Warwickshire businessman Michael Byng claims Ricoh Arena delays in enabling Coventry City to exit administration are preventing possible Chinese investment in the club and Ricoh Arena.He spoke out after yesterday’s Coventry City Football Club Limited creditors’ meeting ended in another adjournment until Friday - on the request of part-council owned Arena Coventry Limited (ACL).
Mr Byng believes the best hope of the stadium and club being united and sustainable - with new investment - rests in ACL signing a Creditor Voluntary Arrangement (CVA), which would end the “messy” administration and enable the club’s assets to be united in one company.
He said: “Chinese investors remain interested and have been in position for some months.
“But they are confused by the approach adopted by Coventry City Football Club’s owners and Coventry City Council to resolving the club’s problems.
“It seems clear the Ricoh Arena can only survive and prosper with a financially healthy football club, and potential investors are at a loss to understand how continued adjournments can help the situation in any way.
“What’s very unclear is what the Football League’s attitude will be over participation in the League this season and whether there will be further sanctions which further damage the image of the club.
“An adjournment until Friday just before the start of the new season suggests a motive.”
ACL claims it is a sustainable business with or without a football club. But the last ACL accounts 2011/12 recorded a £1million profit at a time when the club paid full £1.3million rent.
Administrator Paul Appleton has said if there is no agreement among creditors including ACL for CCFC Ltd to exit administration via a CVA, the company will be liquidated.
Liquidation could result in a further15-point League deduction hitting Coventry City’s Division One campaign.
The club wants the CVA to be signed to prevent liquidation, and because it cannot sign players while it continues in administration. It must also file it late accounts for 2011/12 for the transfer embargo to be lifted.
As the Telegraph revealed yesterday, ACL is seeking conditions to be attached to the CVA.
They include that the Sky Blues owners Sisu/Otium must sign a new ten-year rent agreement to play at the Ricoh - rather than going ahead with Football League-backed plans to play ‘home’ matches at Northampton Town for up to five years while a new stadium is built in the Coventry area.
The offer would dramatically reduce annual rent payments to £150,000-a-year in Divison One, and would be dependent on Sisu companies scrapping a Judicial Review application to the High Court.
It claims Coventry City Council acted unlawfully in January’s £14million taxpayer deal to buy out ACL’s mortgage debt.
Crucially, ACL’s offer ahead of Friday contains no offer for Sisu/Otium to buy any shares in the stadium, or to retain more matchday revenues such as from food and drink sales - which the club has long-sought.
It has led many fans on social media to conclude yesterday’s ACL offer is a non-starter.
Many believe it offers no possibility of agreement by Friday, regardless of whether parties including council leader Ann Lucas and Sisu boss Joy Seppala hold last-ditch talks.
If the outcome is liquidation, football insolvency expert Alan Limb of BRI (Business, Recovery and Insolvency), who is also a Sky Blues fan, believes Sisu company Otium remain favourites to emerge as the club’s owners.
He said: “If the Football League was minded to transfer the golden share (the right to play in the League) to another company and not Otium, you would think they would have said so by now.
“Paul Appleton is also an officer of the court with a legal duty to creditors. He says he has already sold the assets in Coventry City Football Club Limited to Otium.
“As things stand, it seems likely Coventry City will be playing their home matches at Northampton Town this season. I will be happy to be proved wrong.”
As we reported yesterday, ACL on Monday lodged High Court action against Northampton Town, accusing them of inducing Coventry City’s purported owners to breach a 40-year-old licence and lease to play at the Ricoh Arena.
ACL is claiming damages for breach of contract. Cobblers chairman David Cardoza argues the claim is “without legal merit”.
ACL was earlier last month considering calling on Mr Appleton to re-open the sales process of CCFC Ltd in favour of one of the other three final bidders, who lost out to Otium’s £1.5million bid.
One potential investor in Coventry City, who did not want to be named, told the Telegraph they were put off bidding once they realised there were only minor, non-material assets in CCFC Ltd.
They said the sales process was stacked in favour of Sisu related companies which constituted the majority of creditors.
Mr Byng also pulled out of the final bidding process, claiming his potential Chinese investors had been put off by the “messy” situation of having to bid for the one Sky Blues company in administration, and then having to bid to buy out Sisu - while Sky Blues boss Tim Fisher was insisting the club was not for sale.
The other final bidders for CCFC Ltd included US property investor Preston Haskell 1V, backed by former Sky Blues directors Joe Elliott and Gary Hoffman.
The identify of the two other bids have been a mystery.
The Telegraph understands they may have included an American consortium, and a bid which in some way involved former Sky Blues player Kirk Stephens.
The Telegraph has been unable to substantiate the rumour, or confirm that US investor Jeremy Schwimmer may have been among a bidding consortium.
Mr Byng claims to have potentially attracted Chinese and Asian investors into bidding for a 100per cent buyout of ACL - jointly owned by the council and Alan Edward Higgs Charity - if they could later also buy in to the football club.
He says they are predominantly interested in investing in the West Midlands rail network in advance of High Speed Rail, which would include the planned Nuckle rail line stopping at a new Ricoh station.
