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Serie A season preview: AS Roma

AS Roma 12 hours ago
Read
Dec 5, 2012

Coventry given debt deadline

Coventry City owners Sisu must find £1.1m in rent arrears on the Ricoh Arena within 21 days or face the prospect of the League One side going out of business.

Stadium company Arena Coventry Limited, jointly owned by the Higgs Charity and Coventry City Council, claim they have been left with little option to set the Boxing Day deadline after failing to receive rent for the last ten months.

A statutory demand for the arrears has been issued to Sisu, who have bankrolled the League One club for the last five years. Failure to pay will result in Sisu being forced to either declare themselves insolvent, or face a winding up order.

A statement issued by ACL confirmed: "Following the refusal of Coventry City Football Club and its owners, Sisu, to pay outstanding rent to Arena Coventry Limited (ACL), the ACL Board has today issued a statutory demand to Coventry City Football Club (CCFC).

"The statutory demand covers the £1.1 million owed by CCFC to ACL in rent arrears of a total £1.6 million owed by the club. This is not a course of action the ACL Board wanted to take. However, the behaviour of Sisu, the owners of CCFC, has left the Board with no choice but to issue the statutory demand.

"The statutory demand gives Sisu a further 21 days to pay the outstanding rent lawfully owed to ACL. CCFC has failed to comply with its legal obligations and the Board is taking this action now to protect the long term sustainability of its already healthy and successful business.

"The Board feels that all other avenues to resolve this issue have been exhausted and is astonished that the club's owners have allowed matters to come to this sorry pass. Responsibility for this situation lies completely with Sisu, a Mayfair hedge fund which has let CCFC fail under its direction.

"If they don't meet this deadline, Sisu must either declare CCFC insolvent or face a winding up order for the club."

Sisu have been trying to persuade ACL to reduce the £1.2m annual rent on the stadium, but have not made any payments since October 2011, despite losing a High Court battle with ACL over money owed in the summer.

Coventry reacted with dismay to ACL's move and admitted they will be forced to leave the Ricoh Arena, unless ACL are prepared to negotiate on a rent reduction and structured repayments of the outstanding debt.

A statement by the club said: "The club remains committed to the city and people of Coventry. However, its viability depends on it finding an alternative home ground where it can afford to play.

"We are disappointed by ACL's actions today to issue a statutory demand to Coventry City Football Club rather than, as we had requested, sitting down with us to negotiate a level of rent which the club can afford and which is in line with the rent paid by other clubs. "For reference, ACL has been charging CCFC an annual rent of £1.28 million, which we understand is the highest in both League One and the Championship.

"We understand that the average annual rent paid by League One clubs (excluding CCFC) is less than £170,000 and that the average in the Championship is less than £290,000. All other clubs which rent their stadia get full access to 100% of match day food, beverage and car parking revenues, unlike CCFC.

"The club's objective in requesting these negotiations with ACL has been only to bring about a state of commercial normality, where CCFC pays the same level of rent and has access to the same type of ancillary revenues as the other football clubs with which it competes. It is unsustainable for CCFC to be put at a severe financial disadvantage to its peers."

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