Canaries consider selling off Carrow Road
Norwich City could sell their iconic Carrow Road ground to clear their debts, it was revealed last night.The shock proposition is among options being looked at by the board as it tries to either reduce or clear its record �23m debt.
Norwich City could sell their iconic Carrow Road ground to clear their debts, it was revealed last night.
The shock proposition is among options being looked at by the board as it tries to either reduce or clear its record �23m debt.
At a press conference that confirmed the EDP's exclusive revelations about the debt and record annual loss of �5m in 2008/9, chairman Alan Bowkett said selling Carrow Road lock, stock and barrel was 'an option'.
He said: 'It may be sensible to sell the ground, pay a low rent and pay off all the debts. I'm not saying I'm promoting it, but it's one of the options.
'If it came to owning Carrow Road and not having a football club or having a team and paying rent there's no choice.'
He said a likely buyer could be Axa, the insurance firm that handed the Canaries a �15m securitisation loan in 2002 to pay for the �7m Jarrold Stand and reschedule the debts.
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City currently owe Axa �11.5m of that cash, which is being paid back annually. The club's accounts put the value of Carrow Road at �34.5m, raising the prospect that selling to Axa would clear all of the debts and give the board millions of pounds to spend.
However, City would be left as tenants at the ground they have owned since it was built, and would face annual rent charges of at least �1m.
Mr Bowkett said: 'We would have to pay a yield of, say, 3.5-4pc in rent. That would be perhaps �1m a year in rent every year. But we currently pay more in that each year to Axa in repayments and interest.'
The chairman, who took over from Roger Munby following his resignation in the summer, said City's board had secured the 'continued support' of Axa and the other major lender Lloyds Banking Group 'until at least the end of the current season'.
But he could not be certain of continued support in 2010/11, despite negotiations being 'ongoing'.
And he said the club faced a �2.9m hole in its finances that season unless extra money could be raised or Axa and Lloyds agreed to defer interest or capital payments.
He said a number of options were being looked at to plug the gap, including:
t New ownership, which he said was 'very unlikely in the current financial climate'
t New money coming in from investors
t Issuing bonds, which could put the debt repayments on a longer-term repayment schedule and provide lower interest rates than the current 7.5pc being paid for the securitisation loan
t Making City a co-operative, owned by the fans - like Barcelona in Spain - or by a combination of the fans, local councils and local businesses
t Selling Carrow Road and leasing it back.
Mr Bowkett said: 'The figures make grim reading, but we have taken the club by the scruff of the neck. Thankfully our lenders have been extremely supportive.'
He said accountants Deloittes had been appointed by the club to advise on attracting investment, while international property consultants King Sturge were on board to advise on 'property matters'.
Club chairman David McNally, who sat alongside Mr Bowkett at the Carrow Road press conference, said: 'The action that we have taken gives us breathing space to properly evaluate each opportunity. When we joined the club we didn't have much time to sort things out.'
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