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FAI facing fight for survival as alarming accounts reveal association breached banking covenants


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FAI President Donal Conway during a press conference where the association revealed their accounts. Photo by David Fitzgerald/Sportsfile

FAI President Donal Conway during a press conference where the association revealed their accounts. Photo by David Fitzgerald/Sportsfile

SPORTSFILE

FAI President Donal Conway during a press conference where the association revealed their accounts. Photo by David Fitzgerald/Sportsfile

The FAI must renegotiate its existing financing arrangements and ensure continuing financial support in order to survive, it has warned.

The stark admission came this afternoon as the embattled football association published its 2018 accounts and revised accounts for 2017 following the exit of its controversial chief executive John Delaney earlier this year.

The association has also been subject to an audit by the Revenue Commissioners. That could see the FAI paying €2.7m for the underpayment of employment taxes and VAT. The sum would include penalties and interest. The figure relates to the years 2015 to 2018, but the FAI said the potential liabilities "have yet to be accepted by the revenue authorities".

The 2018 accounts confirm that Mr Delaney received a €90,000 payment in lieu of notice, while €372,000 was paid by the FAI into his pension fund. It said these payments are in "full and final settlement" of a potential €2.1m the former chief executive could have received.

They showed that the association posted an €8.8m loss last year. It also said that its 2017 loss was €2.8m. That compared to the near €2.8m surplus that the FAI’s previous set of accounts for 2017 stated it had generated.

The association’s 2018 accounts published today also show that it had net liabilities of a staggering €55m at the end of 2018 and has been haemorrhaging cash since the end of last year.

"The association is reliant upon continued financial support from UEFA and the association’s bankers," the accounts note.

The 2018 accounts note that at the end of last year, it had received a total of €8.5m in funding and grants from UEFA, up from €5m at the end of 2017.

"The association is in advanced discussions with its bankers in trying to agree long term funding that will enable the association to meet its liabilities as they fall due and provide financial stability to the balance sheet in the short and medium term."

The FAI had bank loans totalling €28.2m at the end of 2018 and noted that it has technically breached covenants attached to the loans. The breaching of bank covenants, or financial commitments that a borrower must adhere to for the lifetime of the loan, is a potentially very serious matter. Such breaches can permit a lender to seek repayment on demand of a loan.

"Subsequent to the year end, the association received covenant waivers from its bankers in relation to technical covenant breaches relating to 2019," the FAI’s 2018 accounts state.

The latest set of accounts also note that "no bridging loans" were provided to the association in 2018, after Delaney gave a €100,000 bridging loan to the FAI in April 2017.

"On 11 December 2018, the former CEO and director, as part of a fundraising exercise by the FAI, personally provided a donation to the association of €50,000," the accounts note. "This was unconditional and did not provide any rights or obligations."

Amongst the revelations in recent months in relation to the crisis-hit FAI, was that the club paid €69,000 towards John Delaney’s 50th birthday bash in 2017 at the luxury Mount Juliet hotel and golf estate in Co Kilkenny. He reportedly repaid €50,000 soon afterwards.

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