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Video: Debt-ridden Owls seek lifeline from bank today
SHEFFIELD Wednesday's immediate future was in the balance last night with the club awaiting the outcome of critical talks with its bank ahead of a High Court hearing tomorrow over a winding-up petition.
Wednesday's chief executive Nick Parker held talks with the Co-operative Bank yesterday with the Owls seeking an urgent injection of money to pay off what is understood to be in the region of 300,000 in unpaid tax.
The club expects to receive a response from the bank today but it is understood the Co-operative, which is already owed in excess of 20m, has been less than eager to extend more credit to the debt-ridden Owls.
Although the club managed to obtain an adjournment at an initial hearing on a winding up petition from HM Revenue and Customs (HMRC) last month, the amount of unpaid tax has again stacked up and placed the League One club in a precarious position.
Wednesday said it owed 550,000 ahead of the first hearing – 250,000 of which was VAT. The club has agreed a repayment schedule for the VAT and paid off 300,000 in PAYE last month through the sale of goalkeeper Lee Grant to Burnley.
But the club does not have enough revenue to meet its outgoings and has quickly found itself owing a further 300,000 in PAYE – roughly equivalent to one month's liability.
Wednesday would not comment last night but, although withdrawal of bank support would mean almost certain administration, insiders believe the Co-operative will ultimately provide enough money to secure a further adjournment.
Without fresh investment from a takeover, however, the Owls face the prospect of going through the doors of the High Court on regular basis and relying on the bank to continue to extend debt to pay recurring unpaid tax bills. Although talks are continuing with interested parties, no acceptable offer has yet been received.
A Co-operative Bank spokesman said: "Dialogue is continuing between ourselves and Sheffield Wednesday and in the last week or so this has been on a regular basis."
He added that the bank wanted to help the club but could not confirm it would guarantee the required payments.
Although the club has a strong squad for League One, persistent problems with unpaid tax may mean further transfer embargoes being imposed under Football League rules. Wednesday have already been subjected to two separate embargoes over the summer.
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Saturday 26 May 2012
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