Talks between Town and their lenders regarding a write-down of the club's debts are reported to have broken down. Last month TWTD reported that write-down negotiations between the Blues and Morley Fund Management were ongoing.
Town's debts currently stand at £36 million with £28 million owed to Aviva, the owners of Norwich Union, for the bond which facilitated the building of the two new stands. Morley Fund Management, another Aviva company, is in charge of overseeing the Town debt.
The Blues owe another £8 million to Barclays, for the pre-administration overdraft, and the Bank of Scotland, for the mortgage which paid for the purchase of the Playford Road training ground.
Town have found the annual £2 million annual interest payments on the bond increasingly difficult to meet while trying to remain competitive in the Championship and last year a three-year interest holiday was agreed which will see Norwich Union eventually own 15% of Town.
A write-down of the debt - possibly by as much as £20 million - would make it easier for the Blues to find investors willing to inject more significant sums than has been the case in recent years, and would be a major step towards improving Town's ability to compete for promotion back to the Premiership.
A breakdown in the current talks would be a blow for the club but is unlikely to be the end of discussions with there being no possibility of Town repaying Norwich Union their capital while in the Championship and promotion to the Premiership looking a remote possibility at present.
Town's position on recent negotiations has been to comment that talks with Norwich Union, Barclays and the Bank of Scotland have been in progress for a number of years and will continue, something chief executive Derek Bowden has reiterated in response to today's report: "Conversations with our lenders are ongoing.”
A spokesperson for Morley said: "I am unable to comment on the details of this issue as any discussions that may occur between Morley and Ipswich at any time would always be conducted on a confidential basis.”