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SALFORD RED DEVILS GET ANOTHER THREE YEAR HOLIDAY TO PAY SALFORD COUNCIL DEBT
 

Star date: 9th November 2017

SALFORD CITY COUNCIL WAIVES LOAN DEBT FOR A FURTHER THREE YEARS

Salford City Mayor, Paul Dennett, has agreed to suspend loan debt payments by Salford Red Devils for a further three years. In December last year, the Council agreed a twelve month payment 'holiday' on the Reds' loan, which was due to end at Christmas but that 'holiday' has now been extended until 2020.

This latest decision, taken by the Mayor alone with 'special urgency', means that Salford Council will have received nothing from the rugby club for over five years. The total debt now stands at over £1million.

Full details here...


Back in the days when John Wilkinson owned Salford Reds, Salford Council contrived around £1.5million of loans to his company Salford Football Club Company (1914) Limited.

When Marwan Koukash took over the club in 2013 he agreed to take on that debt, and over £1million debts to other creditors, via a Company Voluntary Arrangement (CVA) with his company Salford City Reds (2013) Limited.

The terms for the CVA, the Salford Star has understood, were that Salford Council would receive 4/25ths of what it was owed - a total of £253,291 - by 2018, with the rest of the debt - £1.33million – spread until 2038, interest free.

The CVA payments to the Council were to be paid directly to the Council from RFL (Rugby Football League) amounts due to the club from tv rights and stuff. However, in summer 2015, the then City Mayor, Ian Stewart, agreed a payment holiday on the CVA for 17 months, meaning that the club didn't have to pay the Council and other creditors for that period.

The 'holiday' was extended by current City Mayor, Paul Dennett, for a further twelve months last Christmas. And now the Mayor has extended the 'holiday' for a further 36 months, in a decision taken under 'special urgency',with no input from any other councillors.

"The beneficial owner of Salford (2013) is transferring the ownership of the club, the
aim is to be self-sufficient with no further funding from the benefactor" states the official Council 'holiday' decision notice "Salford (2013) requires a period to consolidate its finances. The supervisor will then determine the level of payments that Salford (2013) would be able to make based on the previous year's income and expenditure and the projections for the year ahead."

From this statement, it looks like Koukash has washed his hands of the club, and handed a financial basket case over to a new Trust (of which no public details are forthcoming as yet) that will now be responsible for historic debts. Yet no Salford councillor or Mayor has yet taken responsibility for the historic financial cock-up that gave rise to loans and grants to Wilkinson's Reds in the first place.

According to the latest Salford City Council accounts for 2016/17, the long term Salford Reds debt is £1.061million, up from £1.038million the year before.

As part of the payment holiday agreement, the Council has insisted that "SFC 2013 settles its debt immediately with the council of £17,000 for ICT services previously delivered"; that "SFC 2013 makes a payment of £30,000 each year into the CVA to distribute to creditors"; that "SFC 2013 commits to honouring its Commercial Agreement and playing all of its home games at the City of Salford Community
Stadium"
; and that it "retains the club name"...


* Salford Council is also currently helping out Salford Red Devils with an advertising campaign to push tickets for the new season, using an image by Salford Star photographer, Gareth Lyons.

Steve wrote
at 11:19:52 AM on Saturday, November 11, 2017
Not sure the Mayor had a choice, call in the loan, in which case the club will certainly have gone under, or give it more breathing space in the very unlikely event it can prove itself to be a going concern. With very low crowds , one crowd was 1400 last season, it is going to require more than a miracle to achieve sustainability. With the RFL opening its net to bring in teams from Europe and North America, the club will struggle to stay in the top tier anyway.
 
Bob wrote
at 6:27:09 AM on Friday, November 10, 2017
When Dr k took on that debt, no one else was interested in taking over the club. The club would have gone the same way as Bradford. It was skint. I do not know the details, but the deal was probably along the lines of that the money would be repaid when the club was generating enough revenue etc. Dr K is not stupid when dealing with money,especially when dealing with fools. If it had gone into liquidation, Salford Council would have got sweet FA. On top of that , with no rugby club,they would probably have had to flog the stadium as well, what would that be worth? a fraction of what they paid out for it. At least there is a chance they will get their money back, however slim that may be. Also, we still have our rugby club.This is the one thing left that is proud to use the Salford name.Just think about it,when you say the word WIGAN. What is the first thing that comes to your mind.Its not the place is it? Anyway, whilst we are on about the odd one point odd million or so, what about the one point odd million the clowns gave to Salix to house homeless people.How many homeless, and I mean homeless,people have Salix housed with this money?The Star should get to grips with this one. This money they have been given is from a government fund to help the homeless. It is given to councils to dish out for this purpose. The Star should put it to Salix to say how many people has been housed. I am not going to shut up till I get the answer.
 
kenneth mozley wrote
at 1:14:17 PM on Thursday, November 9, 2017
absolutely disgraceful decision by mayor who would not be doing it if it was is own personnel money. with all the cut backs he as agreed in Salford he still props up a club that will eventually go to the wall through lack of public support that should tell him something DISGUSTING DECISION
 
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