Saracens’ £22.9million stadium redevelopment loan has been frozen by Barnet Council in the wake of the club’s automatic relegation from the Gallagher Premiership last month following the salary cap scandal.
The bbc.com website is reporting that the council initially considered terminating the loan that is funding a new West Stand at Allianz Park.
However, they instead opted to stop further access to the loan by Saracens Copthall LLP (SCLLP), the stadium owners, who have apparently already accessed £3.2m of the allocation. They must now provide the council with what is described as a ‘robust revised business plan’.
The BBC managed to access council papers which reported: “The agreement allows the council to terminate the loan if ‘any event occurs (or circumstances exist) which, in the opinion of the lender, has or is likely to have a material adverse effect’.
“However, terminating the loan before the club have had a chance to take stock of the current position could put the council in conflict with the club, which is likely to make it harder to recover the £3.2m already drawn down.
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“Putting the council in conflict with the club may also jeopardise any community benefits brought by the development of the West Stand.”
Adding that the freeze on further drawdowns was signalled before Premiership Rugby confirmed the club’s relegation on January 18, the report continued: “No further drawdowns will be approved until a way forward has been agreed between the council, SCLLP and the club. Interest will continue to accrue on the £3.2m already drawn down.
Saracens: Barnet Council considered ending £22.9m stadium redevelopment loan https://t.co/jkZHEkkTKS
— Laura Scott (@LauraScott__) February 17, 2020
“Should SCLLP wish to pursue the development of the West Stand, the council will require a robust revised business plan, subject to independent due diligence, before any further loan drawdowns are made.”
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