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Last night's meeting of Hereford United shareholders were given a lot of information on the current financial situation by chairman David Keyte.
Fifteen years ago this month the club was in an even worse situation as this article, lifted from the BN archives, points out.
Oct 26th 1997:
HUISA have released some details of the current financial position at Edgar Street.
The £500k from the BS Group is a loan which the Club has to pay back whether relocation goes ahead or not. The BS Group are charging interest on it at an undisclosed amount, but this is likely to be several points above the Bank's base rate. The BS Group may be prepared to make another £250k "loan" in return for another 25% of the relocation deal. The "London Property Developer" wanted a similar return although at least his £250k would have been a "punt" not a loan. The impression that I got of the latter deal, was that its development extended to no more than a few phone calls and PH (Peter Hill - HUFC Chairman) had yet to meet the individual making the "offer". Businessman of the Year is obviously in the bag again then!!
There were two other offers in the Summer apart from that of the BS Group. One of these was from Sun Life who were prepared to pay £750k for essentially the same deal, but on more favourable terms for the Club. Some of the money would also have been a "gift" to the Football Club, not a loan. PH blames Barclays Bank for not giving the Club the two weeks they needed to complete the deal. Ask yourself the question: What Bank Manager in his/her right mind, faced with the choice between £500k and £750k, provided evidence was available of both deal, as PH claims it was, is going to refuse a cash strapped Club the time (only two weeks) it needs to bring in 50% more cash on better terms? No I don't believe it either! So why did they go for the BS Group, do you think????
All the Club's debts are due to the loss of 50% of the League Funding, the Dean Smith Tribunal, the "New Directors" not coming on Board and of course the Fans not coming through the turnstiles! (I kid you not, he said all this!). Thankfully his prudent and expert financial planning had averted a real crisis!!
The BS Group get 25% of any profit from the sale of Edgar Street for re-development, the Club gets 75%. This is after any fees and charges have been paid.
PH has resigned from Cosworth Developments for undisclosed reasons.
PH has a letter from the Football Licensing Authority stating that Edgar Street will be obsolete by 1999. He wouldn't show it to us.
It will cost at least £2.5m, to bring Edgar Street up to standard. I asked for sight of the professional costing to support this figure. He promised to send them to me but they must have got lost in the post. PH said we might get grants for £0.75m - £1m for the work.
A new stadium would cost £5-6m, and if the Local Authority put their name to it, 90% grants would be available - according to PH.
The Inland Revenue and Customs and Excise are owed £90k each. They are preferential creditors. The Club have been repaying both at a rate of £10k/7.5k per month respectively. Last month's payments were not made!
The Bank have reduced the overdraft from £200k to £125k, and the Club are at the limit. PH said that the Bank would want this repaid from the £250k, if it is raised and would then want to change the formula for agreeing the O/D (i.e. they would want to reduce it). The Chairman and other Directors have guaranteed the largest part of the O/D, so why let them get of "Andy Graham" free??
"Last week" Babcock Wines launched a winding up order, against the Club for unpaid bills of £2.9k, which the "Directors" paid, to stop the action.
HUISA have released some details of the current financial position at Edgar Street.
The £500k from the BS Group is a loan which the Club has to pay back whether relocation goes ahead or not. The BS Group are charging interest on it at an undisclosed amount, but this is likely to be several points above the Bank's base rate. The BS Group may be prepared to make another £250k "loan" in return for another 25% of the relocation deal. The "London Property Developer" wanted a similar return although at least his £250k would have been a "punt" not a loan. The impression that I got of the latter deal, was that its development extended to no more than a few phone calls and PH (Peter Hill - HUFC Chairman) had yet to meet the individual making the "offer". Businessman of the Year is obviously in the bag again then!!
There were two other offers in the Summer apart from that of the BS Group. One of these was from Sun Life who were prepared to pay £750k for essentially the same deal, but on more favourable terms for the Club. Some of the money would also have been a "gift" to the Football Club, not a loan. PH blames Barclays Bank for not giving the Club the two weeks they needed to complete the deal. Ask yourself the question: What Bank Manager in his/her right mind, faced with the choice between £500k and £750k, provided evidence was available of both deal, as PH claims it was, is going to refuse a cash strapped Club the time (only two weeks) it needs to bring in 50% more cash on better terms? No I don't believe it either! So why did they go for the BS Group, do you think????
All the Club's debts are due to the loss of 50% of the League Funding, the Dean Smith Tribunal, the "New Directors" not coming on Board and of course the Fans not coming through the turnstiles! (I kid you not, he said all this!). Thankfully his prudent and expert financial planning had averted a real crisis!!
The BS Group get 25% of any profit from the sale of Edgar Street for re-development, the Club gets 75%. This is after any fees and charges have been paid.
PH has resigned from Cosworth Developments for undisclosed reasons.
PH has a letter from the Football Licensing Authority stating that Edgar Street will be obsolete by 1999. He wouldn't show it to us.
It will cost at least £2.5m, to bring Edgar Street up to standard. I asked for sight of the professional costing to support this figure. He promised to send them to me but they must have got lost in the post. PH said we might get grants for £0.75m - £1m for the work.
A new stadium would cost £5-6m, and if the Local Authority put their name to it, 90% grants would be available - according to PH.
The Inland Revenue and Customs and Excise are owed £90k each. They are preferential creditors. The Club have been repaying both at a rate of £10k/7.5k per month respectively. Last month's payments were not made!
The Bank have reduced the overdraft from £200k to £125k, and the Club are at the limit. PH said that the Bank would want this repaid from the £250k, if it is raised and would then want to change the formula for agreeing the O/D (i.e. they would want to reduce it). The Chairman and other Directors have guaranteed the largest part of the O/D, so why let them get of "Andy Graham" free??
"Last week" Babcock Wines launched a winding up order, against the Club for unpaid bills of £2.9k, which the "Directors" paid, to stop the action.