wonder how many points they'll get deducted for this :-)
Betty
Deal with Co-op Bank will slash Sheffield Wednesday's debts by half
Published Date:
14 February 2009
By Rob Waugh
SHEFFIELD Wednesday have secured a provisional agreement to halve the
club's multi-million pound debts with the Co-op Bank, the Yorkshire Post
can reveal.
The deal would see the Owls effectively shake off the stranglehold the
bank has held on the club's financial future and pave the way for
planned investment.
Wednesday currently owe around £21m to the Co-op and restructuring the
debt is key to bringing in an investment package worth around £50m.
The bank is agreeing to forego half the debt on the condition that the
club also achieves agreement with other key shareholders over
outstanding loans and secures the injection of funds from new backers.
Wednesday have so far remained tight-lipped over the identity of the
investors but it is understood they are based in the UK, the US and
India. The club is in a much stronger position to secure investment if
new money directly benefits the business rather than simply servicing
long-term debts.
The Co-op Bank is seeking to reduce its involvement in football clubs
nationally and although yesterday's statement from Hillsborough did not
detail the amount the bank is prepared to forego, it is around half.
The statement said the club had reached an outline agreement with the
bank which would "result in the club being in a sound financial position."
For the agreement to go through, Wednesday also need to reach deals with
current directors Geoff Hulley, Ken Cooke and Bob Grierson and former
directors Dave Allen, Keith Addy and Mick Wright who all have loans –
totalling around £3.35m – in the club.
If the bank is preparing to forego such a significant sum, it is highly
likely the loanees will be expected to accept less than full repayment.
Yesterday's statement said "…positive discussions with the other major
creditors and certain key shareholders are at an advanced stage and
progressing well. It is believed that a satisfactory outcome will be
achieved thus allowing a definitive agreement to be put before potential
investors."
If everything goes according to plan, Wednesday hope to announce the
full proposals by the original deadline set for securing new investment
– March 31. An extraordinary general meeting of shareholders is set to
be called to approve a new issue of shares reserved for the new backers
to allow them to take control of the club.
Wednesday chief executive Nick Parker, who took up the post when Lee
Strafford became chairman last month, said: "Long-term financial
stability is obviously a pre-requisite before any professional investor
will put money into a business and these positive discussions pave the
way forward for the club.
"We thank all the major creditors and parties involved for their support
during this complex and protracted process and look forward to
delivering a successful and financially secure future for Sheffield
Wednesday."
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Sorry Macca - it's the curse of Bates old lad
