It's official...we're financially up sh*t creek! No surprise there though as the club have been very upfront about matters all year.

The Board have announced today a financial action package to make sure we don't get hideously into debt like all our main rivals.

As well as probably another share issue (always dangerous when Mr Kinch is around) and renegotiating loans with creditors, it looks like the cancelling of players contracts is a real option.

With players like Dennis Wise on £1.5million a year we can only hope he's the first to be offered the door. Expect an exodus of big name players before the start of the season...

Here's the statement from the board in full...

The board of directors of Leicester City Plc ("the Board") today announces the following:

Leicester City Plc and its subsidiaries Leicester City Football Club ("the Club") and Leicester City Developments Limited (together "the Group") are experiencing short and medium term cashflow problems which the Board is seeking to resolve by pursuing a number of remedial actions outlined below.

The Board believe that its current difficulties have been caused by a number of factors:
· poor performance on the pitch last season resulting in the Club's relegation to the Nationwide First Division;
· the much-publicised escalation of current player wage costs to levels which the Board believes are unsustainable for the Club playing in the Nationwide League;
· little general activity in the football transfer market and inability to achieve material player sales (in addition to Gary Rowett and Robbie Savage);
· the recent winding-up of ITV Digital and the broadcasting agreement between the Football League and BSkyB being concluded at a significantly lower value than the previous ITV Digital agreement; and
· the above factors, when combined with weak equity markets generally, contributing to the Company's poor share price performance which has greatly restricted the Company's ability to raise equity capital from institutional shareholders.

The Board is currently pursuing a number of remedial actions with a view to solving the Group's cashflow problems and to ensure that the Club enters the 2002/03 football season as a viable entity with a stable base from which to seek promotion back to the Premier League. These actions are outlined as follows:

· entering into discussions with both existing and potential shareholders with a view to raising significant fresh equity capital;
· further player sales; · the implementation of a rationalisation plan to be completed shortly with a view to significantly cutting costs - primarily player wages;
· entering into discussions with third parties to identify additional sources of finance for the Group; and
· entering into discussions with certain of the Company's larger creditors with a view to renegotiating repayment terms so as to procure more efficient utilisation of the Company's cash resources.

The Directors believe that, upon the successful implementation of the actions outlined above, the Group will have a viable business for the future. Shareholders will be informed of any developments as soon as is practicable.

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