Budge pledges Â£300k to new stand and defers Hearts repayment
Hearts owner Ann Budge today pledged to pay Â£300,000 of her own money towards the new main stand at Tynecastle. The Edinburgh businesswoman has also offered to defer repayment of her Â£2.5million loan to allow fans group Foundation of Hearts to contribute more cash to the project.
Estimates are that the new stand will cost around £11million, with unnamed benefactors contributing £2.5m. Budge has unveiled a detailed payment plan, including a debenture scheme, and will also use funds already in the club’s account.
Work on the 7000-seat main stand is due to begin this autumn, bringing Tynecastle’s total capacity up to more than 20,000. The stand could open early in the 2017/18 season. It will include a home for a new Tynecastle Nursery, alongside space for a club shop, ticket office and admin office. There will also be an improved “spectator experience”, with “unobstructed views” of the pitch, modern seating, food kiosks and lounges.
As part of a statement on the club website, Budge explained how the project is to work.
“I am sure you all want to understand how we are planning to fund this major project,” she said. “Our estimates of cost are circa £11m. Allowing for some contingency (10%), we are working to a budget of £12m.
“Our funding plan is, in summary, as follows: Financial Reserves from the club: £3m; Benefactor Contributions £2.5m; Commercial Contributions: £0.5m; Total available today: £6m
“Clearly, this leaves a potential funding gap of up to £6 million. However, I would ask you all to remember this. Over the last two years, with the support of the fans and with sound financial management, we have built up a financial reserve of £3 million. There is nothing to stop us doing the same again, over the next two years, with your continued support.
“What does this mean? Unashamedly, I am asking you to keep doing what you have been doing.
“We need season ticket holders to sign up again in their numbers.
“We need corporate members and sponsors to continue to back the club across the season.
“We need FOH pledgers to keep pledging.
“We need to continue to sell-out the stadium…and our hospitality suites…on match days.
“We need to make our new in-house retail operation a big success, by offering our supporters goods they want to buy.
“In short, we need to continue to work together…the Club…the Foundation of Hearts…and the supporters…to deliver this project. 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?
“We will shortly be announcing details of a debenture scheme – which we are confident will be a great success. We have also been asked by many fans to consider a number of other ideas in relation to the new stand development. More information will be provided on these schemes over the next few months.
“The other 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.
“What would this mean to FOH pledgers?
“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.
“To demonstrate that fans’ ownership still has my full support, I have also offered to transfer 20% shareholding to FOH when £1.5 million has been donated; and a further 15% on reaching the £3 million target. This is by way of a “thank you” and a demonstration of my faith in the FOH pledgers. The balance of 40.1% shareholding would be transferred on full repayment of the BIDCO loan, as per the original FOH/BIDCO agreement.
“Finally, I have also offered to waive all interest payments due to BIDCO, during the period of up to two years when this deferral is in operation. This would effectively be my personal contribution of £300,000 to the main stand fund.”