Michael Johnston has agreed to stand down as chairman of Kilmarnock after the Rugby Park side yesterday completed a landmark deal to clear its £9m debt.

The local lawyer, who has become an increasingly controversial figure at the club, will leave his post by the end of the season, but remain as a director, under a three-pronged agreement with the Bank of Scotland.

Under the deal, haulage tycoon Billy Bowie will purchase the balance of the bank's debt and convert it into equity, a move which will push Johnston's 87% stake below 50% and leave no single investor with a controlling interest. At the same time, the Park Hotel adjacent to the club's Rugby Park ground will be sold at market value, while former chairman Jamie Moffat will permanently write off the balance of his soft loans to the club, which had totalled £1.8m.

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A new board of directors, including new investors Billy Bowie, Jim Mann, David Moran and Russell Smith will be formed, with Johnston retaining his seat, while the bank also insisted upon the formation of a new 11-man Community Engagement Board to work alongside it. This grouping will include two elected season-ticket holders and Kilmarnock's four leading politicians - the MP, the MSP, and the leader and opposition leader of East Ayrshire Council. One of the eleven will be appointed to the main board, and a more detailed announcement will be made early next week, along with a date for the club's agm.