Hearts debt for equity plan is approved

HEARTS shareholders have approved a debt-for-equity conversion which strengthens Ukio Bankas Investment Group's control of the club whilst erasing £10 million from their accumulated arrears.

An Extraordinary General Meeting at Tynecastle yesterday saw the move ratified, which immediately saves Hearts 500,000 a year in interest payments. Debt now sits at an estimated figure of between 25m and 26m before this year's operating costs are taken into account. Hearts' last annual accounts reported club debt at 34.78m.

The Tynecastle board will continue to explore means of improving the club's financial footing but for now must rely on UBIG's backing. UBIG has converted 10m of the debt due from Hearts into 100,000,000 ordinary shares at a price of 10p per share.

Hearts chairman Roman Romanov said: "The directors of Hearts are pleased that the agreement with UBIG removes a further 10 million of the current debt owed to UBIG by converting it into ordinary shares.

"As before, in 2008 when the company reached an agreement with UBIG to convert 12 million of debt into equity, this strengthens the company's capital position in keeping with UBIG's strategy for Hearts, whilst removing a considerable amount of the company's short term liabilities."