Coventry City owner will drop legal action against Wasps if commercially acceptable deal agreed – ITV News

Coventry City owner will drop legal action against Wasps if \commercially acceptable\ deal agreed - ITV News

Coventry owners SISU believe deal can be reached to save club

Coventry Citys owners have publicly promised an end to their legal action against the local council over the sale of the Ricoh Arena if they get support to build a new home in the city.

Sisu Capital Ltd will drop the long-running case if they can move – but are also seeking a medium-term deal with Wasps to remain at the Ricoh for now.

In May 2014, SISU welcomed the efforts of Reverend Witcombe in bringing all parties together and SISU willingly participated in the subsequent dinner in July 2014 and mediation process which resulted in the Club returning to the Ricoh Arena on 5 September 2014. As in all mediation processes, SISU approached the mediation in good faith and came out of the process cautiously optimistic for the future and the return to the Ricoh. Indeed, public and private comments at the time from senior Council officials pointed to there needing to be a period of time to rebuild trust before longer term ownership discussions (of the Ricoh Arena) could take place.

If it is not resolved by then, EFL clubs will be notified about a meeting, which would take place on 25 April, at which Coventry could face expulsion from the league.

In August 2014, the Club entered into a tenancy agreement with ACL at the Ricoh Arena (the terms of which are confidential). It was an initial 2 year deal (14/15 and 15/16 season), extendable for a further 2 years at ACLs option only. However, in December 2015, when the Club confirmed it wished to extend the deal for the following two seasons, Wasps refused to grant this option. Eventually, Wasps would only allow the Club to stay if it traded all its access to the Academy match pitch at the Higgs Centre (apparently as part of the developments of Wasps new £7m training ground) in exchange for continuing its tenancy.

The legal case hinges on their claim that Coventry City Council undervalued the Ricoh by £28m when the ground was sold to Wasps in 2014.

Sisu say they “typically do not make press comments” but that they are “breaking with that tradition, because we think it essential that we explain to the fans the status of Coventry City Football Club.”

In an open letter, emailed to both local and national media, the first time they have spoken on this matter since 2016, the London-based investment manager asked for:

They returned in 2014 after just over a year ground-sharing 33 miles away with Northampton Town, but have been told by the EFL that they must play their home games within six miles of the city centre.

Sisu say they are inconvenienced by the EFL stipulation over the geographical location of any new stadium – and have also outlined other potential obstacles arising from the “current acrimonious relationship” with the council.

Following correspondence from the Higgs Charity, SISU made an offer to buy the Clubs option over the Higgs shares in ACL at the higher of: either £2.8m or market value (i.e. an existing offer) plus an additional amount. Despite media comments to the contrary, there were no conditions attached to SISU’s offer other than requesting basic documentation to understand what SISU was purchasing. SISU provided proof of funds, and the Club set out how it would look to continue to work with the Higgs Charity in the future on community projects1.

However, in a background document to go with their open letter, they say they have “invested considerable time and money in exploring the construction of a new stadium” and that “real estate advisors have been and continue to be engaged to source land for such a development”.

Sisu add that they are “still hopeful” that the council will work with them to progress the development of a new ground.

Between early 2012 and August 2012, ACL continued to receive full rent, dropping to an agreed reduced amount from August onwards. In total, from late March 2012 to March 2013, ACL received over £850,000 in rental payments, which whilst not the full total of the £1.3m rent, was significantly higher than any other League 1 and Championship football club rents. Without match-day income (which all went to ACL), it was all the Club could afford to pay.

Joy Seppala, the head of SISU, owners of Coventry City, has broken her silence over the row which threatens to see the club expelled from the English Football League (EFL) in six weeks time.

In 2014, the Council decided to sell the Ricoh to Wasps. Not only was this a slap in the face to the Club but the effect of the deal was that Wasps gained control over a very long lease at a significant (some £28 million) undervalue. The Club has never been offered the true ability to buy a stake in ACL, nor anything close to the deal Wasps concluded. This has been devastating to the long-term interests of the Club and its fans.

Speaking exclusively to Sky Sports News, the hedge fund chief revealed she believed their disputes with Wasps and Coventry City Council can be resolved – and that every battle they have fought in 11 years of ownership was “to make the club the very best it can be”.

However, SISU had no idea the Council had decided unilaterally to pursue its own transaction with the Yorkshire Bank and cut SISU out. SISU continued to push the transaction in good faith as it was in the best interests of the Club. A PR campaign, orchestrated by Weber Shandwick, targeted against SISU ultimately frustrated the deal and allowed the Council to enter into its own deal with the Yorkshire Bank.

Seppala was speaking ahead of a crucial meeting in Westminster later this week called by the Culture Secretary, Jeremy Wright MP, to help find a solution to the stalemate which continues to threaten the clubs existence.

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