Rugby side Scarlets' council loan repayment deferred
- 18 October 2010
- From the section South West Wales
Carmarthenshire council has agreed the Scarlets regional rugby side can defer interest it owes on a £2.4m loan for three years.
The money was made available to the club to help its move to the new Parc y Scarlets stadium two years ago.
The council said it would not cost it anything in the long-term as the interest would be rolled-on.
The executive board also backed changes that would see the club's funding directors swap debt for new shares.
The Scarlets lease the new ground from the county council which in return has to agree to any changes in its financial structure.
At the club's recent AGM the funding directors agreed to swap almost £5m they were owed for new shares.
Council executive board member Wynn Evans said: "It is very much in the council's interest to grant consent for the proposals by the directors to go ahead.
"This will see the club's overall debt decrease by £5m.
"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."
Mr Evans said the executive board also agreed to defer part of the interest on the council loan which would be rolled up and become payable when the loan ends in 2023.
He said it would have the effect of increasing the sum due to be paid by the club to the council from £2.4m to £2.6m.
The council had originally offered to loan the Scarlets £2.6m but they only borrowed £2.4m.
"It is important to stress that this will not be at a loss to the council taxpayer - the interest is merely deferred and will become payable upon repayment of the loan," he added.