Scarlets defer payment on council loan
Scarlets have been allowed to defer interest on their £2.4m loan to Carmarthenshire council for the next three years.
The money was made available by the council during the Scarlets' move to their new stadium, the Parc y Scarlets.
Wynn Evans of the council’s executive board said, “It is very much in the council's interest to grant consent for the proposals by the directors to go ahead.”
"It is important to stress that this will not be a loss to the council taxpayer. The interest is merely deferred and will become payable upon repayment of the loan,” he added.
Currently, the Scarlets lease the ground from the Carmarthenshire council who have a say in any changes to the financial structure of the Scarlets.
The council approved a motion for the club’s directors to swap the debt for new shares. This occurred at an AGM and Evans believes that this was a good move by the Scarlets and the council.
"This will see the club's overall debt decrease by £5m,” said Evans.
The Carmarthenshire council executive added, “This will significantly strengthen the club financially and allow the directors to continue to work to make the club self-financing over the next three years."
The Scarlets will have to pay £2.6m instead of the £2.4m they borrowed from the club as a result of the council deferring the interest on the loan.
On the field the Scarlets have had a successful season so far. The side is in fourth position in the Magners League. Despite last weekend’s drubbing by Leicester in the Heineken Cup, the team will still feel that they can get out of their pool.
However, attendances at the new stadium have been poor so far this season and the club will hope that by reducing their debt and becoming more successful on the pitch they can make the club more profitable.
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