Creditor Settlement Update
PLYMOUTH Argyle can report a significant reduction in the club’s overall debts following settlements with creditors.Earlier this year, Plymouth Argyle Football Club Limited (‘PAFC’) announced an offer to settle certain obligations assumed by it on acquisition of the club.
When PAFC acquired the club, it agreed to take on liabilities to ‘football creditors’ to a total value of £3.64m. It paid £1m of these assumed liabilities up front, with the balance payable over five years, including a ‘balloon’ payment of £1.64m scheduled for October 2016. This balloon payment was further reduced to £1.5m from unbudgeted income.
The recent offer to settle these obligations followed an £800,000 loan from Plymouth City Council to PAFC, taken out on commercial terms and secured with collateral provided by PAFC’s shareholders.
The offer has seen a substantial amount of the PCC loan being drawn down and used to reach a settlement with more than two-thirds of the outstanding football creditors.
Argyle chief executive Martyn Starnes said: “As a result of our negotiations, we have achieved a considerable reduction in the balloon payments scheduled for 2016.
“This represents a very successful outcome for the club in reducing overall debts.”