Cefn Druids AFC is saved from the gallows

One of the new Druids sponsors Jamie Digwood (left) with former chairman John Hughes. Picture: Cefn Druids FC Facebook page

One of the oldest football clubs in Wales has been saved from going out of business.

Cefn Druids AFC, which has been in existence for 148 years, has today announced a rescue package which ensures the club can continue.

Just four months ago, the future looked bright when Druids revealed it had secured major financial investment.

News emerged that two local sponsors, Global Travel Worldwide in Wrexham and Complete Sports Solutions in Chester, had combined their financial resources with the sole aim of taking the club into European competition on a yearly basis.

However, last week the JD Cymru Premier club reported it was served with a winding up order by HMRC relating to debts from 2018/19 that was undeclared to new investors.

Cefn Druids celebrate winning the NEWFA Challenge Cup last season

The club revealed that members of the old board of directors were in talks with the new investors and hoped a resolution could be reached before the hearing to save Druids from going under.

Today, a joint statement from the club and former chairman John Hughes, confirmed discussions have produced a positive response.

“I am pleased to announce that Cefn Druids FC has reached an agreement with the new major sponsors of the club to clear the outstanding debts and save the club,” it said.

“Since Cefn Druids Football Club moved to its current stadium, we have struggled to raise the funds to compete in the Welsh Premier League.

“Each year, the management of the team has demanded an unsustainable increase in the playing budget and the board has never been able to meet those demands.

“The prize money from our recent Europa League games was used to pay historic debts, medical and competition expenses and the balance was used to contribute towards the playing budget.

“In March 2019, the board were presented with the stark facts that the club needed an urgent fundraising campaign or a substantial financial investment or the club would cease to exist and go out of business.

“With none of the directors willing to make a financial investment, it was left to myself and two employees of the club to put our personal cash into the club in order for it to survive.

“As chairman, I took it upon myself to seek financial investment and approached one of the sponsors to help conduct a business review. This review was hampered by unwilling and unhelpful directors and employees who were suspicious.

“In April 2019, a further summary was presented to the Board of Directors outlining the reality of the financial situation. This was met with hostility and scepticism by the directors. A further financial report was presented to the directors in May 2019, outlining the same facts, however, and once again the Board of Directors refused to recognise the reality of the situation.

“In July 2019, the Board of Directors were given a proposal that saw major financial sponsorship and investment into the club, a sustainable business model that protected the assets of the club and its identity. Once again, the Directors refused the offer and ignored the need to find a cash injection or look at fundraising options.

“In September 2019, we were given an ultimatum to either accept the offer from the sponsors or they would retract it. The offer was to clear all the club debts regardless of amount, a blank cheque of sorts.

“Their aim was not to seek a seat on the board or take control of the club assets. They wanted to leave the current Board of Directors in place, put financial controls in place and put together a sustainable business model for the club.

“Faced with the reality of having to invest their own cash, the directors voted to accept the proposal in principle and allow a four-week due diligence period whereby we would hand over all the financial documents.

“During the due diligence, a few directors resigned in protest of the agreement and spoke publicly about the agreement, which was not always presented in a factual manner.

“Two days before the agreement was to be finalised and agreed, two of the directors insisted that the agreement was legally ratified on the basis that they were sceptical of the agreement and wanted to make sure the future of the club was secure. In turn, the sponsors added a clause that any and all debts that were not declared prior to November 1st 2019 would be paid by the Board of Directors, responsible for the period April to November 2019.

“On November 11th 2019, the Board of Directors highlighted to the new sponsors substantial undeclared debts. Rather than withdrawing the offer, they (sponsors) paid a majority of the debts, introduced stricter financial controls and tightened working practices.

“By February 2020, the undeclared debts had doubled and despite numerous requests to the old board, no one was willing to pay any of the debts, honour the legally binding contract they have insisted on and furthermore, some of the former board members have embarked on a hate campaign towards both (sponsors) Jamie Digwood and Des Williams, which I find extremely distasteful.”

The statement continued: “Why were these debts undeclared?

“At numerous board meetings, I stressed the need for the directors to raise funds and was ignored. I constantly and consistently requested assistance from the directors to help with fundraising activities, to no avail, and it was at this stage that I began to disengage from the responsibilities of the club’s chairman. Thereupon, the debts continued to increase, and the Board of Directors disengaged.

“The financial review was extremely unpleasant to read, and in light of the situation I should have resigned as chairman, especially as I was given a vote of no confidence by the board for bringing Des and Jamie to the table.

“The Board of Directors, with myself as the chairman, failed to grasp the need to treat the club as a growing business rather than a football club. We as a board failed to act in the best interests of the club.

“I resigned as chairman of the club in November 2019 and I will now resign as a director of the club, alongside the other remaining directors of the old board but I shall remain chairman of the new management company that will be taking on the role of overseeing the running of the commercial side of the club.

“I would like to place on record my sincere gratitude to both Jamie Digwood and Des Williams for all their help and assistance and I leave the Cefn board knowing that with the correct support and structure the club has a positive future.”

A statement from the sponsors is expected to follow shortly.

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