25-year wait to recover Salford City Reds loan

SALFORD City Council will have to wait 25 years to recover a £1.5m loan it made to Salford City Reds.

But under the terms of a debt deal the council has retained the right to recover money from former directors and will hold some development rights over the club’s former Willows ground.

Nonetheless, the council’s opposition leader Karen Garrido said she was “appalled” and would try and reverse the decision.

Racehorse owner Marwan Koukash took on the club in January and agreed to pay creditors, owed a total of £4.5m, in full.

But this has been done through a company voluntary arrangement (CVA) of the club’s old corporate entity, Salford Football Club Company 1914, which has stretched repayments out over a number of years.

Trade creditors, owed £1m, will be repaid over five years and the council will receive 16%, or £240,000, over this period. But it will not get all of the balance until 2038 under the terms of a separate deal hammered out between Mr Koukash and the council.

A council spokesperson said: “Salford City Council has secured a 25-year loan deal with the new Reds owner to repay the debt in full. The deal also means that the council retains its right to recover funds from the former board of directors, which includes some development rights on the former Willows ground site.

“With the new owner in place and the future of the club secured, there is no longer any risk that the council will not receive its money back. Under the new ownership of Dr Koukash, the fans, the city and the council can now look forward to a much brighter future for Salford City Reds.”

Bolton-based Ideal Corporate Solutions, which handled the CVA, said Mr Koukash used this process because it allowed him to deal with inherited debts without compromising investment in the club.

In a statement Conservative leader Karen Garrido said: “A child born today will be 25 years old before this debt is cleared, they will have gone through education, either finished university or have been working for for over seven years and could have even had their first child.

“I am absolutely appalled that the people of Salford, are being made to suffer because of the actions of this city Mayor who has deliberately cut a number of front line services for the most vulnerable in our community, just think how much they could have benefited by this £1.5m.

“The first thing this mayor did on being elected in May 2012 was to give this private rugby club an extra £500,000 on top of the £1m already given by the Labour council. I can confirm that we will be asking questions at full council on Wednesday and investigating what means are open to us to try and reverse this decision.”

The club is now owned by a company called Salford City Reds (2013) which in turn is owned by MKAC Investment Partners whose sole shareholder is Mr Koukash.

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