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Billionaire Lim may help Valencia finances, S&P Capital says

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Singapore billionaire Peter Lim's takeover of Spanish soccer club Valencia may help it improve its financial standing, according to S&P Capital IQ.

[SINGAPORE] Singapore billionaire Peter Lim's takeover of Spanish soccer club Valencia may help it improve its financial standing, according to S&P Capital IQ.

Mr Lim bought control of the La Liga team last year for an undisclosed price. Valencia has suffered years of financial hardship, which led the team to sell star players such as David Silva, David Villa and Juan Mata, S&P Capital IQ said.

"It's difficult to know what he's going to do when it comes to investing in the club," Pavle Sabic, a director of market development at S&P Capital IQ in New York, said by phone. "But if you look at the track record of billionaire investors going into clubs, their fortunes do help them turn around." Private investors are increasingly turning to sports clubs as a way to seek returns. In May, Ray Ranson, a former Manchester City defender, started an Internet-based sports finance exchange to lure asset managers into the sector. Last year, teams raised US$572.3 million selling shares as hallmark names including Manchester United Plc and AS Roma sold stocks, according to data compiled by Bloomberg.

Aside from Mr Lim, Chinese billionaire Jack Ma, the founder of Alibaba Group Holding Ltd, also invested in soccer clubs. Last year, he bought 50 per cent of Guangzhou Evergrande Football Club, winner of the Asian football championship in 2013. In January, Wang Jianlin, Asia's richest person, bought a 20 per cent stake in Atletico Madrid through his company Dalian Wanda Group.

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Valencia's total debt compared with its revenue has been increasing over the past five years, S&P said. The club fell 12 places in S&P's ranking of financial health for the sector this year.

Mr Lim became a billionaire through holdings in palm oil producers and a chain of Manchester United-themed cafes in Asia. The Valencia purchase came four years after he was rebuffed in his 320-million-pound (S$679.5 million) bid to buy Liverpool FC.

"He can prop up certain aspects of their regular revenue stream," Mr Sabic said, citing his ability to help increase stadium capacity which in turn boosts ticket sales, the main source of revenue for soccer clubs. "Peter Lim has the capacity to increase that." S&P Capital IQ is a unit of McGraw Hill Financial Inc and is connected to Standard & Poor's Ratings Services.

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