Tottenham's shares dropped 10p to 82p, which also reflected the City's disappointment over its results for the six months to 30 November. Pre-tax profits dropped from pounds 3.3m to pounds 640,000, and there is no interim dividend.
Colin Sandy, finance director, said: 'We don't need to raise fresh funds, but the stand can't be paid for out of cash flow. We have facilities in place, and we will work towards minimising debt.'
The overdraft stands at about pounds 4m, equal to nearly 18 per cent of shareholders' funds.
Alan Sugar, chairman, added: 'I would like to make it perfectly clear that contrary to what may be rumoured, the construction we are proposing is not extravagant in any shape or form.' The stand's seating capacity will be increased by 3,500 to 9,000.
Mr Sugar said the many 'valleys and mountains' in the club's financial history had stemmed, in many cases, from irresponsible spending to keep problems in check momentarily. 'This short-term policy is clearly wrong. The board and the playing department management are dealing with the matter, both from a commercial sense and a football administration sense, so as to avoid a future financial problem.'
In what has become a regular feature, the company was yesterday involved in more legal action. However, the hearing for its pounds 350,000 claim against Edennote, the private company run by Terry Venables, Tottenham's former chief executive, has been deferred until April.
Tottenham is also pursuing a legal claim against Bill Jenkins, the architect who designed the east stand, which had pounds 700,000 of repairs last year.
Additionally, it is contesting a claim for pounds 500,000 made against it by the Inland Revenue over signing-on fees paid to players. 'We are continuing to have discussions,' said Mr Sandy.
Costs for the continuing litigation emanating from 'the unfortunate affairs of last summer' had an impact on profitability, said Mr Sugar. Half-year operating profits rose from pounds 242,000 to pounds 275,000, but the pre-tax result was depressed after accounting for player transfers.
The biggest impact came from the sale of Gordon Durie to Glasgow Rangers. While he was sold for pounds 1m, Tottenham booked an pounds 885,000 loss on the deal because of the way it values players. He was bought for pounds 2.2m from Chelsea in August 1991. The loss on his sale was struck after taking account of pounds 300,000 of depreciation.
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