Peterborough United co-owner regrets investment fund debt
- Published
Randy Stewart Thompson stepped down from the Peterborough board, along with Jason Neale, last November
One of the co-owners of Peterborough United said he regretted the debt the club owed to his Canadian investment fund.
Randy Stewart Thompson said a plan was now in place to repay Old Kent Road (OKR), which he founded, alongside former Posh co-owner Jason Neale.
According to the club's most recent accounts, filed last June, OKR's demand was for more than £7m, although this amount has been disputed by the club.
In an exclusive BBC interview, Thompson admitted the last 48 months had been "extremely difficult" and said the OKR debt had been caused by an oversight in the use of bridging loans relating to grant payments.
In response, majority shareholder and chairman Darragh MacAnthony said the club had to service less than £9m in "secured debt" and all creditors would get their money back.
And Neale said he continued to put the interests of Peterborough and OKR "front and centre" and hoped to return to the board of directors "in the fullness of time".
Peterborough are currently chasing promotion from League One under manager Darren Ferguson
Thompson and Neale bought a 50% share of the club from MacAnthony in 2018, through their company, Kelgary Sports & Entertainment Ltd.
"A lot of grants came into the club," Thompson said.
"We had a grant from Peterborough City Council to build the youth facility, the dome [at the club's training ground] and use it as a community building. We borrowed the OKR money and used it as a bridge.
"But once we received the grant money, that should have gone directly back to the fund. The loan then didn't get paid back. And now you have more money at risk than needed to be.
"It's very difficult to unpack what was bridging loans and what wasn't, and the exposure everybody has. So the best thing that happened was the club came to a settlement agreement with OKR."
'Cows in the ditch'
Jason Neale stepped down as a director of OKR during the summer of 2022
Peterborough won promotion to the Championship in May 2021 following a season played behind closed doors because of the Covid pandemic, only to be relegated back to League One 12 months later.
The pandemic placed a significant strain on the club's finances but Thompson believed the club's current problems could have been avoided.
"We didn't need to do this," he said. "What I regret is not being on top of the times we stepped outside of the mandates of both of us as individual investors and our fund."
When asked why the money was not repaid, Thompson answered: "Cows in the ditch. We have a saying in Canada. You don't care how the cow got in the ditch, you just want to get it out of there, and then we'll worry about how things happened.
"When the investors found out that their money was over and above what was set out in the rules, they were pretty cranky."
Posh have been based at London Road, now the Weston Homes Stadium, since 1934
In March 2021, Thompson, Neale and MacAnthony completed a deal to buy Posh's London Road ground - now called the Weston Homes Stadium - from Peterborough City Council.
The £5.265m purchase took place through a subsidiary company, London Road Peterborough Properties Limited (LRPPL).
As part of the OKR debt re-payment plan, LRPPL has been placed into receivership as security.
"We are doing a lot to get the debt restructured," Thompson added. "Darragh MacAnthony is doing a brilliant job of getting us back to where we need to be. He loves the club so much.
"We've put together a plan of recalibration and that's why we are being given time."
End of Neale link-up
Thompson's connection with Neale broke down for reasons he would not disclose.
Neale resigned as a director of OKR during the summer of 2022 and Thompson has since taken responsibility for recovering the debt - with both resigning as directors of Peterborough in November.
That cleared the way for MacAnthony to become majority shareholder again after buying back a "significant number of shares".
Thompson added: "Frankly, we have to right the fund. I had to appreciate the people who had invested the money into a fund and said to me, 'you're accountable, you're our steward'.
"The structure is in place that the club can make its payments and we can hit our deadlines."
Neale said resigning from the board had been the right thing to do for the club and OKR investors.
Running a club's 'always challenging'
Darragh MacAnthony was 30 when he became the youngest owner of an English club in September 2006
"I stepped down from the board last November to facilitate a settlement agreement between OKR and the club to proceed," he said. "It is no secret that OKR made several investments into PUFC and related entities, all of which were disclosed to investors in applicable documentation and received the necessary approvals.
"Some of these were against club assets and others against potential government funding that unfortunately did not materialise.
"However, it is important to note that where the club or related entities did win government funding, such as the £1.47 million grant in 2021, that far more than that sum was repaid to OKR. "In the last few months I have worked, and continue to work, on raising significant financing that both supports the club into the future and provides a platform for the OKR agreements to be met.
"This is tireless, unglamorous but necessary work and I am proud to continue to play this role."
MacAnthony told the BBC that Thompson and Neale had been "fantastic partners" and he still had a good relationships with both.
'Lots of positive things'
"Unfortunately Covid hurt us financially like many other clubs," he said "To navigate through it we took loans from various different entities, including me personally, with the view that player sales down the line would of course pay all debts back.
"Repaying OKR and other creditors has never been in doubt through all this."
He said Posh's playing squad was was worth more than £40m, with "less than £9m in secured debt".
"We always pay our bills and have done throughout the 18 years I have owned the club," he said.
"The club is in a good place with a lot of positive things happening at the moment and long may it continue on and off the pitch."
Timeline
March 2018: Randy Thompson and Jason Neale buy a 50% share of Peterborough United
March 2021: Posh complete a deal to buy back its stadium, paying £5.265m through a company owned by MacAnthony, Neale and Thompson, called London Road Peterborough Properties Limited. Posh also received a £1.47m grant to upgrade its training ground
September 2022: Neale resigns as a director of OKR Financial
October 2022: Redevelopment of the club's training ground put on hold owing to "escalating costs"
March 2023: OKR Financial place London Road Peterborough Properties Limited into receivership
November 2023: Neale and Thompson resign from the club's board
December 2023: Chairman MacAnthony becomes sole majority shareholder. MacAnthony confirms a loan settlement agreement with OKR Financial Limited