After completing the purchase of the land on which it will build its stadium, the Flemish must seek financing alternatives in the capital market. The structuring of at least two financial instruments is discussed to reduce expenses with the acquisition of space and raise funds for construction.
In October, the Rio de Janeiro club took possession of the gasometer land, in the Porto Maravilha region, a port area of Rio de Janeiro. Previously belonging to Caixa, paid in cash by rubro-negro.
To reverse the financial impact of purchasing land on cash, calculated in R$ 147 millionthe expectation is to structure a fund for the sale of captive seats in the future stadium, said the club president, Rodolfo Landimexclusively to InfoMoney.
Continues after advertising
“We committed at the Deliberative Council meeting that approved the purchase of the land not to compromise Flamengo’s current revenues from the construction of the stadium,” he said. “So, the first thing we are going to do is sell a thousand captive chairs, but only to be able to replace the cash we used for the purchase.”
The process should begin in January of next year, so that there is time to collect indications of interest and purchase orders (a process called bookbuilding), approval by the Securities and Exchange Commission (CVM) and other formal processes.
Construction
Last week, Flamengo and Rio de Janeiro City Hall to facilitate the construction of the stadium. A first step to be taken with the agreement is the possibility of selling the construction potential of the club’s headquarters.
Continues after advertising
It turns out that each piece of land has a constructive potential to be used. As Flamengo does not use all this potential in Gávea, the idea is that it can negotiate it with someone who is developing a project — a building project that wants to have more floors than its potential allows, for example.
For now, the club has not yet started conversations with buyers, the expectation is that this will begin next year, when the bill will be forwarded to the City Council, as soon as the councilors elected in 2024 take office.
The funds raised from the sale of construction potential can only be used for the construction of the stadium. The expectation is to raise R$500 million with the deal, for a project budgeted at approximately R$2 billion.
Continues after advertising
Alternatives
According to Landim, the club is studying financing alternatives that involve structuring an incentivized role that uses the sale of naming rights of the future arena as a guarantee to reduce interest rates.
“It’s still difficult to talk because we haven’t started negotiating [os naming rights] with companies”, says the executive. The plan that will be forwarded to the Council for approval, however, projects that it will be necessary to raise funds for construction.
“The other possibility is that whoever buys the naming rights pay in cash. But a reasonable way that we found and are submitting in the budget for approval is like this: a naming rights which I will discount on the market by trying to structure this as an incentivized role”, he says.
Continues after advertising
On the market, the most common options for incentivized securities for the construction sector are Real Estate Receivables Certificates (CRIs) and Real Estate Investment Funds (FIIs), which are exempt from income tax.
Projections are that, alone, the stadium will add R$768 million to Flamengo’s assets by 2027. The value would be almost half of the club’s entire projected assets at the end of the period.
This year, . Last month, São Paulo announced the structuring of a Credit Rights Investment Fund (FIDC) to restructure its bank debt. Atlético Mineiro issued the first fut debentures in the country, a possibility opened up by the SAF Law.
