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Debenture Raises Fear About City's Future
Published : 23 May 2012 11:47:23
An Administrator gives his view on the debenture
The debenture lodged with Companies House on March 19th by Caymen Islands based Arvo Master Fund Ltd is causing concern about the future of Coventry City FC.
In that debenture, which has been previously featured on this website and which covers every asset from the club website to the gym equipment at City's Ryton training ground, there is a clause which 'lists as "fixed security" any property the club aquire in the future, which may include a share of the Ricoh Arena, which owners SISU are keen to get their hands on at the moment.
Brendan Guifoyle who has been the administrator for a number of football clubs including Leeds United, told the CT's Les Reid: “Hedge funds are routinely domiciled in the Cayman Islands for the purposes of tax minimisation and to retain a higher level of confidentiality.
“What assets does the football club have and why take security now? “A debenture is like the mortgage on my house, I have borrowed money to buy my house and my mortgage lender has a charge on my house to secure my borrowings in case I don’t repay my mortgage.
“The Sky Blues have undoubtedly borrowed money from Sisu, and they are now seeking to secure the loans on the assets of the club.
“The problem with that is there doesn’t appear to be any significant assets in Coventry City Football Club.
“I hear anecdotally that the immediate funding requirement over the close season is nearly £3million.”
Read More http://www.coventrytelegraph.net/coventry-city-fc/coventry-city-fc-news/2012/05/23/fears-grow-over-coventry-city-going-bust-as-cayman-islands-link-revealed-92746-31025287/3/#ixzz1vghgtZQR