Panter: Bigger overdraft necessary to save City (From Worcester News)

Panter: Bigger overdraft necessary to save City

6:30pm Wednesday 11th February 2009 in

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WORCESTER City are negotiating an overdraft extension in a bid to pull through their current financial crisis.

The St George’s Lane club have taken the step after insisting they would go out of business without it.

City, who avoided going into administration in December, are trying to strike a deal with the Royal Bank of Scotland, Carey’s New Homes and St Modwen — the major players in the club’s stadium relocation project.

It would see the overdraft limit extended from £60,000 to around £130,000 as the Blue Square South club try to balance the books.

“We are negotiating with the bank, Careys and St Modwen for a loan that will allow our overdraft to come to about £130,000.”

Jim Panter

Vice-chairman Jim Panter told a fans’ forum that the club is beginning to make progress on a day-to-day basis but still owe creditors around £50,000.

He said: “Traditionally, we have lost £10,000 a month, that’s £2,500 a week.

“We have been accumulating that loss for a number of years now and that’s one of the reasons why we’re indebted to the bank because that loss has been tallied up.

“We are negotiating with the bank, Careys and St Modwen for a loan that will allow our overdraft to come to about £130,000.

“As we start to make a profit and get season-ticket sales coming in for next season, then we start to improve our cashflow position. If everybody asked for their money back that we owe, we would be bankrupt, out of business and in administration. That’s clearly an undesirable state of affairs.”

City failed to get their overdraft facility extended by troubled RBS following crunch talks with chairman Anthony Hampson in December.

However, they were granted breathing space for measures put in place by the new board of directors to take effect and have managed to make strides with this latest deal.

Hampson added: “I feel it’s an achievement to have got so far into the season given the financial situation we started with.”