Watford make Russo plea

Cash-strapped club hope to avoid going into administration

Last updated: 17th December 2009   Subscribe to RSS Feed

Watford make Russo plea

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Watford have moved to avoid entering administration by asking former chairman Jimmy Russo to suspend his demand for repayment of a £4.88million loan.

Russo decided to ask for the loan he gave the club to be repaid after he, his brother Vince and business associate Robin Williams all resigned from the board earlier this week.

Russo had set a deadline of Thursday afternoon that his company Valley Grown Salads would be repaid the loan which would have seen the club fall into administration and a 10-point penalty from the Football League if they had failed to repay the money.

However, major shareholder Lord Michael Ashcroft has underwritten a £7.5million share issue, which the club say guarantees Russo his money in the future and would ensure the club stay afloat.

A club statement read: "The board of Watford Leisure have met this morning and considered indicative proposals to save the company from immediate administration.

"The board have resolved to support a proposal from Fordwat Limited of a £7.5million rights issue of a debt instrument, with either warrants or conversion rights, offered to all shareholders and underwritten in full by Fordwat Limited.

"This would, at the option of VGS, enable the VGS loan of £4.88 million to be repaid in full with the remaining balance available to contribute to the cash shortfall to June 2010 of £5.5 million.

"However for the board to proceed with this plan Valley Grown Salads would need to suspend its demand for the immediate repayment of the VGS Debt. The board is therefore in communication with representatives of Valley Grown Salads and a further announcement will be made in due course.

"In the event that no agreement can be reached with Valley Grown Salads then the company will have to be placed in administration. The company's shares remain suspended from trading on the Alternative Investment Market."

Plea

Hornets boss Malky Mackay has urged Russo not to be responsible for putting the club into administration.

"Jimmy Russo has asked for his loan back today and the fact Lord Ashcroft has come forward means that money can be paid back to stave off administration - which could otherwise happen in the next day or two," Mackay said.

"The offer has been made but the ball's in Jimmy's court as to whether he accepts the plan. He can either take the club into administration or accept his money back.

"It's a great club, the people that work here, the staff and the players, work tirelessly.

"It has a great fanbase and great community spirit. It would be dreadful if this club went into administration if it didn't need to - and it doesn't need to."