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SALFORD CITY REDS £1.5M DEBT TO SALFORD COUNCIL ON THE NEVER NEVER
 

Star date: 18th March 2013

HUGE SALFORD REDS LOAN REPAYMENT DELAYED FOR YEARS

Salford Council's huge loan to Salford City Reds now won't be paid back for years, as the original schedule for debt repayments has been torn up in a complicated deal involving the old Salford Football Club Company 1914 and the new Marwan Koukash company Salford City Reds (2013).

Just when Salford Council needs the cash to stave off cuts, it won't be available in the immediate future.

Full details here…


The old Salford City Reds company, Salford Football Club Company 1914, controlled by John Wilkinson, owes almost £4million to debtors, including £1,583,071 to Salford City Council, almost £500,000 to HMRC and £377,389 to Peel Land (Red City).

The extent of the Reds debts have been revealed as a complicated CVA (Company Voluntary Agreement) was backed by the majority of its creditors last week. Interestingly, Salford City Council was classed in the official Companies House document as an `Unsecured Creditor'.

The Salford Star spoke this morning to Andrew Rosler, of Ideal Corporate Solutions which is supervising the CVA, who said that the repayment of Salford Council's loan will now be "spread over time".

Adding that the CVA, which incorporates the old Salford Football Club Company 1914 and the new Marwan Koukash vehicle, Salford City Reds (2013), was "very unique", he explained that this was the best way for Salford Council to get its money back, while allowing Koukash financial space to invest in the new company.

The Business Desk is reporting today that Salford Council "will receive 16% [of the £1.5million loan] over the next five years. The remainder [£1,260,000] will come an unspecified time after that…"

Under the original terms of one Salford Council loan for £1million to the Reds, repayments were scheduled at a rate of £50,000 every three months until March 2017, beginning from June last year (see here). This is now not going to happen. There was a further £500,000 loan of which the original repayment details have not been made public.

The Business Desk is also reporting that "A further £82,000 is owed to the stadium company, a joint venture between Peel and the Council", although this doesn't appear on the Companies House document.

While Koukash has agreed to pay the debts of the old Wilkinson company, these are being spread out over a much longer period of time (so long that no-one appears to be putting a date on it), and it seems that everything is under a Voluntary Agreement, rather than a legally binding court ruling.

Back in February, when the Salford Star tried to find out how the £1.5million loans would be paid back to council tax payers, the Council replied…

"It's no surprise that the Salford Star should respond so negatively to an agreement that is good for the council, good for the Reds and good for the city. But every silver lining has a cloud, eh?" (see here)

Salford Council has also refused to answer a Freedom of Information request from the Star dating back to December about the full extent of the loans, which is now subject to an Internal Inquiry.

When Ian Stewart was elected Salford City Mayor, he promised more transparency. Until Salford Council gives the public the true facts of all public money loaned to Salford Reds, and exactly how it will be paid back, that promise is looking more than empty.

20th March 2013 - UPDATE - click here
 

insider wrote
at 5:21:13 PM on Tuesday, March 26, 2013
The Chesters Hotel shown on here is on Stretford Rd Old Trafford. Its is owned by ex Salford Reds Chairman John Wilkinson. So why is it hsown as owing money? salford Council use that hotel for the twin town visitors form France . Salford Council do like to line Johnny Wilkinson's pocket!
 
Bernard Brough wrote
at 4:53:44 PM on Tuesday, March 19, 2013
Another example of the lunacy going on at the funhouse. I'm disturbed that there are so many people of the opinion that this is a good thing. The poorest people of this city are being hammered, but it's fine we have a rugby club. And what in the name of sanity has a few crumbs being thrown to low paid council workers got to do with this story? And for those of us with such a huge intellect that they get the point, share it with us please.
 
not a brain dead labour voter wrote
at 8:27:13 AM on Tuesday, March 19, 2013
@ micheal false, it would of been better not putting council tax payers money in to a private businessman's back pocket in the first place. that's good business sense
 
Michael Felse wrote
at 5:28:53 AM on Tuesday, March 19, 2013
It is good business to have achieved a CVA agreement. I congratulate Salford Council legal team for having put in place the best final solution. Whatever we get paid back is going to be better than nothing. I hope our City Council will work with Salford Reds to build new hopes and opportunities for sport is Salford. We have young talent in our schools that could one day make Salford proud that Salford Reds was not driven into the ground by its creditors.
 
Anti Spin wrote
at 3:35:33 AM on Tuesday, March 19, 2013
Onlooker, don't forget the 600 staff who are currently just getting by, who in april are being robbed of upto 5% of their salary, when this happens in Cyprus the world calls it theft, when it happens in salford by using divide and rule tactics the council says all the victims are happy to be shafted.
 
Donkey wrote
at 1:34:19 AM on Tuesday, March 19, 2013
Well "Salfrod Red MUFC" ---Whether you think that rugby is a game for donkeys or not, it still looks like they are getting the loan at either a very low interest rate or no interest rate at all. They are a business and could go to a bank for the loan. Maybe they did and the banks thought that they were a bad risk? So Salford council decides to throw money at them thinking that it will be a "good investment" (sic). Go and ask a bank how much interest they would charge on a 1.5 million pounds loan? It all looks dodgy. They should have stayed in Salford at the willows.
 
MARY FERRER wrote
at 1:34:14 AM on Tuesday, March 19, 2013
what happened to the agreement that the loans would be paid back when houses were built and sold on the former Willows ground.So what happens to the land? if it's sold or built on, what will happen to the money? What happened to the hair brain (Buy lease back on car park) Way of getting OUR money back.That was £250.000,I think.Another loan by the back door. So what have we got to show for all these loans that I still think are well over £2million.A bloody couple of Harold Riley paintings. What will happen in 2017,do we get the rest back in a lump with LOTS & LOTS OF INTEREST. Yes in your dreams. Wave bye bye to getting anything back.
 
Onlooker wrote
at 1:33:13 AM on Tuesday, March 19, 2013
No word on the 1200 lowest paid council staff who will benefit from the Living Wage then?
 
Peter W wrote
at 1:33:04 AM on Tuesday, March 19, 2013
Misses the point entirely. Poor reporting.
 
julian caine wrote
at 1:16:54 PM on Monday, March 18, 2013
Just another fine mess salford city red's and it's council n mayor have got us into, the loan will never be repaid as the crowds they get means they cant even breakeven never mind repay debts that have been saddled onto council tax payers.
 
Gaz Shaw wrote
at 11:04:25 AM on Monday, March 18, 2013
It's grim reading and isn't going to help the reputation of the club albeit now in different hands. But I'm struggling to see what the alternative was to this CVA. Salford City Reds were probably going bust within a year or so and bleeding its directors dry might not have scratched the surface either.
 
Salfrod Red MUFC wrote
at 11:03:49 AM on Monday, March 18, 2013
So the council will get their money back, but because it's not an instant repayment the Star go native once more. Anyone would think they'd be glad to see the back of the only professional sports club representing the City of Salford...
 
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