BREAKING NEWS: Arsenal take out a £120m loan through Bank of England’s Covid scheme to help them cope with the impact of the pandemic – despite splashing out £45m on one player in October and paying Mesut Ozil £350k-a-week but not playing him
- Arsenal announced they have borrowed £120million from the Bank of England
- The club say it will help them manage the impact of revenue losses from Covid
- The Gunners took advantage of the Covid Corporate Financing Facility scheme
Arsenal have taken out a £120million loan from the Bank of England to help maintain its finances in the wake of the coronavirus pandemic.
The club revealed it had met the criteria for the Covid Corporate Financing Facility scheme, which has been set up to support businesses throughout the period of disruption caused by the virus.
The scheme provides short-term financial assistance to large companies with a high credit rating that make a sizeable contribution to the UK economy.
Arsenal have borrowed £120m from the Bank of England’s Covid Financing Facility scheme
The short-term loan, which is repayable in May 2021, has been a method of helping clubs ease the burden on their finances – with north London neighbours Tottenham using it the scheme to borrow £175m last summer.
In a statement, the club said: ‘As we continue to work through the implications of the global pandemic on our finances, we can confirm today that the club has met the criteria set by the Bank of England for the Covid Corporate Financing Facility (CCFF).
‘As a result, we are taking a short-term £120million loan through this facility to partially assist in managing the impacts of the revenue losses attributable to the pandemic. This is a similar approach to that taken by a wide variety of major organisations across many industries including sport, and is repayable in May 2021.
In a statement, the club said the loan would help them manage the impact of revenue losses
Arsenal spent £45m on Thomas Partey (left) last year and still pay outcast Mesut Ozil (left) £350,000-a-week
‘The CCFF is in addition to the loan provided by our owners Kroenke, Sports & Entertainment that enabled us to refinance the debt on Emirates Stadium in August last year.’
Tottenham confirmed the facility would not be used for player acquisitions after taking out their loan last year. Arsenal’s statement made no mention of this, although it is believed the money cannot be used in the market.
The CCFF was launched on March 17 last year by the bank, which sees the scheme as a way to help companies bridge disruption to their cash flows.
The club, managed by Mikel Arteta (pictured) announced a loss of £27million last year
WHAT IS THE CCFF?
On March 17, the Treasury revealed a number of measures to support businesses during the pandemic.
The Covid Corporate Financing Facility was one of the major schemes set up.
It was intended to support liquidity among larger firms and bridge disruption to their cash flows through the purchase of commercial paper.
To be eligible, applicants must make a significant contribution to the UK economy and have a high credit rating.
Arsenal’s north London rivals Tottenham made use of the scheme last summer – taking out a £175m loan to manage its finances during the first lockdown.
It has also been utilised by the FA, who borrowed the same amount in December.
The scheme is thought to have been used by around 100 companies, including EasyJet, Marks & Spencers and Greggs.
The latest figures from Arsenal’s accounts, released last February, showed a £27m loss after failing to win a place in the lucative Champions League in the year ending May 31, 2019 – down from a profit of £56.5m from 2018.
Last summer Arsenal spent nearly £80m on transfers – including £45m on midfielder Thomas Partey from Atletico Madrid, £23m for the signature of Lille defender Gabriel Magalhaes and £7.2m on Pablo Mari.
Many big-money transfers in football are paid out over a number of years, rather than cash being handed over up front.
The club made use of free transfers to land Cedric Soares from Southampton and Willian from Arsenal, while also offloading goalkeeper Emiliano Martinez to Aston Villa for £20m.
The Gunners still have a number of big money earners on their books, including outcast Mesut Ozil – who is on £350,000 a week despite being left out of Mikel Arteta’s Premier League and Europa League squads.
The German has not featured once this season, with his last game for the Gunners coming before the Premier League restart during the last lockdown.
Arsenal are willing to sell the former Real Madrid star this month, Arteta said this week, but only if the deal was right for the club.
ARSENAL STATEMENT IN FULL
As we continue to work through the implications of the global pandemic on our finances, we can confirm today that the club has met the criteria set by the Bank of England for the Covid Corporate Financing Facility (CCFF).
As a result, we are taking a short-term £120 million loan through this facility to partially assist in managing the impacts of the revenue losses attributable to the pandemic. This is a similar approach to that taken by a wide variety of major organisations across many industries including sport, and is repayable in May 2021.
The CCFF is designed to provide short-term finance at commercial rates during the pandemic to companies that have strong investment ratings and which make significant contributions to the British economy.
The CCFF is in addition to the loan provided by our owners Kroenke, Sports & Entertainment that enabled us to refinance the debt on Emirates Stadium in August last year.
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