Ipswich Town halve their debt
By Derek DavisChief Football WriterIPSWICH Town have slashed their long-term debt to £31million from a worst-case scenario of £70m.Blues chief executive Derek Bowden has assured supporters the club was in complete control of its finances, was operating without an overdraft facility and had no other short-term debts.
By Derek Davis
Chief Football Writer
IPSWICH Town have slashed their long-term debt to £31million from a worst-case scenario of £70m.
Blues chief executive Derek Bowden has assured supporters the club was in complete control of its finances, was operating without an overdraft facility and had no other short-term debts.
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With Marcus Bent the latest player to leave on loan, Ipswich Town are now in a position to bring in a new player or two, but warned they cannot overspend by as much as one penny.
Mr Bowden said: “We are in much better shape than we were before the administration. The debt before administration was £44m, the debt now is £31m. The debt has not disappeared, it has been rescheduled.”
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Norwich Union - which provided the loan bond to pay for the rebuilding of the South and North Stands - is owed £25m, while Barclays Bank is owed £5m.
Mr Bowden admitted the worst possible figure for Town's debt had at one stage been £70m, but that took into account all the player contracts and debts which would have been due if the club had gone out of business.
But in reality the debt the club had to restructure during administration was £44m.
Mr Bowden also pointed out significant wage reductions had been made on and off the pitch.
Town are looking to reduce their wage bill to £5m by the end of the season if they are not promoted and are on course to achieve that.
The club will also reduce their wages costs further by the end of the following season when the last of the players who were given lucrative contracts during Town's heyday in the Premiership will have ended or been renegotiated.
Ipswich Town chairman, David Sheepshanks, defended the club's decisions to accept low bids for players and pointed out it was very much a buyers' market, with few clubs in a position to purchase players.
He also made it clear selling players, and more importantly getting them off the wage bill, actually prevented the Blues from going bust.
“We have had to operate in the most hostile environment that there has ever been, but we have got ourselves in a much better position now,” said Mr Sheepshanks.
“We have rescued the club in the face of appalling adversity. We are secure, although it is still very tight. The final part of the jigsaw in terms of the financial rescue plan is to have a share issue.”
Mr Bowden said the share issue was on track to go ahead next month with the club needing to raise at least £1m to satisfy the Company Voluntary Arrangement, but hoping to beat the £2.2m raised by Norwich City in their issue.
Mr Sheepshanks and Mr Bowden were speaking on a live broadcast to Ipswich World subscribers, answering questions posed by Blues fans.