The company which operates the Ricoh Arena has been given a “net value of nil” by Coventry City Council - which owns a half stake in the stadium operating firm.

The Telegraph can reveal that Arena Coventry Ltd (ACL) - which operates the Ricoh Arena and is jointly owned by the Alan Edward Higgs Charity - has been valued at ‘nil’ by the local authority in its 2012/13 accounts.

However, the value of the company is, in reality, much higher and the valuation has been put down to the council balancing the company’s assets against an outstanding £14million loan to ACL.

The ongoing legal dispute between the owners of the football club and the council has also affected the ability to accurately value the stadium operating firm.

It is understood the charity will value its stake in ACL at £6.5million according to its latest set of accounts set to be filed this week.

That amount reflects the money invested by the charity in 2003 after it stepped in to purchase the football club’s share in ACL when the Sky Blues were unable to meet their financial commitments to the Ricoh Arena project.

A council official explained that ACL’s business plan, the prospect for regeneration around the venue and relationships with the football club and the Higgs charity all played a part in the council’s valuation.

He said: The value of ACL is dictated by an assessment of the revenues that the business can generate as a going concern on the market.

“This is affected by a range of complex matters including ACL’s existing business plan, relationships with and intentions of the Higgs Trust and the football club and any further proposals relating to surrounding development land owned by the council.

“These factors lead to significant uncertainty as to the valuation of the investment.

“A previous externally commissioned report on the value of the Arena’s assets has been used to inform the value of the Council’s investment in ACL within the Council’s 2012/13 accounts.

“Although the report indicated a positive overall value of the business, this was impaired to the same value of the loan in ACL’s accounts.

“In effect, the value of the business has been judged to be neutralised by the value of the outstanding loan and so taken together provide a net nil value.”

The valuation was carried out by the council’s Ricoh Arena investment vehicle, North Coventry Holdings, through auditors RSM Tenon. It has also been subject to the council’s own auditors Grant Thornton.

Officials from Coventry City owners Sisu recently insisted, during a High Court dispute with The Higgs Charity, they believed the charity’s stake in ACL to be worthless due to the company’s financial performance.

However recent accounts have shown ACL to be profitable and charity bosses insist nothing has changed which would cause them to re-evaluate the value of their investment in ACL.