Caley Thistle have two weeks to avoid plunging into administration – with balance sheet losses on course to reach £3.8million by next summer.
A letter from interim chairman Panos Thomas was sent to shareholders on Wednesday morning outlining the clb has two weeks to find £200,000.
Consultant Alan Savage, the Orion Group chief and former club chairman, put £100,000 into the League One club last week, taking his tally in recent months to £350,000.
A crowd-funding venture will be launched within days to try and attract money.
Balance sheet losses are also on course to reach £3.8m by next summer, while anything up to £1.6m is needed before the end of this season.
Administrators have been in early talks with ICT, because if key funding is not found within two weeks, this will be their only option.
Along with the job concerns and financial implications of that would come a 15-point punishment from the SPFL, which would take ICT from sixth to bottom as it stands.
Savage spells out need for action
Savage told the Press and Journal said: “The club is in a real mess and this (email) highlights how bad it is. It’s a result of what’s happened at this club over the past five years.
“With losses of anything between from £1.4-£1.6m (expected) by the end of this season, we can’t change too much about that.
“I have been telling people over the past six weeks that I felt there was a massive problem. My findings confirm there’s a really big problem.
“We are speaking to the best people possible to try and get the best outcome for this club.
“Hopefully, this letter now focuses everyone’s minds on what we need to do. We need a reset.
“Who knows what might happen in the coming weeks. If I do remain involved, I will aim to get this club into the best possible position.
“We’ve highlighted the problem today. This is not imaginary. This is real, and we need to react.
“If we can get money in through crowd-funding, it has to happen now.
“If no one else comes to the party, I will probably have to pay for the club’s administration. It’s going to fall on me.”
The letter from interim chairman Thomas states the conclusions from the recent financial appraisal of the club, including:
- A loss of £1.2m for the 2023/2024 season.
- A predicted loss in the current season of £1.2m based on current projections (this does not account for additional expenditure that will also have to be incurred in restructuring the club as a (League One) business).
- Trade creditors (including HMRC) stood at £600,000 early in August – this includes monies due for a contract with the kit supplier, where the club is committed to a spend of £125,000 per season for the next three seasons.
- A provision against litigation threatened by the club’s former CEO (Scot Gardiner) which could, if the club’s case was unsuccessful, cost “£170,000+”.
The letter also notes former directors’ loans currently stand at £3.425m, which would cause the balance sheet to stand at negative £3.8 million by May 2025, with the conclusion “a huge injection of cash is urgently required in the short term to keep the club afloat”.
Savage’s recent input tops £350,000
Savage returned to try and find an investor, but vitally to take hold of the financial situation, which he has said was worse than he envisaged.
With no investment found thus far, the Orion Group chairman Savage has personally injected £350,000 in wages and tax payments to keep ICT afloat.
Now, in an 11th-hour bid to secure lifeline funding, Caley Jags – who were Scottish Cup winners nine years ago – are appealing for help, and the clock is ticking, or administration will happen.
Urgent need for £200,000
A “Save ICT Fund” crowdfunding page is to be set up to give Inverness a chance of survival.
In the letter to shareholders, it explains: “The latest cashflow projections predict that at least £200,000 will be needed by the end of October.”
It adds: “Unless the (crowdfunding) appeal can raise £200k immediately, and certainly by Wednesday, 16th October, then administration is inevitable, because the club would be insolvent.”
Administration would spell heavy points deduction – up to £1.6m needed to make it through season
Worried staff, players and management have been spoken to by former boss and current interim chief executive Charlie Christie, spelling out the situation as the club simultaneously seek to find wins to move up from sixth place in the third-tier of Scottish football.
Administration, should it happen, will lead to an immediate League One 15-point deduction – which would send Duncan Ferguson’s team bottom of the division with a minus-six point tally.
The loan move for Dundee attacker Charlie Reilly was rubber-stamped on Sunday night, just ahead of the deadline, although the funding of the move which secures him until January remains under wraps for the low-scoring Highland side, who are at Arbroath this weekend.
An open meeting for shareholders, stakeholders and fans has been set up for Monday night at the Caledonian Stadium from 7.30pm to discuss possible ways to find vital income.
The amount estimated to be required to get to the end of this season (in terms of cash requirement, potential claims and backlog creditors) is in the region of £1.4-1.6m. This figure assumes a second-place finish in the league and excludes the £350k already paid into the club by Alan Savage.
Administrators poised to step in
As well as speaking to the SPFL to highlight the situation the club are in, the letter to shareholders also confirms initial discussions have been held with administrators – believed to be Glasgow-based BDO, who were in charge of Rangers’ liquidation and the financial issues faced by Dunfermline Athletic and Hearts.
The letter says: “Discussions with Scotland’s leading football administrator have also taken place, after which the board determined that it was duty bound to investigate what the administration process would entail, if that was to be initiated in a final attempt to avoid liquidation of the club.
“Subsequent discussions have been opened with an administrator experienced in dealing with administrations for Scottish football clubs.”
Club need more than Savage’s input
In a nod to Savage’s financial input and expertise, the board noted: “Whilst Alan Savage’s temporary financial lifeline has undoubtedly saved the club from insolvency in the last few months, now that he has reported in depth to the board, it would be unrealistic to expect that lifeline to continue.
“A decision as to the future path of the club must be made in the next few weeks and certainly by end October at the latest.”
Anyone with “any innovative ideas for raising substantial funding, that might have been overlooked by the ICT board is also urged to email panos.thomas@ictfc.co.uk
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