BY IAIN COLLIN – @CCP_sport
ANN Budge is set to extend her spell as owner of Hearts in a move designed to generate £3 million from supporters for the building of a new main stand at Tynecastle.
The initiative was detailed yesterday when it was revealed that £2.5 million of the costs of the project had been pledged from anonymous ‘benefactors’.
Hearts require around £12 million to redevelop the outdated centre piece of their stadium and are already half-way towards that sum, thanks to the substantial seven-figure donation, £3 million from club reserves and £500,000 from ‘commercial contributions’.
However, it is the planned method of bringing in another £3 million that will be of major interest to fans in a change to the agreement struck when the club was brought out of administration two years ago.
It is proposed that funds generated by members of the Foundation of Hearts (FoH) – amounting to £125,000 per month – should be diverted to the club over the next two years for use in building the main stand instead of repaying Budge’s BIDCO loan.
That would delay the supporters’ group takeover beyond the date of 2019 by which it was originally expected the £2.5 million loan would have been repaid.
FoH members will have to approve the initiative but, if it goes ahead, Budge has promised to waive £300,000 of interest payments that would have been due during the next two years.
She has also offered to transfer 20 per cent of BIDCO’s shareholding in the club to the FoH on receipt of the first £1.5 million and a further 15 per cent when the full £3 million has been raised.
In line with the original agreement struck to save Hearts two years ago, the balance of just over 40 per cent in the club will be transferred to FoH on full repayment of the BIDCO loan – now expected to be completed eight months later than anticipated.
“We need to continue to work together – the club, the Foundation of Hearts and the supporters – to deliver this project,” said Budge in a detailed statement.
“By doing nothing more than has been done over the last two years, the club can once again build up £3 million of reserves.
“While that will be a wonderful achievement, it would still leave a £3 million gap. So, what else are we planning to do?
“The major initiative revolves around the FoH/BIDCO agreement.
“According to that agreement, repayment to BIDCO should start on 1st June 2016. I have made an offer to the FoH board that they can defer repaying the BIDCO loan for a period of up to two years, and that all donations made during that period should continue to be paid to the club.
“This money would be allocated to the new main stand project. At current levels of contribution (£125,000 per month), this would generate £3 million.
“At the end of the two-year period, or when £3 million has been donated, if earlier, FoH contributions would then revert to repaying the BIDCO loan.
“Assuming contributions continued at today’s levels, majority ownership would pass to FoH only eight months later than originally envisaged.
“However, they would be taking over a club with everything in place to ensure financial stability and to position the club for continued growth. It is worth noting that should the number of pledgers increase over this period, the original five-year plan could still be achieved.
“I have every confidence that, by simply continuing to work together as we have been doing, we can fund a magnificent main stand and position the club for continued success – all while continuing to invest in our academy and our squad.”
Hearts hope to be be in a position to begin work on the new 7,000-seater stand in November and have it operational for the beginning of the 2017-18 season.
