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Kilmarnock: stormy annual meeting in store for chairman Michael Johnston

THE short-term news, at least, was positive for Kilmarnock yesterday.

Rugby Park was valued at £11.5m in the last accounts

The club agreed a payment plan with Braehead Foods over an outstanding bill to avert a winding-up order but the long-term off-field future of the Rugby Park side remains cloudy.

Rather than the League Cup, which currently resides in the trophy cabinet, the row with one of the Park Hotel's main suppliers will set the tone for a potentially stormy annual meeting at the Ayrshire club tomorrow, the latest hand grenade in a running sore between chairman – and solitary director – Michael Johnston, and a section of shareholders and spectators.

While Craig Stevenson, the owner of Braehead Foods, confirmed the outstanding balance would be received today – "It was never about the money, I just wanted them to call me back – Johnston told Herald Sport the disputed sum in question was £4000 rather than £16,000, and spoke of his disappointment that a "routine business matter" had become public, and that it could dominate proceedings tomorrow.

"There usually are tough questions at our agm and I don't expect this will be different," said Johnston. "It is disappointing an occasion which should be positive, where we are celebrating a league cup win, home and away wins against Rangers, and first win at Parkhead since 1955, all these landmark events for the club could be overshadowed by other events."

Since taking over in 2005, Johnston's position has been a source of intrigue. In no particular order, fans have been angered by his lack of a personal fortune to take the club forward – although personal guarantees relating to the £9.84m debt are still in place thanks to former owner Jamie Moffat – the fact he draws a salary, the club's abstention on the fate of Rangers this summer, even his reluctance to entertain offers for the club, possibly even as recently as the last couple of months. Johnston, however, denies that any formal takeover proposal, "beyond the talking stage", has ever been made.

"I am not aware of any credible plan from any supporters group to take over," Johnston said. "And no-one has come forward with any formal proposal. I have spoken to a number of people since I took over who have expressed an interest in having a major stake in the club or taking it over and I have treated all of these approaches the same way – provided information, given them ample information, treated their approaches in confidence and so far no-one has taken the matter any further, beyond the talking stage.

"The club has improved its financial position so we are heading in the right direction, albeit slowly. There is no greater cause for concern now than there was in 2005 and we have been able to reduce debt significantly since that time."

What makes matters cloudier still is the presence of the Park Hotel, constructed above budget courtesy of a loan in excess of £6m from HBOS which has yet to be repaid. A four-star hotel with conference and banqueting facilities, this was envisaged as a means to maximise non-matchday revenue but it has never generated reliable profit. Although some car park space was sold recently for flats and the latest accounts put the value of Rugby Park at a total cost of £11.5m, with most estimating the hotel's market value in the £2m-£3m range, it may currently be unsellable.

"It is an integral part of the club and it would be extremely difficult to separate the hotel from the club, given the proximity and the shared access routes etc," said Johnston. "But it does have to be remembered that the bulk of the debt comes from the investment in the hotel. This is not debt which has been run up by over-adventurous football expenditure, it has been invested in bricks and mortar.

"The problem is that due to the downturn in the general economy, particularly in East Ayrshire and Kilmarnock, it is a tough market for a four-star hotel to operate. Trading hasn't been at the level we would like and the pricing structure we have to adopt is not in line with four-star hotels in Glasgow."

"The Braehead Foods story has been blown out of proportion," said Barry Richmond, chairman of the Killie Trust. "I find it amazing that the media ran with the £16,000 story, not the £9m debt the club has been struggling with for years. The bank must have virtually written it off, because no way in this planet they are going to get back what they are owed.

"There was definitely a bid in for the club, I spoke to the person who put it in. And his [Johnston's] words were that it wasn't attractive."

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