8:24pm Thursday 17th December 2009
By Frank Smith
Watford legend Graham Taylor has hit out at Jimmy Russo after the Hornets former chairman confirmed he plans to appoint an administrator for the club after rejecting Lord Michael Ashcroft’s proposal for a rights issue.
Today Lord Ashcroft, deputy chairman of the Conservative party and major shareholder at Watford, offered to underwrite a £7.5m rights issue as the club attempted to avoid administration.
Russo, his brother Vince and business associate Robin Williams all resigned from the board on Tuesday night ahead of the Hornets’ parent company Watford Leisure Plc’s AGM after it became aware Lord Ashcroft and former Watford chairman Graham Simpson were going to vote the trio off the board.
Russo immediately demanded the £4.88m his company Valley Grown Salads had loaned Watford and the club were given a deadline of 1pm today to pay the money or the administrators would be called in.
This resulted in Lord Ashcroft offering to underwrite a £7.5m rights issue but this could only happen if the Russos agreed to suspend their demands for the £4.88m they were owed.
Russo has subsequently released a statement confirming VGS had rejected the proposals.
Taylor, who was named as interim chairman today, said: "This is the man [Jimmy] who has talked about his love of Watford yet he is prepared to put the club at risk.
"Why? We can't seem to get an answer. We have a situation that can stop the club going into administration. They're putting the club at risk and I can only assume that he plans to step in somewhere down the line to rectify it."
The Russos’ decision to reject the proposals seems understandable, however, as although they will receive the £4.88m they are owed, unless they buy more shares in the rights issue, the value of their current shares is sure to decrease and they could lose millions of pounds.
In a statement released this evening, Russo said: "The rights issue proposal, while it might superficially be attractive, does not bear close examination. It gives Fordwat the opportunity to consolidate its control of the company without making an offer to other shareholders.
"In the circumstances, VGS has rejected the proposal, has announced its intention to appoint an administrator of the club and will now be serving a formal demand on Watford Leisure PLC under the terms of its guarantee for repayment of the debt owed by the club to VGS.
"VGS has been left with no alternative than to take these steps. It does so with the greatest reluctance and only after significant and repeated efforts on its part to salvage the club have been rebuffed by the board and by Fordwat."
© Copyright 2001-2012 Newsquest Media Group
http://www.watfordobserver.co.uk/trade_directory/