Yahoo Finance England sponsor NatWest left Lancashire Cricket Club with ‘punitive’ loan
The bailed-out lender that sponsors England’s cricket team refused to refinance a high interest loan that was crippling the finances of one of the most popular county clubs.
Lancashire County Cricket Club chief executive Daniel Gidney said he was forced to turn elsewhere after NatWest balked at the chance to restructure its debts.
The club, which has revealed record profits following last year’s World Cup and Ashes series, instead struck a deal with Metro Bank for a £26m loan - halving its annual interest bill.
Mr Gidney said: “We would have found it incredibly difficult to get to where we are now, what with Covid and the revenue streams dropping off a cliff."
Lancashire, whose history can be traced back to 1856, sought to overhaul its finances last year. Mr Gidney said the club had been shackled to a “punitive” financial hedge from NatWest, locking it into 8pc interest payments.
NatWest - part of Royal Bank of Scotland, which was rescued with £46bn of public money during the financial crisis - was not prepared to offer a deal that would fully restructure the club’s debts. Lancashire took out a series of short-term loans to fund a major overhaul of its Old Trafford ground.
Mr Gidney said: “We wanted a 10-year term and £26m. I think those were the elements that NatWest felt that they couldn’t support us on.
“They did come up with an offer, but it was a five-year term and it wasn’t anywhere near the debt [amount]. So we wouldn’t have been able to restructure.”
Mr Gidney said that more established high street banks are wary about lending money to cricket. Many put the sport in the same bucket as football, which suffers from notoriously turbulent finances.
The Lancashire chief remains optimistic that at least some of the 2020 cricket season could be played in front of fans.
He said: “A lot of people think the stadiums can't socially distance because they’ve got 20,000 to 25,000 people, but you could have 2,000 or 3,000 people in the 20,000 seat stadium with protections in place."
A NatWest spokesman said: “We worked extremely hard alongside the club, over a long period of time, to come up with refinancing solutions. We are unable to comment further on the specifics of this case, and the refinancing discussions referenced were in 2018. We consider the support offered at that time was appropriate given a number of different factors.”
