WNSL bailed out with £25m from the Football Association

The Football Association has had to bail out Wembley National Stadium Ltd (WNSL) with a £25m rescue package, according to results released this week that show it made a loss of nearly £5m in 2005.

The accounts, posted at Companies House, indicate that the FA, the parent company of WNSL, intervened this year as delays over completing the ground reached crisis point.

They also show that WNSL reported a loss of £4.7m for the year ended 31 December 2005, almost all because of delays to the completion of the stadium, now nearly a year behind schedule.

Last month it also agreed to pay contractor Multiplex £36m in an out-of-court settlement.

At the end of 2005 WNSL’s debts included a £316m loan from its banks and £141m from the FA.

According to the accounts WNSL’s original loan agreement with the banks was obtained on the condition that the stadium was finished by 30 September this year. When it became clear that WNSL would fail to hit this deadline WNSL was forced to renegotiate the deal and accept the £25m financial support package from the FA.

The documents also reveal that the FA has an annual support agreement in place to assist WNSL financially once the stadium becomes operational. This is expected to amount to £23m for the first year after completion, and £13m a year thereafter, until certain conditions on the stadium’s profitability are met.

The loan from the FA is all repayable after five years, but the WNSL is entitled to retain a minimum of £100m for 50 years after the date of practical completion, unless the Department for Culture, Media and Sport overrides the agreement.

The accounts also reveal that despite the losses, WNSL’s highest paid director, understood to be chief executive Michael Cunnah, received a salary of £325,000, rising to £398,000 with benefits and pensions. WNSL’s 10 directors, including chairman Mike Jeffries, received £736,000 over the year. WNSL’s wage bill, excluding directors, ran to more than £3m.

In a directors’ report accompanying the accounts Roger Maslin, the finance director of WNSL, said the company’s financial position had been eroded by delays.

He said: “Although considerable progress has been made with the construction of the stadium during the period under review, the project has been delayed by the contractor’s lack of progress with the steelworks and by the work required to repair the drains.”

Maslin added that it was likely to take about three months from the date of practical completion for WNSL to obtain the operators licences required to open the stadium to the public. He said: “The directors are committed to delivering a quality stadium as soon as possible.” WNSL declined to comment further.

The results paint a bleak picture for WNSL, but the situation may have been worse without last month’s £36m settlement with Multiplex. The deal, which was brokered with the assistance of government troubleshooter Lord Carter, falls far short of the £320m Multiplex was rumoured to be seeking from WNSL, and avoided a £150m court battle between the parties.