Sharks up against tough opponents: St George
Bank
Jacquelin Magnay | May 7, 2009
CRONULLA Sutherland Leagues Club and the Sharks football club are paralysed by short-term debt of more than $11 million.
And the clubs' banker, St George Bank is so concerned about the cash the club is burning that there has been serious talks about the terms of ongoing credit, including restricting the football club to just $250,000 a year.
The clubs combined for an operating loss of $1.4m last year, and it is increasingly apparent they are struggling to trade their way out of debt, putting their future firmly at the whim of the bank.
Auditors have expressed grave doubts about the ongoing viability of both the football and leagues clubs.
Last year the leagues club, which made a small operating profit, put itself in the red by giving the football club a grant of $2,572,000, an increase of 70 per cent on the previous year.
The amount of cash in the bank decreased by $8m, leaving the club more than $2m in the red as at October 31. However it is understood that amount of money owed has increased substantially in the past few months as the football club has struggled with poor crowds at home games.
The Sharks more than doubled their debt in the past year, increasing the current liabilities of the football club to $8.99m and the leagues club to $6.43m.
That cash crisis has forced the Sharks to urgently seek guaranteed sources of income to satisfy the bankers that the football club and the leagues club can operate as a going concern.
The total assets of the club are valued at $36.58m. In the annual report sent to members, auditor Robert Peck of BDO Kendalls said the ability of the company to continue as a going concern was dependent on the support of the bank.
He said the club might be required to realise its assets and extinguish its liabilities at amounts different from those stated in the financial statements. In other words, a fire sale.
Jacquelin Magnay | May 7, 2009
CRONULLA Sutherland Leagues Club and the Sharks football club are paralysed by short-term debt of more than $11 million.
And the clubs' banker, St George Bank is so concerned about the cash the club is burning that there has been serious talks about the terms of ongoing credit, including restricting the football club to just $250,000 a year.
The clubs combined for an operating loss of $1.4m last year, and it is increasingly apparent they are struggling to trade their way out of debt, putting their future firmly at the whim of the bank.
Auditors have expressed grave doubts about the ongoing viability of both the football and leagues clubs.
Last year the leagues club, which made a small operating profit, put itself in the red by giving the football club a grant of $2,572,000, an increase of 70 per cent on the previous year.
The amount of cash in the bank decreased by $8m, leaving the club more than $2m in the red as at October 31. However it is understood that amount of money owed has increased substantially in the past few months as the football club has struggled with poor crowds at home games.
The Sharks more than doubled their debt in the past year, increasing the current liabilities of the football club to $8.99m and the leagues club to $6.43m.
That cash crisis has forced the Sharks to urgently seek guaranteed sources of income to satisfy the bankers that the football club and the leagues club can operate as a going concern.
The total assets of the club are valued at $36.58m. In the annual report sent to members, auditor Robert Peck of BDO Kendalls said the ability of the company to continue as a going concern was dependent on the support of the bank.
He said the club might be required to realise its assets and extinguish its liabilities at amounts different from those stated in the financial statements. In other words, a fire sale.
