Hearts cut debt to bank by £12m

Hearts have reduced their debt by £12m after their bank converted money owed to it by the Scottish Premier League club into shares.

The club were about £37m in debt in the year to July 2007, but the latest move will improve the next set of accounts.

Conversion of bank debt into shares for Lithuanian bank UBIG was approved by shareholders at an extraordinary meeting at Tynecastle on Thursday.

Hearts say the move will save the club £600,000 in annual interest charges.

Those were still due to UBIG, despite the bank being owned by Hearts' majority shareholder Vladimir Romanov.

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Chairing the meeting, Hearts director Sergejuis Fedotovas said they are pursuing other areas to further cut the debt.

"The debt for equity plan provides further evidence of UBIG's aim to continue to develop Hearts on and off the field and, together with continued cost efficiencies, help the club reach profitability," said a club statement.

"The conversion allows Hearts to benefit from a much stronger capital position and provides opportunities to raise external funding for the redevelopment of Tynecastle Stadium."

Hearts' next financial figures will also be boosted by the £9m paid by Sunderland for goalkeeper Craig Gordon and £2.5m from West Brom for striker Roman Bednar.

In addition, the Edinburgh club have been actively reducing the size of their wage bill in the past year.