Club Statement - September 26, 2014
26th September 2014
PLYMOUTH Argyle Football Club Limited (‘PAFC’) has today 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 certain creditors (known as ‘football creditors’). The total value of these debts was £3.64m. It paid £1m of these assumed liabilities up front with the balance payable over five years and with a ‘balloon’ payment of £1.64m in October 2016. The monthly payments have all been paid on their due dates and £137,000 of the balloon payment has been accelerated and paid out of non-budgeted income. The remaining balloon payment of £1.5m remains significant, however.
The settlement of these obligations will be funded by an £800,000 loan borrowed by PAFC from Plymouth City Council (‘PCC’). The loan is on commercial terms and is secured with collateral provided by PAFC’s shareholders.
The loan from PCC will be sufficient to settle asignificant majority – but not all – of the football creditor debt at a discount of 50%.
Martyn Starnes, Chief Executive of PAFC said: “I am delighted that PAFC is able to make this offer, and the Club is grateful to PCC for providing it with the loan.
“PAFC and shareholders have had to fund substantial costs associated with the administration and development plans for the new grandstand whilst maintaining a competitive footballing budget. This transaction and a new grandstand are the last two parts of the jigsaw puzzle in returning the club, not only to financial sustainability, but also to progressing back up the leagues. The future looks exciting.
“The offer is good not only for the Club – it provides an opportunity for football creditors, if they choose, to accelerate and secure repayment of the debt incurred to them prior to administration.
“While the loan funds the majority of the remaining payment, it does not fund all of it, so football creditors will be dealt with on a first come, first served basis.”