WFC Watford Leisure

 

TIDMWFC 
 
RNS Number : 6451E 
Watford Leisure PLC 
23 December 2009 
 

Watford Leisure PLC 
("Watford Leisure" or the "Company") 
 
 
Related Party Loan and Update on Financial Position 
 
 
Watford Leisure announces that on 21 December 2009 Fordwat Limited ("Fordwat") 
paid approximately GBP4.93 million to Valley Grown Salads ("VGS") in full and 
final settlement of VGS' demand of 15 December 2009 for full repayment of 
approximately GBP4.88 million in loans previously made available to the Company. 
The sum of GBP4.93 million paid by Fordwat included accrued interest and a 
contribution to the legal fees of VGS (in accordance with its right to demand 
such a contribution and interest under the loan agreement between VGS and the 
Company). 
 
 
In connection with the above payment, on 21 December 2009 Watford Leisure signed 
an agreement with Fordwat for a loan to the Company of approximately GBP4.93 
million (the "Fordwat Loan"), repayable on demand and accruing interest at the 
rate of 4.5 per cent above the base rate of Barclays Bank plc (except in default 
when the rate rises to base rate plus 7.5%). Furthermore, it is the 
understanding of both Watford Leisure and Fordwat that security over the 
Vicarage Road Stadium for the Fordwat Loan, replacing that of VGS, will be put 
in place in due course. The purpose of the Fordwat Loan was to prevent the 
Company being placed in administration by VGS. 
 
 
As Fordwat holds approximately 37.16 per cent. of the issued share capital in 
Watford Leisure it is considered to be a "Related Party" under the AIM Rules for 
Companies.  Accordingly the directors of the Company consider, having consulted 
with Strand Hanson Limited, that the terms of the Fordwat Loan are fair and 
reasonable insofar as the Company's shareholders are concerned. 
 
 
The board of Watford Leisure ("Board") estimates that the Company now requires 
GBP4.7 million to cover its projected cash flow requirements for the period to 
30 June 2010. As previously announced the Board supports a proposal from Fordwat 
to underwrite a GBP7.5 million rights issue of a debt instrument with either 
warrants or conversion rights, offered to all shareholders ("Rights Issue"). 
This proposal will take time to refine and put in place. As such the Board has 
determined to utilise all available funds currently held by the Company to cover 
the Company's working capital requirements until the end of January 2010. This 
includes the funds received from ticket sales from the "Playing for Players" 
concert to be held in June 2010 but with the expectation that these funds will 
be restored on completion of the Rights Issue.  At the end of January further 
short term funding will be needed to cover working capital requirements until 
the Rights Issue can be finalised. 
 
 
Trading in Watford Leisure's shares resumes on AIM with immediate effect. 
Further announcements will be made in due course. 
 
 
Enquiries: 
Watford Leisure PLC 
Tel: 01923 496 000 
Graham Taylor, Interim Chairman 
Julian Winter, Chief Executive Officer 
 
 
Strand Hanson Limited 
Tel: 020 7409 3494 
Rory Murphy 
 
 
Square1 Consulting Ltd 
Tel: 0207 929 5599 
Paul McGoohan 
David Bick 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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