Sugar guarantees pounds 10m Spurs loan

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ALAN SUGAR, the chairman of Tottenham Hotspur, had to give a personal guarantee to secure a fresh pounds 10m borrowing facility to fund the company through the coming season, according to sources close to the club, writes David Hellier.

The facility with Lloyds Bank means that the quoted company may not need a rights issue, even though the football club faces large extraordinary expenses. However, news of the guarantee may surprise those shareholders who believed that the club's recent acquisition spree was financed solely from internal resources. Tottenham shares rose 21 per cent last week to 110p.

Mr Sugar, who recently negotiated the pounds 2m signing of the 30-year-old German striker Jurgen Klinsmann, has said publicly that he is funding the club's signing and that of the Romanian star Ilie Dumitrescu from the cash flows of the company and its financiers.

Sources say that Mr Sugar, who is also chairman of Amstrad, the computer company, has only been able to arrange the facility on condition that he provides a personal guarantee for the money. This has given comfort to Lloyds in the event of the club defaulting on its repayments.

Amstrad also banks with Lloyds, as does Mr Sugar personally. He is believed to have several millions of pounds on deposit at Lloyds.

Last autumn, after the falling out between Mr Sugar and Terry Venables, the company's former chief executive, the company changed banks from Barclays.

It is believed that Barclays was concerned about extending its exposure to the company at the time its chairman and chief executive were feuding.