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Ricoh buyout talks stalled
Published : 29 Jun 2012 09:22:08
The saga continues
It has emerged that talks between the owners of Coventry City football club, SISU and the city council, who own half of the Ricoh Arena, have stalled and there are no immediate plans for further meetings.
The other partner involved in the negotiations, the Higgs Charity, who own the other 50% of the Ricoh Arena are keeping quiet on whether they are still speaking to SISU. The Higgs Charity are known to be keen to sell their 50% stake in Arena Coventry Ltd (ACL).
Coventry City published losses amounting to £6.7 million for the year ending May 31st 2010, which added to the previous losses now mean the club are £54.9 million in debt. These losses are expected to increase even more following relegation to League One.
The auditors issued a warning on publication of the club's accounts expressing concerns over the future financing of the club despite assurances by the shareholders to continue fund the club for another 12 months.
The auditors BDO, said in a letter they included with the club's accounts, warned they had a "fundamental uncertainty" over a series of key issues. These issues include falling attendances and revenue, made worse by relegation, failure to pay rent in protest over the amount payable and the staff costs.
The letter, in part, said, "These conditions….indicate the existence of a fundamental uncertainty which may cast significant doubt over the company's ability to continue as a going concern."
Coventry City's chief executive Tim Fisher yesterday said that the club still see ownership of all or at least a share of the Ricoh Arena as vital in making the club more financially viable.
The Higgs Charity's Peter Knatchbull Hugessen issued a firm, "No comment," when asked if the charity was still in talks with SISU, he did go on to say, "People shouldn't read into that that they are, or they are not."
The Higgs Charity rejected the first offer made by SISU to purchase their 50% stake, but they are keen to sell when the time and price is right.
The council are not in any hurry to sell their shares, in the Ricoh. Deputy council leader George Duggins, who along with council leader John Mutton are the chief negotiators from the council in round table talks between themselves, SISU and the Higgs Charity, said, "Nothing is happening from the council's point of view. No further meetings are planned at the moment.
"I've had no feedback on where the Higgs charity and SISU are with discussions. I notice the football club have again mentioned getting revenue from the Ricoh, but that's not the answer. That would only be part of the answer.
"The football club's owners need to consider how they are going to effectively answer the problems more than sharing the Ricoh. Sisu have got to come forward with a business plan to effectively get the club into a position of challenging to get back into the Championship.
"They've talked about some of the losses they have incurred. That must surely be because they got relegated in the first place. If they can get to the stage of having a successful football team which is there or thereabouts with promotion or the play-offs, the revenues will increase.
"It was inevitable that gates have dwindled because of the total lack of success that City supporters have endured since leaving the Premiership. It's remarkable the core support has stayed as loyal as it has given so many false dawns. It's little wonder many supporters are disillusioned and have stayed away.
"The support is still there. It's up to the owners to tap into the reservoir of support and get people up there to games. They won't do that by continuing with fire sales of players."
If the council was unhappy with any deal reached between the Higgs Charity and SISU over the sale of their stake in the Ricoh Arena, they could veto the sale, so the council need to be in agreement with any deal done between SISU and the Higgs Charity.