Lord Ashcroft loans another £500,000 to Watford FC, Vicarage Road, Watford Hertfordshire England
Lord Ashcroft loans another £500,000 to Watford FC,
Published: 29th June 2010
Watford's major shareholder Lord Ashcroft has loaned the club another £500,000.
The deputy chairman of the Conservative party has loaned the football club the money to “assist with the working capital requirements of the business” as the Hornets wait to conclude the pending bonds issue.
Watford's chief executive Julian Winter has stated on a number of occasions that Lord Ashcroft is willing to loan the club money until the bond issue is complete.
Lord Aschroft owns a 37.16 per cent stake in parent company Watford Leisure Plc through Fordwat Limited and has now loaned the club more than £6.5m.
That money will be cancelled out when the £10.142m bond issue with detachable warrants is completed in the coming months.
The bonds issue documentation is almost complete and once it is, it will then be sent out to those eligible and the shareholders will then have a chance to subscribe.
The full statement released to the Stock Exchange on Friday and put up on the Watford Leisure website this afternoon can be found below.
It read: “Watford Leisure announces that yesterday Fordwat Limited (“Fordwat”), a substantial shareholder in the Company, advanced a further £0.5 million to the Company’s 96 per cent. owned subsidiary, The Watford Association Football Club Limited (the “Club”), under its existing secured loan agreement with the Club (the “Further Advance”) to assist with the working capital requirements of the business.
The amount outstanding under the secured loan is now, in aggregate, approximately £6.55 million (including accrued interest). The loan is repayable on demand and accrues interest at the rate of 4.5 per cent. above the base rate from time to time of Barclays Bank plc (except in default when the rate rises to base rate plus 7.5 per cent.). Security is by way of a guarantee and debenture over the Vicarage Road Stadium ranking behind certain other pre-existing secured creditors.
The provision of the Further Advance is deemed to be a related party transaction under the AIM Rules for Companies. Accordingly, the directors of the Company consider, having consulted with Strand Hanson Limited, that the terms of the Further Advance are fair and reasonable insofar as the Company’s shareholders are concerned.
The secured loan is intended to be cancelled as part of the Company’s proposed issue of secured bonds with detachable warrants in due course.”
