Ukio step in to salvage Hearts' debt

HEARTS' parent company, Ukio Bankas Investment Group, are preparing another debt-for-equity swap to reduce borrowings at Tynecastle after the club announced debt of £34.78million in their annual accounts.

UBIG wiped 12m from Hearts' debt with a funding-for-equity scheme in July 2008, and a similar operation is planned later this year to improve financial stability.

Hearts' accounts for the year up to 31 July, 2009, show debt has risen by more than 4m from 30.48m the previous year, and club officials have confirmed there are plans to take action.

UBIG have voluntarily reduced the overall debt with a 500,000 donation this year but a more significant sum will be announced in the not-too-distant future, in exchange for equity in the club.

Hearts' costs have been reduced by over 3m with the wage bill cut by seven per cent, finance costs down 19 per cent and operational costs down 31 per cent. The club posted a loss of 8.6m for the year, a notable decrease from the previous year's 11.2m.

The accounts in question include wages paid to high earning players such as Christos Karipidis, Bruno Aguiar, Robbie Neilson and Steve Banks, all of whom have since left Tynecastle and consequently brought the current salary bill down.

Transfer income was recorded at 1.81m, largely a consequence of Christophe Berra's transfer to Wolverhampton Wanderers in January 2009.

Hearts officials remain cautiously optimistic over the club's future. A club spokesperson said: "We are heading in the right direction with regards to increasing operational efficiency. We are looking to the future with cautious optimism."

A club statement read: "The board remains focused on improving revenues, increasing efficiencies and reducing costs across the business. The club's employment costs will continue to reduce significantly in seasons 2009/10 and 2010/11 as a number of players reach the natural end of their contracts.

"This will in turn assist the club in bringing the budget for playing staff closer to market standards without compromising on quality."

Hearts' shirt sponsor for next season will continue to be Ukio Bankas.

The club had examined possible replacements for the Lithuanian bank but opted to continue with their name and logo emblazoned across next season's kit.