Cardiff City FC clears long-standing Langston debt

Mr Tan has previously said an agreement with Langston would pave the way to the club becoming debt-free

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Cardiff City FC has reached a deal over its long-standing debt with Langston, club owner Vincent Tan has said.

The debt to Langston - whose spokesman is former Cardiff City owner Sam Hammam - was taken out in 2004, and is thought to be about £24m.

Mr Tan has previously said an agreement with Langston would pave the way to the club becoming debt-free.

Cardiff City Supporters Trust said not all fans would be happy Mr Hammam was made honorary president in the deal.

Last week, Vincent Tan said the club was "days away" from reaching a deal.

Analysis

The debt to the Swiss-based company Langston, linked to the former chairman Sam Hammam, has been hanging over Cardiff City for many years.

At one stage it was even argued over at the High Court in London.

We don't know what the final settlement is but the latest company accounts show the debt was worth £15m, which became £19m after interest charges of 7%.

There's also a one-off payment of £5m payable if the club secured promotion to the Premier League.

The other intriguing part of the debt is that the future naming rights of the Cardiff City stadium were wrapped up in it as well so an agreement could pave the way for a new name for the ground.

But settling this legacy debt was always going to have a bigger impact than just the matter of £24m because Cardiff City's overall debts are far greater than that, and most of them are owed to Vincent Tan himself, who has bankrolled the club in recent years.

Last week the Malaysian tycoon said he would wipe out all of those debts by converting them to shares if he settled the Langston loan.

Currently Vincent Tan has fewer than half of the shares in the club; if he converts massive debt into new shares that are issued to him then he will be left owning the vast majority of the shares in the club.

It means the club will become debt free as it enters the Premier League and avoid having to pay millions of pounds in interest payments every year.

In a statement on the club's website on Monday, he said he was "grateful and indebted to Sam Hammam" and others and said the agreement "brings to a close a lengthy period of uncertainty".

He added: "This settlement allows us to look to a new era of financial stability, which should be celebrated by all connected to Cardiff City.

"I am delighted, primarily for the supporters of this great club that we can put this matter firmly behind us and plan for our future with confidence."

In the same statement, Sam Hammam, said: "This resolution will rightly be regarded as a proud and historic occasion for all associated with Cardiff City Football Club.

"Now that an amicable agreement has been reached, thanks in most part to the vision of Tan Sri Vincent Tan the club can now focus on the exciting Premier League season ahead, while building for the future with optimism."

Mr Tan's investment in Cardiff so far stands at about £120m.

He is studying the possibility of floating part of the club on the Malaysian stock exchange.

Tim Hartley, chairman of the Cardiff City Supporters Trust, said most fans welcomed the deal but not everyone would be happy about Mr Hammam's return to the club as honorary life president.

Mr Hartley told BBC Radio Wales more transparency was needed about the arrangement to explain to fans what exactly has been agreed to show, for example, what portion of debt has been converted to equity.

"What we are moving towards is a debt-free club which will be financially sound which, ultimately, will be attractive to investors," said Mr Hartley.

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