Real Zaragoza have reduced their debt by perhaps more than €50m and announced a €20m profit for the last year, thanks to the Bankruptcy Act.
The Aragonese were reported as having debts in the region of €110m when they entered bankruptcy proceedings in 2011, but are now improving matters.
The Bankruptcy Act means that the club have been able to halve their debts, posting a new deficit of €49m this week.
This has been combined, announced CEO Pepe Guerra at the club’s AGM on Monday, with austerity measures that have reduced costs both sporting and otherwise.
The players’ wage bill has dropped by €8m in the last year and although the annual revenue generated by the club has fallen by €500,000, Zaragoza can report a profit of over €20m. The club confirmed that had they not been able to cut debt then their annual income would have turned into a €17m loss.
“We are not proud to have entered bankruptcy, but we are attempting to leave this process as soon as possible,” commented President Agapito Iglesias [pictured] to shareholders yesterday, in his first address for several months.
“What has been done is to restructure all debt of Real Zaragoza’s for the next eight years. We wished to do so without going into bankruptcy, but we could not reach an agreement with all the creditors and suppliers.
“We understand that we can make a success of the agreement. The budget over the next three years is adjusted to include the television contract.”
Iglesias, who was voted back in for another five years as President at the meeting, went on to confirm that he has had no offers to buy the club.
“The only solution we have is to create a capital increase, because that is where you really see if there is capacity to have more income at Real Zaragoza.
“ That way anyone around the world might want to invest, but in the past people have come and gone and that includes myself.”