Uncertainty grows over the future of AEK

The future of cash-strapped AEK soccer club, a UEFA Cup qualifier in the upcoming season, appeared to plunge deeper into uncertainty yesterday after the government’s top sporting official indicated that a debt-relief package now being prepared for professional Greek soccer clubs would fall well short of the team’s expectations. Deputy Culture Minister Giorgos Orfanos, who holds the government’s sports portfolio, suggested that the debt-relief plan would reduce AEK’s debt to the State by 30 percent, drastically below the club’s hopes of a 95 percent cut. His comments followed an appeals court rejection yesterday for a massive debt write-off which, effectively, would leave AEK’s administration liable for 5 percent of the club’s debt to the State. The troubled Athens-based club’s total debt figure, including long-overdue fees to players, has reportedly reached approximately 30 million euros. According to regulations set by the sport’s federation, professional soccer clubs unable to meet their financial obligations face relegation to amateur competition, or the Greek fourth division. Responding to yesterday’s developments, Nikos Koulis, a close associate of the club’s ex-striker Demis Nikolaidis, leader of a group of investors that announced a majority 58 percent stake acquisition in the club in late May, contended that the team’s administration would not be able to service its debt payments based on the proposed 30 percent cut. Koulis argued that the club’s revenues were insufficient for handling the debt after the government offer. «The court’s decision is totally catastrophic,» Koulis protested. He refused to comment on what the administration’s next move could be unless a meeting were first held with Nikolaidis, currently in Portugal preparing for Greece’s Euro 2004 semifinal clash against the Czech Republic tomorrow. Nikolaidis, however, has indicated that his group of investors would, regardless of developments, not withdraw its stake from the club. For his part, Orfanos insisted that the government’s imminent debt-relief proposal, for funds owed by soccer clubs to the State, would aim at safeguarding teams from relegation. Payback schedules, he said, would not be unilaterally applied, but instead would be adjusted to individual clubs’ financial condition. The proposal would be completed within the next fortnight, Orfanos said. Because of its dire financial state, Orfanos promised, AEK would be given flexible payback status that would enable the ailing club to service its state-related debt over a 10-year period, or over 120 monthly installments. The discounts on debt owed, Orfanos said, would concern surcharges on payment defaults and interest, not the principal. He also warned that, despite its intention to salvage financially troubled clubs, the debt-relief program would be rigidly implemented. «We’re talking about debts owed by professional soccer clubs to the public sector. Not a single euro of actual debt will be spared. At this stage our thoughts are focused on payment defaults and interest, and these [factors] will provide the debt-relief programs final shape,» Orfanos said. Prior to last month’s announcement of a takeover by the Nikolaidis-led group of investors, the club’s former majority shareholder, British firm ENIC, had boosted its stake in the club to 72 percent with the aim of financially restructuring the club before selling out.

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