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Gills to snap up Priestfield

Gillingham's Priestfield Stadium
Gillingham's Priestfield Stadium

Gillingham's Priestfield Stadium

by business editor Trevor Sturgess

Gillingham Football Club is seeking to buy Priestfield Stadium from an associated company for a million pounds three years after it was sold for £10m.

The surprise move was described as "highly unusual" by a financial expert.

The proposal will be debated at the club's annual meeting on August 5.

Shareholders will be asked to back a special resolution "to approve the proposed purchase of Priestfield Stadium for the sum of £1,050,000 from Priestfield Developments Limited".

Club chairman Paul Scally owns Priestfield Developments which bought the ground in 2008 as part of a restructuring to ease the club's debt burden. The ground was rented back to the club for a nominal sum.

In 2008, the club blamed one-off costs associated with the transfer of the stadium for a pre-tax loss of £1.6m.

The loss was due to a restructuring charge relating to the transfer of Priestfield to Priestfield Developments for £10m, a deal negotiated with troubled bank HBOS and which at a stroke helped slash the Gills' overdraft from £12.5m to £3.5m.

Removing that massive debt allowed the club to concentrate on operational issues.

By exploiting commercial opportunities and cutting costs, the club increased sales and achieved an operational profit.

The sale of the ground by GFC Holdings to Priestfield Developments meant that Mr Scally effectively owned 100 per cent of the ground.

MORE to follow.

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