(Yicai) Jan. 23 -- Shenzhen Football Club, the team that won the first Chinese Super League in 2004, said it has disbanded after failing to secure a license for the new season because of debt.

“According to the list of debt-clearing clubs announced by the Chinese Football Association, Shenzhen FC failed to pass the professional league's admission for the 2024 season and cannot continue to compete in the professional football league,” the club announced yesterday.

Shenzhen FC is the second CSL team to fold in less than a week after Dalian Professional Football Club, once owned by debt-laden real estate giant Dalian Wanda Group, announced its dissolution on Jan. 17 due to debt issues. Another team, Jiangsu Football Club, dissolved after winning the 2020 CSL season.

Founded in 1994, Shenzhen FC finished at the bottom of the CSL last season and was relegated to the second division. The club has debt running into tens of millions of US dollars, mainly from unpaid salaries and outstanding payments to suppliers, according to insiders.

Players were paid in only four months of 2022, several noted. Most had only received about one-third of their contracted remuneration as of the dissolution, with the longest period equal to 20 months of salary, they added.

In 2016, heavily indebted Chinese developer Kaisa Group Holdings became the largest shareholder of Shenzhen FC, and according to some media reports, it has invested at least CNY6 billion (USD845 million) in the club.

Kaisa had a net loss of CNY7 billion in the first half of last year, following losses of CNY12.7 billion (USD1.8 billion) in 2021 and CNY13 billion in 2022, according to the Shenzhen-based firm’s earnings report.

Kaisa's gearing ratio after pre-sales rose to 90 percent as of June 30, and its net debt ratio surged to 602 percent. Its bank interest-bearing and other borrowings totaled CNY117.9 billion (USD16.4 billion), while its unrestricted cash and cash equivalents were only CNY1.4 billion.

Foreign investors submitted a winding-up petition against Kaisa last July, with a hearing scheduled for Feb. 6 this year.

Editor: Martin Kadiev