3:52pm Monday 21st December 2009
By Frank Smith
Watford are very close to finding a successful resolution in their bid to pay off the £4.88m owed to Valley Grown Salads and solving their short-term cash flow problems, the Watford Observer understands.
The threat of administration has been looming over the club since former chairman Jimmy Russo resigned from last Tuesday’s AGM and called in the £4.88m owed to his company VGS.
The Hornets’ parent company Watford Leisure Plc also released a statement at the end of November confirming that a £1m loan from Russo would only cover its liabilities until tomorrow, December 22.
But the Watford Observer understands discussions between the club’s board and Lord Ashcroft’s company Fordwat have been ongoing today and the parties are finalising an agreement which will pay off the £4.88m VGS loan and provide the money needed by tomorrow.
It is also understood that the £5.5m hole in the club’s books, which needs to be filled by June 2010, will be filled by having a rights issue.
Lord Ashcroft looks set to underwrite the rights issue, as he offered to do last week but was rejected by Russo and VGS.
It is unclear, however, whether a statement will be made by either Watford or their parent company today.
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