Further financial blow for Town
IPSWICH Town have been dealt a further devastating financial blow.The club, already more than £36million in debt, have failed to write off a significant proportion of that sum.
By Mel Henderson
IPSWICH Town have been dealt a further devastating financial blow.
The club, already more than £36million in debt, have failed to write off a significant proportion of that sum.
The Evening Star understands that talks between the club and Morley Fund Management, from whom Town borrowed £25million six years ago to carry out extensive ground improvements, have failed to scale down the debt.
Morley is a subsidiary of Aviva, the world's fifth largest insurance group and the biggest in the UK, which also owns Norwich Union.
Following their relegation from the Premiership in 2002, and their subsequent plunge into administration the following year, Town have struggled to cope with the initial repayment schedule, in which interest payments account for more than £2 million per year.
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They have already rescheduled the debt, which has since spiralled to more than £28 million, and Norwich Union now owns 15 per cent of the club in return to agreeing to a three-year interest “holiday”.
Town also owe £8 million to bankers Barclays, for the overdraft prior to administration, and the Bank of Scotland, in mortgage repayments with regard to the Playford Road training complex.
The news comes at a time when on-the-field performances have also slumped, Ipswich winning just four of their 12 league games this year and currently lying 17th in the table.
This could have an adverse effect on season ticket sales, the lifeblood of the club, while also damaging their attempts to recruit players and improve their promotion chances.
Ipswich issued a brief statement on behalf of chief executive Derek Bowden, which said: “Conversations with our lenders are on-going.”
A spokeswoman for Morley Fund Management said: “I am unable to comment on the details of this issue as any discussions that may occur between Morley and Ipswich at any time would always be conducted on a confidential basis.”
Town have the biggest debt of the 24 clubs in the Coca Cola Championship and two previous share issues have failed to raise the sums required to sufficiently improve the club's financial position.
The club have reported losses in excess of £3 million in each of the last two financial years and only a significant reduction in the overall debt will enable them to attract potential new investors.