Glamorgan debt slashed in council deal

Glamorgan's finances have received a major boost with Cardiff Council writing off 70% of a loan made in 2006 to fund the redevelopment of Sophia Gardens. £6.4 million was owed to the council as of December but this will now be reduced by £4.4m and the remaining debt restructured.

The council are one of Glamorgan's main creditors and, following a request to write off a large chunk of the outstanding credit, have agreed to slash the club's debt. Glamorgan's other main creditors - Allied Irish Bank and former chairman Paul Russell - are owed around £10 million and have also agreed to a restructuring proposal.

Glamorgan are struggling to finance their debts and were at risk of administration if their debts were not restructured.

"As with many organisations, changes to the economy had a detrimental effect on Glamorgan," Councillor and cabinet member Graham Hinchey said. "But it is imperative that this long established sporting institution does not go into administration."

Glamorgan's ground development saw them stage an Ashes Test in 2009 and Australia will return to Cardiff for a Test this summer. Local businesses benefitted by an estimated £4m from the 2009 Test match.

"The council's decision is extremely important to the club and is one of the final pieces in the jigsaw in re-negotiating our debt," Glamorgan chief executive Hugh Morris said. "The club still faces financial challenges in the months and years ahead and we are mindful of our responsibility to develop our business to safeguard our long-term future."