Council to loan Plymouth Argyle £800,000 to pay debts
Plymouth City Council is offering Plymouth Argyle a commercial loan of £800,000 to finance part of the cost of settling certain ‘football creditor’ obligations early.
These obligations were assumed by the new company as part of the acquisition of the Club from administrators.
More than £1.6m of the debt has already been repaid by the Club with financial assistance provided by its shareholders. The Council has now agreed to support the club by offering it a five-year loan that will earn it an annual interest of 4.8 per cent.
The loan is the next stage in an ongoing partnership with the Club. The Council is committed to supporting Plymouth Argyle due to the importance to the local economy of having a nationally recognised football club in the city and its value to the local community.
Councillor Mark Lowry, Cabinet Member for Finance, said: “The club is hugely important to Plymouth for a number of reasons – it provides jobs, benefits local businesses, it raises the national profile of the city, provides sporting opportunities for young people and of course, it is much loved by the local community.
“The Council’s £800,000 loan is a pragmatic and proactive response to the remaining part of a problem that was inherited by the owners of the club from administration. It means the club’s future is more secure and that, along with the substantial investment already provided by the shareholders, it can put the administration process behind it.
“By offering a loan on commercial terms and with security provided by entities associated with the shareholders, it is win-win for Plymouth. Not only does it help secure the future of the club, which is important for the city, it is providing a good rate of interest to the Council and therefore value for taxpayers.
“While the Council is not usually in the business of offering loans, especially at time when we have to reduce spending due to Government cuts, the interest we earn makes it a good use of our revenue balances.”
