The sale is the outcome of a decision made late last year after a complete business review of the football club by the Finance and Operations Committee.
The recommendation to the sell the venues came after a strategic decision was made to reduce the debt level to zero.
Chairman of the Finance and Operations committee and board member Mark Korda, of leading financial and restructuring firm KordaMentha, said “we believed that a debt free position of the club would be appropriate. The decision also reflected the performance of the Beach Hotel which had not met forecast and we recommended to the board a change in strategy.”
That recommendation was accepted by the Board and an action plan prepared.
The club immediately sold the clubs share portfolio at a high point of the market and now has completed the sale of the two venues that held debt.
On settlement of the sale, the Club’s debt will have been repaid in full.
The loss on the sale of the two venues will be approximately $4.5million, however the sale will result in an interest saving of approximately $1million per annum.
The Club will continue to operate The Club in Caroline Springs, The Lilydale International and The Coach and Horses which are debt free and profitable.
On current forecasts The Collingwood Football Club will return an operating profit of over $2million for the 2008 season.
Collingwood president Eddie McGuire said “while it is extremely disappointing that a loss has been incurred, the outstanding performance of the club in recording nine years of record profits has meant that the loss can be absorbed without impact to the football club or its desire to continue to grow.”
Club CEO Gary Pert said “while the operational performance of the two venues has improved in recent months, thanks to the introduction of a new management team, it was decided that we move from these highly geared venues into a more conservative business model in line with the market and world economic circumstances currently being experienced.”
