Valley parade bond

The Pension Fund is receiving over £450k pa at the moment and will do so for the next 8 years with further inflationary rises due. For doing nothing, they'll receive around £4mill in rent from the club over the remainder of the lease and if we were to move elsewhere would be left with land with almost zero value once land reclamation costs are factored in.

But the bigger issue is what we would do at that point. A 25,000 capacity stadium, say, would cost in the range £40-50mill plus land costs and I wouldn't imagine the current owner being willing to commit to that sort of investment even if there were other sources of funding available. The clock is ticking on this and i'd hope that the club's long term plan has already earmarked this as the biggest issue just around the corner. Or maybe not!

 

Less optimistic ... more sarcastic!

 

No he didn't stitch us up at all. We needed the money from the pension fund to stop the club from entering administration again and probably being liquidated. We still owed around £14m from Admin 1 prior to Gibb coming on board. According to the Prof at the time, there were several offers on the table to raise money from the ground. He and JR accepted Gibb's offer as the best one available.

 

Let's tick to the facts. The club raised £2.5mill from the sale of the ground to the pension fund. The original lease was £300k pa with inflationary increases at periodic points. The pension fund even let the club off the first year's lease to help with short term cash flow issues. Separately, the offices, shop and car parks were sold to a property company (the Pru) also for £2.5m again for an initial lease of approx £300k with periodic inflationary increases. In both case, the club took the best deals on the table available to them to raise the £5m due to one of the banks.

Why did we have to raise the money so quickly? For the simple reason that the commitment we gave to one of the banks in the first administration wasn't met and the bank was about to place the club in administration. The club was basically insolvent and without the money from the sale of the ground and the sale of the offices etc, we would have been liquidated. It wasn't the Rhodes' money which saved the club at that juncture, it was the Gibb Pension Fund and the Pru. Without the cash, the club wouldn't be here now.

Has the pension fund made a profit on the deal? Undoubtedly yes .. with the benefit of hindsight. Had the club been liquidated or defaulted on the lease (as ML once threatened), then it clearly would instead have lost a lot of money.