Minority Share of the UFC sold to Abu Dhabi Subsidiary

The Assoicated Press is reporting that Flash Entertainment, a government subsidiary of Abu Dhabi, has bought a 10% stake in the UFC for an unknown sum.

FiveouncesofPain had previously reported that Sheik Tahnoon Bin Zayed Al Nahyan, of Abu Dhabi, had bought a minority stake. Dana White had also mentioned that a stake in the company was up for sale in October of 2009. 

Flash Entertainment's chairman is Ossama Khoreibi.

The AP report from (courtesy of MMA Fighting Stances) breaks down the new ownership stakes within the company.

Flash's new shares mean Fertitta's 45% stake in Zuffa dropped to 40.5%. His brother, Frank Fertitta III, owns the same amount.

Dana White, president of UFC, saw his stake go from 10% to 9% after the deal.

Marketwatch adds some more information regarding Flash Entertainment's stake in the company.

The sale will dilute all existing owners proportionately, Zuffa said, and under the contract, Flash will not be able to purchase a larger stake nor sell its interest to a third party.

Zuffa also said it has "no plans to sell any other UFC stakes." It declined to disclose what the proceeds would be used for but said the "UFC has no financial issues

According to Lorenzo Fertitta the purpose of this sale was to facilitate the UFC's growth in the Middle East, India and China. 

Of course any time we talk about the Fertitta's and money we are eventually going to have to mention Station Casinos. Once again the AP report:

Fertitta would not say what would be done with the money Flash invested or whether it would stay in UFC. Station Casinos Inc., where Frank Fertitta is chairman and CEO and Lorenzo Fertitta is vice chairman, has a pending bankruptcy case in Nevada that is separate from UFC.

Station Casinos filed for Chapter 11 in July of 2009 to restructure the company's $5.7 billion of debt. The Fertitta's own a 25% stake in Station Casinos. 

While Lorenzo was silent on what the new influx of money will be used for; the Las Vegas Review-Journal adds some more information concerning Zuffa's recent financial actions offering a possible avenue of reinvestment.

Zuffa carries $450 million in debt, including a $25 million credit facility due in 2012 and a $425 million loan due in 2015, according to a November report issued by Moody’s Investors Service. Moody’s, however, said Zuffa’s income, which comes largely from events and pay-per-view receipts, should be sufficient to make its debt payments.

Moody’s said Zuffa’s financial outlook is stable with good growth prospects.

Dana White held a Q&A with UFC.com to explain what this means for day-to-day operations.

Finally Dana had an interesting exchange with Chad Dukes on this very subject prior to the AP's report.

Chad Dukes: One of the big stories now is the partial ownership deal with the sheik of Dubai can you confirm that has happened? I mean, I don't want to put you on the spot but a lot of people have been talking about that.

Dana White: Yeah, my phone has been blowing up for days and it--I have been responding 'Laugh Out Loud.'

Technically, White was correct. A stake was sold to Abu Dhabi not Dubai.

Damn those emirates and their similar names!