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Debts threaten Dortmund's future

Dortmund players may have little to celebrate if finances do not improve

DORTMUND, Germany -- Borussia Dortmund, Germany's only publicly-listed club, have warned that their finances are in a perilous condition.

The heavily-indebted club said they were in an "existence-threatening earnings and financial situation".

The ad hoc statement to markets said Dortmund still hoped to find a solution to their problems.

"Due to its extremely thin financial means, the club is in constant, and in the view of management, constructive dialogue with creditors in order to permanently overcome the current straits," Dortmund said.

Back in October 2004 Dortmund were 118 million euros ($147m) in the red after gambling on playing regularly in the Champions League to finance substantial transfer fees and a spiralling wage bill.

Dortmund sold Torsten Frings for nine million euros to Bayern Munich in the summer and may now be forced to sell off their prize assets such as Tomas Rosicky and Jan Koller for knock-down fees.

Without restructuring Borussia, which has already cut player and management wages, could see their debt rise to 134.7 million euros ($175.3m) by mid-2006.

The club's financing was thrown off balance by a downturn in the team's fortunes on the field, including an early elimination from the lucrative Champions League competition.

In an afternoon press conference general manager Michael Meier admitted the acute financial situation had reached crisis point.

But he claimed the restructuring plan, drawn up by auditors RoelfsPartner, could rescue the 1997 Champions League winners.

"Since December 2004 we have implemented restructuring measures to improve our precarious financial situation," explained Maier.

Club can be saved

"We are all in agreement that Borussia Dortmund can be saved with this policy and that the club still has a future."

A loss of 27.2 million euros ($35m) for the first half of the business year raised fears of liquidation with share prices falling 25 percent on Thursday leaving them at under two euros apiece.

After being listed on the stock market in October 2000 share prices were at 11 euros.

Dortmund - German champions in 1956, 1957, 1963, 1995, 1996 and 2002 - are expected to record a loss of 68.8 million euros for the financial year.

Meier acknowledges the German Football League (DFL) would be within their rights to withdraw Dortmund's license if the club could not prove its liquidity.

"If we can make this rescue package work we are licensable," maintained Meier.

"But I must stress that a lot of discipline will be required to make the package work by 2006. Otherwise we will put the club in danger."

DFL spokesman Tom Bender confirmed the league was examining Dortmund's situation closely.

"We are monitoring developments with great concern," said Bender.

Dortmund, founded in 1909, said it had failed to find an investor for its Westfalen Stadium, which holds over 80,000 fans, that was sold in a complicated sale-and-lease deal.

German business daily Handelsblatt confirmed London investement banker Stephen Schechter had broken off contact about a possible deal to buy back the stadium, which costs 17 million euros a year to lease, citing a "breach of confidence."

But one ray of hope came from Florian Homm, the club's majority shareholder with a 26 percent stake, who claimed he would be willing to make funds available.

"It is about the survival of Borussia Dortmund and if it does come to liquidation there is money available," Homm told Capital magazine. "But that is only for the worst case scenario."

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