Leicester City petitions for administration
Troubled first division football club Leicester City was this morning placed in administration.
Link: Football’s debts mount
Last week the club made a series of attempts to stave off the procedure -including meeting with the the Professional Footballers Association to negotiate a reduction in players’ wages.
But it was forced to admit defeat today and petitioned the High Court for Leicester City Plc and its wholly-owned subsidiaries Leicester City Football Club Plc and Leicester City Developments Limited to be placed in administration. Trading in the club’s shares had already been suspended on 10 October.
In a statement to the London Stock Exchange at 08:00 today the club said: ‘Unfortunately, immediate creditor pressure and the inability to reach agreement with all major creditors have meant that a restructuring outside administration has not been possible despite the best efforts of the directors.
‘The directors believe that administration should give the club sufficient protection to enable the restructuring which they have endeavoured to conclude over the last three months to be completed. The directors of the group would like to record their appreciation of the support of all parties to the restructuring process.
‘In particular directors would like to acknowledge the Professional Footballers Association and players of the club for their good faith negotiations, which enabled an in principal agreement of a wage deferment. The directors also acknowledge the efforts of the football management team and the players for the success achieved so far this season and the ongoing commitment of the club’s supporters.’
Within half an hour of the club’s announcement, Birse Group, which has recently finalised the construction of a new stadium for the club, issued a stock exchange statement of its own saying that it expects to incur a bad debt in the region of £5.5m as a result of Leicester’s move. That sum will now be reported as an exceptional operating charge in its interim results to 31 October 2002.
Birse Group Group Managing Director Martin Budden said: ‘This decision by Leicester City plc is regrettable, however, Birse is in a stronger position than in previous years, due to the actions undertaken by management and we continue to make progress with our underlying businesses.’