FC Twente faces bankruptcy if municipality doesn't step in: report

FC Twente is threatening to file for bankruptcy if the Enschede city council does not stand guarantee for 7 million euros, newspaper Tubantia reported on Thursday. There is not much political willingness to stand guarantee for more money for the football club, sources told the newspaper.

A guarantee means that the municipality will pay 7 million euros to FC Twente's creditors if the club can not pay it themselves. FC Twente already has a 17 million euros loan at the municipality, and Enschede is already standing guarantee for 8.4 million euros. That means that if FC Twente files for bankruptcy, the city has to write off 25.4 million euros. Next season FC Twente has to pay the municipality 2.1 million euros in interest and repayment.

FC Twente's relegation meant further financial troubles for the club, according to Tubantia. The club already cut its budget from 30 million euros to 18 million euros. The club does not have the money to put together a team that will get it promoted immediately again. FC Twente wants to free up money by selling 25 percent of the club's shares to sponsors, hoping that this will raise 14 million euros. But sponsors are hesitant. Some are willing to buy shares, but only with the guarantee that their money will be invested entirely in new players, and not go to the municipality or tax authorities.

The football club's position is leading to irritation among Enschede politicians. The pressure the club is exerting has reached unprecedented levels, municipal council members said to the newspaper. "Unbelievable what is going on", future alderman Niels van den Berg said. "It does not stop there. For us a new guarantee is not at all obvious. As city we have to cut 15 million euros."

The municipality is willing to help FC Twente by not demanding loan repayment and interest for the time being, sources in the town hall said to the newspaper, but all factions are against standing guarantee for another 7 million euros.