The £10.25 million owed by Northampton Town to the borough council will be transferred to the development surrounding the ground, cabinet members have agreed tonight.
In a deal reached during private discussions at The Guildhall this evening, councillors agreed to free the club of the outstanding loan repayments, leaving the way clear for the final paperwork to be signed transferring the club to Kelvin Thomas and his consortium.
The borough council, which owns the land surrounding Sixfields Stadium, will now bid to recoup the money themselves by agreeing a deal with a future development.
Previously, the borough council said it could not identify what had happened with the £10.25 million loaned to the club to pay for the stadium redevelopment.
In a statement issued after the meeting this evening, the council said an outline agreement had been reached with Kelvin Thomas.
“A memorandum of understanding has been agreed tonight.
“Cabinet has agreed to move forward with a deal that would see the debt owed by the club transferred across to the development land.
“The club would then be free, subject to meeting conditions, of debt to the borough council, putting the club on a stable footing for the future.
“Control of the land development and pursuit of the debt would come back to the borough council.
“To repay the debt, the borough council will move forward alone with the development of the land around Sixfields. The club will also relinquish to the council the right to recover outstanding money from First Land and County Developments Ltd.
“The agreement would also see the consortium led by Kelvin Thomas pay off the club’s debt to HMRC and plan to finish the East Stand and develop conference facilities at the ground.”
Councillor Mary Markham, leader of Northampton Borough Council, said that the agreement represented the only deliverable place to safeguard the future of the football club and the best option for seeing the loan repaid and the missing money recovered.
“It is clear that if the club is to survive and have some stability, we have to find a way of repaying the debt. This deal puts us in the strongest position to ensure that the public purse is protected. The council will now be in control and all the proceeds will come back to us to repay the debt.
“We have been badly let down, and will also be pursuing the parties involved in the earlier development in every way we can for the return of the public money.”