That process is now on hold, leaving the west London club, ranked by Forbes as the seventh most valuable in world soccer at $3.2bn (about R28.4bn), in a state of limbo, operating under a special government licence.
“The licence is a safety net to protect the sport, the Premier League, the wider football pyramid down to the grassroots game, loyal fans and other clubs. It will deprive Mr Abramovich of benefitting from his ownership of the club and means he cannot circumvent UK sanctions,” the government said in a statement.
The Russian bought the club in 2003 for a reported £140m and his investment resulted in the most successful era in their history as they won five Premier League titles, five FA Cups and the Champions League twice.
His purchase of the club helped transform the landscape of English football with Chelsea breaking the stranglehold of Manchester United, Arsenal and Liverpool.
Abramovich had funded Chelsea via £1.5bn in total loans through Fordstam Limited, the entity through which he owns the club.
In their most recent accounts in December, Chelsea, who reported post-tax losses of £145.6m (about R2.8bn) for the year ended June 30 2021, said they were “reliant on Fordstam Limited for its continued financial support”.
Yet now there is a huge question mark over the club’s future.
Chelsea said they would seek changes to the licence they are now operating under.
“[We] intend to engage in discussions with the UK government regarding the scope of the licence. This will include seeking permission for the licence to be amended in order to allow the club to operate as normal as possible,” the club said in a statement.
A number of potential new owners had emerged in the past week, including several US sports executives, but there is now a block on any sale.
A spokesperson for Britain’s prime minister Boris Johnson said that block could be lifted in the future if another licence is agreed to.
A source close to Chelsea said the expectation within the club was that a deal would be done “sooner rather than later”.
New York investment bank Raine has been handling the sale and potential buyers will now have to wait to see whether a licence allowing a sale is granted and how any eventual legal action from Abramovich proceeds.
The licence allows some exemptions to the asset freeze restrictions to allow the club to fulfil their fixtures.
Chelsea, who are third in the Premier League and in the last 16 of the Champions League, will be able to play their games and pay their players while broadcasters will be permitted to show their matches on television.
Only fans who have already purchased tickets or who have season tickets will be allowed to attend matches, the government said, while no new merchandising sales will be permitted.
The club shop has put up a notice saying it is closed due to the latest government announcement.