LONDON - Chelsea said Wednesday it is "effectively debt free" after owner Roman Abramovich converted 340 million pounds (C$571 million) in interest-free loans to the Premier League club into equity to comply with future UEFA financial controls.
The Russian billionaire has invested hundreds of millions of pounds into Chelsea since his 2003 takeover, delivering two English titles and two FA Cups.
Chelsea is yet to achieve its target of being self-sufficient with the club announcing that it lost 44.4 million pounds (C$74.5 million), amounting to almost a fifth of its turnover in the financial year ending June 30, 2009.
Chelsea is acting on debt to ensure it won't be in breach of UEFA debt controls, with clubs set to be banned from the Champions League after 2012 unless they break even on football-related business.
"The club's debt load has been reduced almost to nil in order to provide more long-term stability for the club," Chelsea chairman Bruce Buck said. "The reduction will also enable the club to comply with any regulations on debt levels which are being discussed by the football community."
While losses were reduced for a fourth straight financial year, turnover was also down from 213.1 million pounds (C$357.5 million) to 206.4 million pounds (C$346.3 million).
Chelsea also revealed that it had to pay 12.6 million pounds (C$21.1 million) in compensation to Luiz Felipe Scolari and three members of the coaching staff, who were fired in February after less than eight months in their jobs. It cost Chelsea 23.1 million pounds (C$38.7 million) in the previous financial year to compensate former managers Jose Mourinho and Avram Grant along with their coaches.
"It is still our aim to be self-sufficient and we will achieve this by increasing our revenues as we continue to leverage off our brand," Chelsea chief executive Ron Gourlay said. "We are reducing our costs by controlling expenses, including salaries and wages."
Former chief executive Peter Kenyon previously spoke of the club breaking even by 2010.
