Cash woes decision 'weeks' away for Town
IPSWICH Town chief executive Derek Bowden last night admitted it will be weeks rather than days before the club's financial future is decided.Administrators Deloitte & Touche are in the middle of talks with the club's most significant creditors of a total debt believed to be £45million.
By Derek Davis
IPSWICH Town chief executive Derek Bowden last night admitted it will be weeks rather than days before the club's financial future is decided.
Administrators Deloitte & Touche are in the middle of talks with the club's most significant creditors of a total debt believed to be £45million.
Discussions with creditors were held last weekend and more will be held this week and next as the club and administrators try to finalise two five-year plans which they can present in an attempt to get a Company Voluntary Agreement (CVA) accepted.
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Ipswich Town applied to the High Court in London to go into administration more than four weeks ago and at the time of announcement hoped to present the CVA within "three or four weeks".
But Mr Bowden last night confirmed: "We have been working as speedily as possible and talks have been positive and construction.
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"But there are a large number of parties involved and talks have ebbed and flowed. We are still some way off reaching a final agreement and it will be a matter of weeks rather than days before everything is concluded."
The administrators have to get agreement from the most significant creditors, who in this case are the bondholders, the bank, the Crown and the players.
All creditors vote by value and a CVA has to be agreed by 75% of the outstanding debt, rather than three-quarters of the creditors involved.
Mr Bowden has outlined the best of outcomes and the worst of outcomes, with creditors accepting the CVA and promotion to the Premier League the answer to everyone's prayers.
The other plan if creditors accept the CVA is working on the club being in Division One for the next five years, with no cup runs and no increase in television revenue.
The worst outcome would be for the CVA to be rejected. The administrator would then look to sell the business and assets to a new investor group. A new CVA would then still have to be accepted with the new owners.
At the moment no serious bidder willing to take on the debts is in the wings.
But Mr Bowden last night vowed that football would still be played at Portman Road, even if the worst possible scenario came true.
The club secured a £25m bond to be repaid over 25 years with interest-only payments for the first two years to develop the North and South stands. The loan is secured against season ticket sales of 8,000. The club sold 19,000 last season and even accepting a large decline in uptake next season, the club is confident of selling the minimum amount required.
But Mr Bowden admitted: "If the club were to default on the payment the bondholder could take over the club, but the ground has to be used as a sports stadium. So, in reality, it will always need a football club playing there.
"In this situation it would almost certainly be rented back to the club, in a similar way that has happened at Leicester."
Mr Bowden has welcomed suggestions of a Supporters' Trust and while he accepts that a representative would be invited to board meetings, they would not be given a place on the club's board.
He has also said that last month Newcastle United made a £3m bid for players Darren Bent, Darren Ambrose and Matt Bloomfield. They later offered the same amount just for the two Darrens, but both offers were rejected by the administrator after consultation with the club's senior management.
The decision is ultimately down to the administrators as they are legally running the club, and not the board of directors, until the club comes out of administration.
Mr Bowden also confirmed that Sunderland paid £1.75m for Marcus Stewart with a further £250,000 to be paid if he ever makes 40 appearances.
Birmingham paid £1.05m for Jamie Clapham and Town will get a further £300,000 at the end of the season if Steve Bruce's side avoid relegation. That looks likely at the moment, but if City do go down Ipswich would still get the bonus payment if they bounced straight back up.
Town also have Matteo Sereni and Ulrich Le Pen out on loan to Brescia and Strasbourg respectively, and Mr Bowden insists they are not being paid by the club while they are away.
Even if Ipswich did win promotion to the Premier League via the play-offs manager Joe Royle will have to wheel and deal in the free transfer and loan market. He would also be able to keep a larger number of his current squad but if Town fail to reach the promised land many fans' favourites could be forced to leave.