NEWS : BREAKING: Council agrees multi-million pound bailout of Ricoh Arena (1 Viewer)

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COVENTRY City Council has today agreed a dramatic new plan to financially prop up the Ricoh stadium company amid an ongoing dispute with the Sky Blues. Leading councillors said they are intervening with a new loan arrangement to safeguard “a publicly funded asset” and protect Arena Coventry Ltd, the company half-owned by the council and the Alan Edward Higgs Charity. ACL has been affected by Coventry City Football Club’s refusal to pay over £1million in rent since March last year – now the subject of legal wrangling. There had been specualation that Yorkshire Bank – which provided funding for the development of the stadium with a £21 million mortgage – was considering calling in the debt because of the uncertainty over the rent issue. This left the door open for Sky Blues’ owners Sisu to buy the Ricoh at a knockdown price. A full council meeting this afternoon unanimously approved the plan in private business – with no discussion in public – for reasons of “commercial confidentiality”. The unprecedented and historic move will see the council pay off pay off the outstanding mortgage with Yorkshire Bank – thought to still be in the region of £20 million – with the council effectively becoming ACL’s bank, according to council leader John Mutton. ACL will pay back the council in instalments over a longer period at lower interest rates. No further financial details about the loan arrangment – or any council borrowing to enable the move – have been made public but the council claims the deal will bring a “net surplus to council taxpayers”. Council leaders say they want to safeguard what is a “publicly funded asset”, designed to bolster the Coventry economy and create jobs. In a statement issued to the Telegraph, council leader John Mutton said: “We’re now effectively acting as a banker to ACL, which will see the council pay off the current loan arrangements with its current lender the Yorkshire Bank. “There is no net cost to the council – this is a commercial arrangement that will provide a modest surplus to plough back into services and jobs. “This loan is not about putting money into the football club; no cash is being put into CCFC by the council; this would be unlawful and inappropriate. “We’re working with ACL and ACL’s bankers to restructure ACL’s loans over a longer period, so it can provide a solid business platform now the club has been relegated to League One, although of course we all hope we will soon be moving back to the Championship. “As a result, the interest that ACL now pays on its loan will go to the council, some of it helping to support jobs and services, rather than to the bank. “It’s up to ACL and the club now to find a way forward on the rent issue; we know that ACL is totally committed to doing this, and we hope the club’s owners will be committed to doing so too.” Coventry City fans’ groups, and Conservative councillor John Blundell, have publicly stated in recent months that Sky Blues owners Sisu’s refusal to pay its monthly £100,000 rent could potentially push ACL into administration. Were ACL to go into administration, the stadium could potentially be sold at a lower market rate. Coventry City Football Club chief executive Tim Fisher recently publicly speculated ACL could be heading for administration. He blamed other ACL financial pressures including loss of income from stadium sponsorship and naming rights. He and Sisu have insisted the £1.2million annual rent is too high, and were last year in aborted discussions to lower it and for the club to buy at least a half stake in the stadium. ACL’s most recently filed accounts last year showed profits of £470,000. The loss-making football club, relegated last summer, has long maintained acquiring revenues from



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