, Textor guarantees that he remains in control of Eagle and is working to reverse the creditors’ initiatives. The businessman also said that he intends to make a financial contribution to Botafogo this week, with the aim of shielding SAF from the effects of the international crisis.
Ares had already granted successive contractual flexibilities so that Eagle could reorganize its financial situation. With the increase in internal tensions and the lack of a definitive solution to the debt, the fund chose to directly take control of the holding. The dispute is restricted to Eagle Football and the relationship between creditor and debtor.
Textor’s removal from command of Eagle would represent a major setback for the American businessman, who loses control of the group that centralized his multi-club strategy. For Ares, the measure is treated as a step to protect credit and conduct a reorganization under new management.
Change creates uncertainty in Botafogo
From a practical point of view, the new scenario increases the uncertainties for Botafogo, especially in the short term. This is because John Textor maintains that he will make an emergency contribution this week, an operation that, according to him, would have already been approved by Eagle’s board.
The contribution would aim to overturn the transfer ban imposed by FIFA due to the debt owed to Atlanta United and MLS for the signing of Almada, which prevents the club from registering new players. The operation, however, is a high-interest loan with the sale of players as collateral, which has generated resistance within the SAF.
With the change in control of the holding company and the entry of Ares into the commanding position, doubts grow about the viability, timing and even the definitive authorization of this operation. If the contribution does not materialize under the announced terms, Botafogo may face additional cash restrictions and less room for maneuver in the market, at a time when the club directly depends on this financial reinforcement to fulfill commitments and support its sporting planning.
