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THE DEBT OF DEPORTIVO

14 Nov 2012
90% of Deportivo’s debt is owned by the Spanish Treasury and Nova Caixa Galicia; both entities are crucial in order to solve the financial crisis that’s striking the club. Lendoiro must negotiate with both entities in the coming three months.

Last December, Deportivo La Coruña reported a global debt of €99,698,571.33 as part of the financial report presented to the shareholders. It turns out that almost the 45% of the debt is owed to the Spanish Treasury while other big part is owed to the bank Nova Caixa Galicia (NCG). Combined both entities represent the 90% of the debt. The negotiation with them will be crucial in order to solve the current crisis striking the club.

Last week the Treasury announced the embargo to almost all the incomes of the club as Deportivo couldn’t make several of the payments already agreed in a previous negotiation. The situation with NCG was more stable as the club was making the payments. But the embargo will make impossible to fulfill the obligations with the bank.

Now president Lendoiro has three months to negotiate with all the creditors and reach a new agreement about the deadlines of the payments. Then the club has to present the agreement to a judge, if he fails then Deportivo will go to administration, which means that several of the creditors will lose money. Another Galician bank, Caixanova, already lost €8 million when RC Celta went into administration on the past decade.

Therefore Deportivo hope that NCG will support the club as the new agreement will avoid losses to the bank. It’s pretty clear that the biggest obstacle in the attempt to avoid the administration is the Treasury, entity that’s more pressured in recent months due to the criticism from the public opinion accusing the whole government of been “too soft” with the football clubs. President Mariano Rajoy is also under pressure an ordered a policy of “zero tolerance”

In this sense in past weeks Deportivo already failed to reach a new agreement with the Treasury, this after three meetings, that’s why the president and his board of directors decided to move towards the administration putting the club in the phase known as “pre-concurso.” The club hopes that this movement could unblock the negotiations with the Treasury.

Deportivo is asking to renegotiate the deadlines of the debt and fulfill the payments in the next ten years; in recent years the Treasury has accepted longer deadlines, such as the case of Real Sociedad, club that in 2010 was favored as the Treasury accepted to extend the payment of a debt calculated in €40 million during 30 years.

Last week, one of the lawyers of the club, German Rodriguez Conchado, talked to Radio Cadena SER and complained that the office of the Spanish Treasury in Galicia is influenced by political reasons and that’s trying to block any new negotiation with Deportivo. Conchado even requested for the resignation of the delegate of the Treasury in A Coruña, José Luis Rodriguez. This incident just indicates the current tension in the relationship between the club and the government body.

The lawyer also repeated the speech of Lendoiro during last week’s press conference, ”We want to pay and they don’t let us to do it. We don’t want to see them forgiving us anything, just to give us time to continue doing it. The club is using the 50% of the budget in order to fulfill its obligations. We insist that they should treat us as any other club or any other company in Spain.” He said.

ARCHIVE NEWS NOV/12

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