Dons fans were given something to celebrate last night as Aberdeen Football Club unveiled a deal to wipe off its debt at a stroke, thanks to a multi-million-pound finance agreement which paves the way for a long-awaited new stadium and training facilities.
The breakthrough follows a major investment by local businessman Willie Donald and his wife Elaine, owners of civil engineering contractors Wm Donald, which will help put the club in the black for the first time in 21 years.
Subject to shareholder approval at the annual meeting, to be held on December 15, the Dons’ £15.9million debt, which began with the construction of the Richard Donald Stand in 1993, will be effectively wiped out.
Last night AFC chairman Stewart Milne said he and his colleagues were immensely grateful to the couple from Netherley, near Stonehaven, who have been longtime corporate supporters of the club.
“The negotiations have been ongoing for a number of months now and these arrangements will I believe be transformational for the club,” he said.
“The club are indebted to Willie and Elaine for the role they have played in this. If the final steps are approved at the annual meeting we will have a strong balance sheet and the debt servicing burden will be removed allowing us to drive forward on training facilities and the plans for the new stadium with much greater confidence in our ability to raise the additional investment needed.”
Both Aberdeen Asset Management and Stewart Milne Group have also swapped debt for increased ownership in the club as part of the financing deal.
This, along with the undisclosed sum provided by Mr and Mrs Donald, means the Dons will be able to slash their debt by £14.49million.
As part of the restructuring the Aberdeen FC Community Trust will also receive a sizeable shareholding.
Until now, the club’s future plans have been hampered by outstanding bank loans of £10.26million. Pittodrie chiefs had agreed to pay £5million by the end of 2015, with a further £4.7million due at the end of 2017.
The Donald family have no interest in seeking a presence in the Pittodrie boardroom following their investment, which has granted them a 10% shareholding of the club.
Mr Donald, 59, who founded the company with his wife in 1977, said: “Our family recognises we have been fortunate to have grown our business in a city and region that has benefited from the impact of the energy sector over the last 37 years.
“We decided some time ago that we wished to give something back to the community and we see the football club as a vital and central part of the community.
“We see this investment as an excellent opportunity to deliver our objective.”
Last night Stewart Milne said the transformation of the club’s financial footing mirrored the on-field contribution of manager Derek McInnes and his players.
He said: “The period covered in this report has seen a significant change in the fortunes at Aberdeen Football Club given the team’s success in lifting the League Cup.
“The work ethic, attention to detail and man-management skills of Derek and his management team have yielded significant dividends that they and the players can be rightly proud of.”
Dons chief executive Duncan Fraser added: “Stewart Milne Group and Aberdeen Asset Management, by agreeing to convert debt to equity, have been pivotal in making this restructuring happen.
“It was only possible to agree this restructuring because the club has demonstrated it can operate at a break even position.
“Having taken many hard decisions over the years we intend to continue the strategy of only spending what we can afford and maintaining an appropriate wages to turnover ratio.”
He added that the success of the club on the pitch last season had also been crucial in helping to remove the debt burden at Pittodrie by adding millions to the club’s turnover.
Mr Fraser said: “The overall turnover increased from £7.85million to £11.158million, as the club finished third in the SPFL, won the League Cup and reached the semi-final of the Scottish Cup, compared to eighth in the SPL, the fourth round of the League Cup and the fifth round of the Scottish Cup (in the previous season).
“Wages increased from £5.256 million to £6.084 million as a direct result of much higher performance bonuses being paid to the playing and management staff. The consequent wages to turnover ratio has dropped from 67% to 55% which in terms of industry averages is an excellent result.”
Read the joyful fan reaction here.