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Page last updated at 16:54 GMT, Friday, 28 May 2010 17:54 UK

Debt-hit Hearts eye breaking even

Jim Jefferies and Sergejus Fedotovas
Fedotovas (right) says he and Jefferies have a good working relationship

By Brian McLauchlin

Hearts hope to break even within two years as they look to comply with new Europe-wide football rules concerning financial fair play.

The Edinburgh club are looking at ways of restructuring their £35m debt.

At the club's annual meeting on Friday, Hearts said they had switched some of their debt from bankers Ukio Bankas to their parent company, Ubig.

Hearts are also examining another debt-for-equity scheme, which involves turning debt into new shares.

But shareholders were told by chairman Sergejus Fedotovas that it would now be "very difficult" to implement their original plans to redevelop Tynecastle Stadium.

Hearts representatives will meet Edinburgh City Council next month and hope to announce a new plan in August regarding the development of the main stand.

I hope that early next week we will be able to announce our first signing and I look forward to adding one or two more after that

Hearts chairman
Sergejus Fedotovas

They also hope to announce their first new signing of the close season next week.

Former Hearts chairman George Foulkes, who has had his disagreements with owner Vladimir Romanov in the past, told BBC Scotland that he was "very encouraged" by what the club's board had to say at the Tynecastle meeting.

"They are getting to grips with the finances and it's also on an even keel on the football side," he said.

"The board know the difficult task in reducing the debt, but they are determined to be able to break even in two years and, by that, satisfying the new Uefa criteria on fair play.

"What came through is that the chairman is getting a greater grip on the running of the club.

"I think he is being given more authority by Vladimir Romanov on the running of the club, just as Jim Jefferies is being given more authority on the football side."

Uefa's new rules are designed to force clubs to operate within their means, with profligate clubs facing being banned from the Champions League and Europa League.

Clubs will only be able to spend what they themselves generate, with big cash injections from wealthy benefactors being restricted under the system that is unlikely to be imposed until the 2014-15 season at the earliest.

Hearts' accounts for the 12 months up to July showed that the club made a loss in excess of £8m, taking their debt to £35m.

However, Fedotovas told shareholders they were still making progress over new signings as manager Jim Jefferies bids to revamp his squad for next season.

"I am glad we have a good working relationship with the manager," said the director on Hearts' official website.

"We are on track to bring in new signings and I hope that early next week we will be able to announce our first signing.

"And I look forward to adding one or two more after that."

Jefferies has scope to bring players in after telling experienced players Christian Nade, Michael Stewart and Laryea Kingston that they would not be offered new contracts.

That followed a decision by Jose Goncalves to refuse a new contract and leave Hearts on a free transfer, a development that has further hardened the club's resolve to show more prudence in the transfer market.

"We have to take care the way we approach signings," said Fedotovas.

"We will still be spending on the squad, but the emphasis will be on the academy as you know what to expect from players who have been here for five and six years and have kept progressing.

"This is better than guessing what players will give you, even though this is done with the benefit of research.

"We have had to lose certain players, and certain managers in the past believed they would bring a positive result, but that didn't materialise.

"Working with the youngsters will be different, but Jim Jefferies is known for his expertise in this area."

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see also
Uefa threatens spendthrift clubs
27 May 10 |  Europe
Romanov approves Hearts targets
20 May 10 |  Hearts
Manager relaxed about Hearts debt
04 May 10 |  Hearts
Hearts see club debt rise to 35m
03 May 10 |  Hearts
Hearts positive on debt reduction
16 Feb 09 |  Hearts

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