Jump to content

Takeover / New Investment - What Rumours Have You Heard?


Recommended Posts

  • Replies 8.9k
  • Created
  • Last Reply
1 minute ago, BP1960 said:

 

What does this boil down to in your opinion Dave?

 

Anyone's guess to be honest. It clearly isn't about raising new money. If it relates to the shares that FLG say they are buying then the filing has been made very late. It's a significant slug of shares so the best hope of finding out who owns them would be either the trust gaining a view of the share register or through the required submission of a Persons with Significant Control return which must disclose the identity of anyone holding more than 25%.

Link to comment
Share on other sites

1ZAG7dRS_bigger.jpgwebdarren @webdarren
FollowingFollowing @webdarren
More
Replying to @StuBobs1976

When AL has put money into the club, he’s done it via a “Directors Loan” and this is basically converting that into shares in the club and frees it of that burden. It is a decent show of commitment to the club in my opinion.

7:11 PM - 12 Nov 2019
Link to comment
Share on other sites

24 minutes ago, LaticMark said:
1ZAG7dRS_bigger.jpgwebdarren @webdarren
FollowingFollowing @webdarren
More
Replying to @StuBobs1976

When AL has put money into the club, he’s done it via a “Directors Loan” and this is basically converting that into shares in the club and frees it of that burden. It is a decent show of commitment to the club in my opinion.

7:11 PM - 12 Nov 2019

 

I'm confused, thought he was putting his own money into the club..now it's a 'Directors Loan'?

Link to comment
Share on other sites

2.6 Cash Injections – Significant cash injections from companies or benefactors must be evidenced by a bank receipt or statement to show funds have been credited to the Club’s bank account. Before being included in the Club’s SCMP Submission, a signed Letter of Guarantee (in accordance with Appendix D) must also be received by The League to confirm that there is no interest linked to the donation or any requirement for future repayment of the injection by the Club.

 

2.7 Equity Injections – Only include non-redeemable equity investments received in the relevant period. The conversion of debt to equity does not constitute a form of revenue as no cash injection is provided to the Club to finance wages in the future. Further, any linked transactions whereby loans are repaid followed by a cash injection in exchange for equity, will not be allowed. All equity cash injections must be evidenced by a bank receipt or statement to show funds have been credited to the Club’s bank account. Before being included in the Club’s SCMP Submission, a copy of the signed Companies House forms confirming the issue of new share capital must also be received by The League.

 

https://www.efl.com/-more/governance/efl-rules--regulations/appendix-5---financial-fair-play-regulations/

Link to comment
Share on other sites

10 minutes ago, BP1960 said:

 

I'm confused, thought he was putting his own money into the club..now it's a 'Directors Loan'?

It is his money. He’s just converted a loan - meaning he might want it back one day. Into shares - meaning he has given the club the money and the club doesn’t owe him the loan anymore. 
 

That’s my cod accountancy take anyway. 😁

Link to comment
Share on other sites

5 hours ago, League one forever said:

It is his money. He’s just converted a loan - meaning he might want it back one day. Into shares - meaning he has given the club the money and the club doesn’t owe him the loan anymore. 
 

That’s my cod accountancy take anyway. 😁

If that's the case that's good. The alternative view is that by doing so he has significantly watered down the %age of shares that the FLG are buying represents. Whatever they are. 

 

That seems quite a plausible motive to me. The usual reason for converting loans to equity , and not an unreasonable one, is to give the lender a greater equity stake and therefore some value for the loans and the possibility of recovering that value, or some of it, in the event of the sale of the business or its return to health and ability to pay dividends. 

 

If he owned 97% before and still owned 97% after the share issue there'd be nothing gained and the loans may just as well have been written off. 

 

So my poorly informed conclusion would be that he has effectively written off debt, which is good, but there are no clues as to how much debt and whether there remains any outstanding.  In the meantime the shares which FLG are buying are reduced, probably significantly so, in terms of the share of the company they represent. That may mean they fall below an important percentage level but I don't know that. 

 

All conjecture. 

Link to comment
Share on other sites

7 hours ago, LaticMark said:
1ZAG7dRS_bigger.jpgwebdarren @webdarren
FollowingFollowing @webdarren
More
Replying to @StuBobs1976

When AL has put money into the club, he’s done it via a “Directors Loan” and this is basically converting that into shares in the club and frees it of that burden. It is a decent show of commitment to the club in my opinion.

7:11 PM - 12 Nov 2019

 

You can invest money into a business via directors loans and it not effect the shareholding in the business.

Link to comment
Share on other sites

14 minutes ago, GlossopLatic said:

 

You can invest money into a business via directors loans and it not effect the shareholding in the business.

You can't really call a loan an investment when the business is definitively loss making and the prospect of a return on the loan is minimal. Most loans carry interest rates, I can't imagine these did. 

Link to comment
Share on other sites

2 hours ago, Dave_Og said:

If that's the case that's good. The alternative view is that by doing so he has significantly watered down the %age of shares that the FLG are buying represents. Whatever they are. 

 

That seems quite a plausible motive to me. The usual reason for converting loans to equity , and not an unreasonable one, is to give the lender a greater equity stake and therefore some value for the loans and the possibility of recovering that value, or some of it, in the event of the sale of the business or its return to health and ability to pay dividends. 

 

If he owned 97% before and still owned 97% after the share issue there'd be nothing gained and the loans may just as well have been written off. 

 

So my poorly informed conclusion would be that he has effectively written off debt, which is good, but there are no clues as to how much debt and whether there remains any outstanding.  In the meantime the shares which FLG are buying are reduced, probably significantly so, in terms of the share of the company they represent. That may mean they fall below an important percentage level but I don't know that. 

 

All conjecture. 


Yep, if that’s the case.... it’s a counter-FLG motivated move. Maybe he wouldn’t have written off loans had the FLG not announced they were buying shares from somewhere (most likely the Necarcu debenture as far as I’m concerned). Either way, if true, it’s only a good thing. Kieran McGuire says it’s only £20k though. Darren says it’s more and he’s reported back to the trust. Would be good to hear from the Trust sooner rather than later on the topic. This, unlike PTB, is what they are there for.

Link to comment
Share on other sites

55 minutes ago, lookersstandandy said:


Yep, if that’s the case.... it’s a counter-FLG motivated move. Maybe he wouldn’t have written off loans had the FLG not announced they were buying shares from somewhere (most likely the Necarcu debenture as far as I’m concerned). Either way, if true, it’s only a good thing. Kieran McGuire says it’s only £20k though. Darren says it’s more and he’s reported back to the trust. Would be good to hear from the Trust sooner rather than later on the topic. This, unlike PTB, is what they are there for.


Maguire has made a rather rudimentary mistake there.  Interesting. 
 

Anyhow, if this is indeed a director loan converted to shares we have to admit that can only be a good thing for the club. 

Link to comment
Share on other sites

27 minutes ago, kowenicki said:


Maguire has made a rather rudimentary mistake there.  Interesting. 
 

Anyhow, if this is indeed a director loan converted to shares we have to admit that can only be a good thing for the club. 


Has he? 20,000 shares valued at £1 each.

 

Yes. Any debt write off is good. The motive for it seems personally motivated and not for the benevolence of the club though.

Link to comment
Share on other sites

I think this is very obviously an attempt to reduce the voting rights of any shares purchased by the FLG.  Call it a debt write off if you want, but the fact the Trust has been given shares which keep their share of the total at 3% would tend to argue against it being a simple debt write off.

 

I suspect the majority share holder has forced a share issue and paid for them at £1 per share and as a thank you to the trust for their support, has given them 597 more B shares.  End result = the FLG now own a very nominal number of shares.

 

Clever?  Probably, but unlikely to benefit the club much.

Link to comment
Share on other sites

There's no need to create new shares to write off Directors loans is there? It's usually a sweetener where the club is owned by multiple people including shareholding Directors, who agree not to get their cash back in return for owning a larger % of the total*. It's shenanigans when it's the 97%ish owner massively diluting the shares to pay off an immaterial amount of debt.

 

* As The Rangers have done a couple of times recently to keep the lights on**

 

** Sorry Ackey

Link to comment
Share on other sites

11 hours ago, League one forever said:

It is his money. He’s just converted a loan - meaning he might want it back one day. Into shares - meaning he has given the club the money and the club doesn’t owe him the loan anymore. 
 

That’s my cod accountancy take anyway. 😁

 

He might want it back one day sounds ominous.

Link to comment
Share on other sites

8 minutes ago, Dave_Og said:

That’s when it was a loan. From that perspective this is a better position for the club to be in. Whether there are other loans is the pertinent question 

 

We thought the club was in a good position when AL arrived. Do you mean it's better now?

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.


×
×
  • Create New...