Watford Announces New Fundraising Plan - 24/12/03

Watford felt the fallout from the ITV Digital crisis in May 2002 when Sir Elton John resigned as chairman and non-executive director from Watford Leisure following pressure from fans to dip into his personal fortune to help the club. He owns 8.4 per cent of Watford. Directors loans in June 2002 came to £600,000. When it floated on Aim, the holding company, Watford Leisure, raised £3.1m via a placing with existing shareholders and hoped to raise a further £2.1m via a public offer. The largest shareholder with 49 per cent is Penguin Overseas Associates, an offshore trust whose beneficiaries include the family of Haig Oundjian, a former British Olympic ice skater. The club posted a record £5.48m interim loss in March 2003. The club's turnover fell from £8.6m to £3.94m in a year that saw the collapse of the ITV digital deal and the end of its entitlement of parachute payments following its relegation from the Premiership in 2000. The club was forced to impose a 12 per cent pay cut on its players in September 2002 and has also had to budget for a £1.5m compensation claim brought by Gianluca Vialli.

At the end of 2003 the club announced plans for a £5.25m fundraising aimed at securing working capital and to assist buying back the freehold of the Vicarage Road ground and developing the stadium. The scheme consists of a £4.5m placing with Graham Simpson, the chairman who replaced Sir Elton John, and a new unidentified investor. A further underwritten offer of £750,000 is to be made to existing shareholders.