FAI closing in on deal to knock €10m off debt
THE FAI are on the brink of clinching what has been described as "a phenomenal deal" which will knock a whopping €10m off its debt.
The heavily-indebted association is refinancing its Aviva Stadium loan on very favourable terms, which should lift the financial pressure it has been under since the construction of the new stadium.
The Sunday Independent understands the deal is expected to be closed within the next 48 hours and that it includes a €10m debt write-down and more favourable repayment terms over the lifetime of the loan.
This development is a significant boost for the FAI which has always insisted that it would be debt-free by 2020. The restructuring of the loan will bring an end to the Association's arrangement with Danske Bank.
"This puts the FAI on a sound footing," a well-placed source said yesterday. "Next year will be tough but these are favourable terms and we can be optimistic after that," an FAI source confirmed.
"There will be significant savings over the term of the loan," another source added.
It is believed that the FAI had entered into negotiations with a new bank and that the deal was expected to be completed on Friday until a delay in finalising the paperwork held it up until after this weekend. However, with all the paperwork now complete, there is confidence the deal will be closed before Christmas.
Because of the shared ownership of the Aviva Stadium and the government involvement, it was, sources say, a complex deal but all the legal elements have also been completed.
The FAI accounts for 2012 showed that they owed €59m on the stadium. The FAI had only paid interest on the loan until this year when they began to pay off the principal so the €10m write-down is hugely significant.
The last accounts also showed that the Association's income fell from €16.97m in 2011 to €15.96m and that turnover fell by 12 per cent, from €45.1m to €39.67m.
Last June, UEFA confirmed that they had advanced a "solidarity payment" to the FAI and its finance director Josef Koller met with Danske Bank to explain the situation.
The FAI's chief executive John Delaney told a meeting of the FAI Council on Thursday that they had made significant progress on the refinancing and he thanked those who had helped make the deal possible.
Delaney is expected to confirm the refinancing within the next 48 hours.
The FAI have been energised by the appointment of Martin O'Neill and Roy Keane to the management team which they feel will boost the popularity of the national team and the news of the refinancing, when confirmed, will provide them with further reasons to be cheerful.
The FAI declined to comment yesterday.