A consortium led by David Low has been in talks with Sir Tom Farmer seeking to purchase Hibernian Football Club. The story has been embargoed for a few weeks, but David agreed to speak to TSFM to give us an exclusive interview and provide us with information about his intentions for the Edinburgh club.
Highlights of the interview include the similarities and differences between the Hibs situation and the one he found at Celtic Pak in 1994; how Scottish Football’s “new level playing field” as Low calls it has created an opportunity for a club like Hibs to be the main challenger to Celtic for honours; the contrast of his consortium’s approach to that of the recent debacle at Ibrox; the role of the fans at every level of the club; the future of Allan Stubbs and Leanne Dempster; and the journey back to the Premiership.
Low is frank about his reputation as a well-known Celtic fan, but highlights his Hibbee credentials and his affection for the club, eschewing the “I was always a Hibbee” line taken by so many people seeking to ingratiate themselves with the locals at various clubs.
Certainly, the experience and finance rolling around Low’s consortium is something that any club could do with, but the fans are crucial to their involvement and interest.
He says he won’t go ahead with the purchase unless the fans are behind them.
“Fans have never been so powerful as they are today, especially with the advent of social media like TSFM”
“We have seen in recent years what a body of fans are capable of when they re together”
“We want to have that togetherness at Hibs, because the only way forward is to have trust between the boardroom and the fans, you only have to look at the levels of distrust between board and fans at Rangers to see that it is a recipe for disaster”
The RIFC share offer.
Right,enough already.Our football authorities now have to call time on this comedy show. RIFC have no money and no possibility of getting any. No more last,last,last,last chance.Shut them down and let the rest of Scottish football get on with it.
Kicker Conspiracy says:
August 29, 2014 at 8:30 am
1 0 Rate This
“The Company announces that it will raise up to £4 million (before fees and expenses)”
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Would much actually be left after fees and expenses, if last time is anything to go by?
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I will be surprised if fees and expenses come to less than £500k. That’s why London house prices are so high.
This issue is an act of total desperation. £4million is the maximum they are allowed to raise without a full prospectus under EU directives. What I fail to understand is this. They admit that £4m is nowhere near enough, and they will be back for at least £20m later in the year. Would it not be cheaper to try to raise the full £25m now? And if they couldn’t get £10m from the institutions a few weeks ago ( http://www.bbc.co.uk/sport/0/football/28678687 ) on what basis do they expect those same institutions to come up with £20m later this year? The City boys have been badly burnt once, and they are clearly not lining up for another roasting now.
John Clark says:
August 29, 2014 at 8:16 am
The share offer.
‘If the aggregate level of subscription is less than 15,000,000 New Ordinary Shares the Open Offer will not proceed and subscription monies will be returned to applicants. Should this occur, the Company will be unable to pay its creditors as they fall due and the future of the Company will be uncertain; The Directors will immediately have to seek emergency financing which may or may not be available.’
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Is this the beginning of the end that has been carefully plotted by , for example, Laxey Partners? A fine show of willingness to keep going, but ready to smile ruefully when no one else is sufficiently willing to invest? ” We did our best but…”
=========================================
It passes through my mind that if the offer isn’t fully subscribed then that gives a cast-iron excuse for using Ibrox and MP as security for a loan or indeed to be sold.
It also let’s Wallace and other like-minded Board members walk away with semi-clean hands although I have the feeling they would rather delay the final solution on Ibrox and MP until after the big share issue. How can you go for the BIG issue if the RIFC doesn’t control its major assets – indeed its only real assets.
But how can they reach the Big Issue stage with the piddling amount of cash which will be raised by the current offer – it will be disappear in the blink of an eye. So that’s why I believe the assets have to be secured in ‘safe hands’ before the next admin/liquidation.
I think that no matter how understanding anyone handling an administration is they will need to be very careful that everything is handled in accordance with legal requirements.
Also I note some Bears are taking comfort that they only need to raise some £3.6 million net to keep going. I’m seriously beginning to think there is no hope for them. However, once again! Rangers can only raise a max of £4 million gross without issuing a detailed prospectus which would create an inescapable hostage to fortune IMO.
Wonder when Imran will be back in court ❓
neepheid says:
August 29, 2014 at 8:28am
The fabric of society must be treated differently from “ordinary” member clubs, we all know that now, so the response of the SFA/SPFL will be interesting indeed.
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Yes indeed 🙄
However I now begin to view the VB campaign as possibly early warning shots across the bows of the Footbal Authorities that if they take any ‘real’ action that the dirt will be dished on senior officials.
I have no doubt that dirt exists and who knows what it is – it might actually have nothing much to do with football. So I doubt that we will see any action whatsoever.
And then, of course, the politicans on every side will keep quiet as no one wants to lose a single Referendum vote. What an utter unprincipled shambles the Establishment Club has created.
Kicker Conspiracy says:
August 29, 2014 at 8:30 am
“The Company announces that it will raise up to £4 million (before fees and expenses)”
————————————————
Would much actually be left after fees and expenses, if last time is anything to go by?
============
According to the announcement, expected net proceeds are £3.6m.
“And now over to Ibrox Park Glasgow for the story that keeps on giving” – as heard on XFM during a news report the other night. Next they will be describing it as an omnishambles…
This is less a share issue than a ransom note.
The Bears have to realise: keep on paying and the spivs will keep on coming back for more.
I should have mentioned earlier that I am, in the interest of balance and fairness, awaiting the upbeat analysis of Neil Patey on the lunchtime news just to confirm that I’ve got it right 😆
If I was his employer I think I’d be telling him to sit this one out ❗
Let’s just remember a slice of what Neil told the BBC on 14 February 2013 – a year after Rangers entered administration:
I always think the best advice anyone can give to someone who wants to gamble in the AIM Casino is: DYOR – Do Your Own Research and also be prepared to kiss goodbye to every penny you gamble. 🙁
“If the aggregate level of subscription is less than 15,000,000 New Ordinary Shares the Open Offer will not proceed and subscription monies will be returned to applicants. Should this occur, the Company will be unable to pay its creditors as they fall due and the future of the Company will be uncertain; The Directors will immediately have to seek emergency financing which may or may not be available.”
Furthermore:
“Assuming full subscription, the Company will require additional external funding in the latter half of the current financial year in order to meet working capital requirements as a result of the cyclical nature of its business. At the minimum level of subscription additional working capital will be required towards the end of the current calendar year. This funding, could be sourced from lines of credit, other forms of short term finance or as a component of a further equity raise, in line with the strategy identified in the Business Review to re-build and re-establish Rangers as a stable, sustainable and successful business. There can be no certainty that such funding will be available on commercial terms or at all. Failure to secure such funding would be damaging to the business and may impair the value of the Ordinary Shares. The Open Offer is not underwritten. There can be no certainty as to the aggregate level of subscription for New Ordinary Shares.”
Typical lots to pour over on a day when I have work coming out my ears.
So £4.258m in the bank but can’t touch the Retail money. Oh that nice Mr Ashley!
Therefore at end of June £1.538m in accessible cash which is really the Letham and Easdales loan.
Lets say 1st team operating costs £6m/annum so £500k per month.
Historical ‘other’ operating expenses £14m/annum, even if magically they have been reduced to say £10m/annum that’s £830k. So lets say £1.350m per month when combined.
We are now at the end of August so July and August expenditure = ££2.7m or the equivalent of the Retail hold back. That’s leaves £1.5m in the bank which as discussed is owed to the Letham and Easdales.
Cost will be higher now we are into the season, win bonuses increments, travel costs etc.
The only thing keeping them going is the pay as you goes, sponsorship /corporates and the goodwill of Messrs Letham & Easdale.
Also I note that the Offer is not being underwritten, is that why it is termed ‘Open’.
Seems no one with any sense is willing to back this flagging horse.
IMHO it is all touch and go stuff and I believe we will see this Wonga Loan type situation continue as the aim is scraping through to the Premiership. Unless those on the inside pull the plug properly there will always be someone around that will throw in the odd million just to keep them afloat.
PS
I wonder if someone has had a ‘sit down’ with Alistair and told him he can have a day on the golf course on Sunday while the transfer window closes.
Danish Pastry says:
August 29, 2014 at 8:27 am
‘..That’s a very ominious quote JC, jumped out at me too. But how do Laxey, or any proper investor benefit? .’
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It does kind of jump out at one, doesn’t it? I suppose better informed folk will say that an ‘if’ like that is fairly normal and possibly required by the Stock exchange, but certainly frightens the horses, it’s so stark and explicit.Who, reading that, would think of investing?
Asset-strippers normally make sure they own the assets.LP might be entirely satisfied that there will be no valid legal challenge to their majority stake in the principal assets, and are ready to play a longer game of something other than football!
But not having the kind of mind that these kinds of guys have, I can’t work out what their expected gains overall would be unless they are relying on commercial redevelopment of the site(s). Perhaps they have an ‘in’ with Glasgow City Council and the other local authority. 😀
Re Share Issue
To me, the most interesting information is the update of the cash position at 30th June. The balance stood at 4.258 million, but 2.72 million relates to Rangers Retail and can’t be touched, leaving only 1.538 available. To me, this suggest that Phil’s comments about the season ticket proceed being out of bounds looks incorrect – the had spent some of before 30th June, let alone by the end of August. Given July and August outgoings will have been incurred (if not actually paid yet), the cash balance must be virtually depleted to zero. They need the share issue to get through September wages, pay VAT on season tickets and have any hope of paying back any of the loans due. If the minimum share subscription amount in not met they are goners. Now, what will the SFA/SPFL response be to this dire news?
During September and October TRFC have only two home league matches, so lots of travelling expenses to incur and very little additional income. They have also postponed the home tie against East Fife which would have been held on a Saturday and will now be held sometime midweek probably producing an expense rather than income due to reduced attendance
PPS
So the minimum required is 15m shares at 20p =£3m and that’s to get to the end of December, or £1m a month over and above any other monies they have accounted for as coming in via pay as you go, sponsorship etc.
The league season finishes on 2nd May but players contracts usually go beyond that.
So they will need another £4m at least, possibly £6m to see the season out?
Therefore are we saying that to keep this club going for a season they are still needing ‘subsidised’ to the tune of £10m per annum.
If that is the case then how are they going to up the quality of the squad? An increase in season ticket prices for the premiership will only make a dent in the subsidy the club clearly requires. Replacing aging strikers and club captains will eat into the rest of any additional income and its back to square one.
I note Phil Mac has a blog up saying that the season ticket strike has contributed greatly to the woes.
Do we know how many season tickets were sold because surely the difference in non renewals and then pay as you goes only gives us a figure of a few million.
Therefore even if sales had been on par with last season that only means that the requirement for further cash to see out this season might have been delayed by a few months.
In some ways far better to be asking for money now when the outcome of performances on the pitch is uncertain rather than find, by off chance, they may have sputtered to third spot around Christmas.
@wottpi – the item at the stock exchange indicates “around 23000” season books sold
Here’s another thought. When Mr Letham made his £1m loan, he said he would not mind being repaid by converting the loan and interest into shares. Let’s say RIFC take him up on this offer. That would give the Open Offer, one third of the required minimum, but improving the cash balance not one iota.
On 30 June, RIFC had access to £1.5m only. Walk up ticket sales on match days might have raised another £1m at a stretch. Matchday retail, maybe the same again. However, there have been two paydays since then at £1.3m each so less than £0.5m left. Deduct any costs relating to travelling which will notbe much as they have mostly been at home during the league/cups. That leaves very little.
Did they have ANY expenses during the Highland and North American tours? It’s hard to imagine the Highland tour being paid for entirely by other people although the american tour might have been.
I would suggest that this issue is required to meet the September wages. If they can convert the Letham loan into shares, I think this share issue will get them to November. No further.
I see that the suspension on trading in the shares of Worthington Group was lifted this morning and they’ve jumped by 300%+ so far today. IIRC they still have an interest in Craig Whyte’s claim on Ibrox and Murray Park. I wonder if they will pursue that?
Gym Trainer says:
August 29, 2014 at 10:16 am
Thanks.
Therefore last year it was 33k, so 33-23 = 10k x £300 = £3m missing from the balance sheet which equals the minimum required amount for the open offer to proceed.
Therefore they still would have been asking for more cash at Christmas.
Others have noted the caveat over the clumpany remaining a going concern should the share issue uptake be insufficient.
The fact that no-one has been prepared to underwrite the issue to me is also telling. A kind of financial litmus test.
Clearly there is no overwhelming support or appetite for the share issue amongst existing shareholders.
Having now made the situation crystal clear in an official announcement to the Stock Exchange there can be no grounds whatsoever for the SFA/SPFL claiming not to know that one of their clubs, by their own admission, is on the brink of insolvency. Hopes of staving this off are pinned on an injection of funds next month, in no way guaranteed and acknowledged as a short-term fix, and a further massive injection later in this year which on past performance is surely fanciful.
There can now be no excuse for the SFA/SPFL. They must immediately secure guarantees from RIFC/TRFC that they will be able to fulfill their fixtures for this season.
Scottish Football needs a strong SFA/SPFL.
So RIFC PLC are seeking to raise a net amount of £3.6M, of which at least £1.5M will be used to repay existing debt. That will leave £2.1M maximum available to loan to TFRC Ltd to cover that loss making company’s ongoing cash-flow requirements.
The going concern warning highlighted above by other posters was hidden away in the small print to a certain extant, but it shines bright to anyone being asked to part with cash to continue subsidising the group.
As PMGB has reiterated on several occasions, those onerous contracts will not go away. There is a race on here, not just to raise cash to keep the show on the road, but to get the auditors to sign off the accounts. The annual accounts need to be filed at Companies House by 31 December, so the sand is racing through the egg timer.
I cannot see how they can stabilise TRFC Ltd sufficiently in that time to prevent a qualified audit report due a fundamental uncertainty over going concern due to an insolvent and loss making subsidiary. The debt owed by TRFC Ltd to RIFC PLC surely must exceed the total assets of the subsidiary, and adding a further £2.1M to that can only worsen that ratio.
By setting the rights issue at 20p, they will force down the share price as the value of the group will not increase as there will in effect be a debt for equity swap as the Leatham/Easdale facilities will be repaid from the proceeds. The effect on the PLC balance sheet will be to increase the share premium account, whilst reducing current liabilities by £1.5M and increasing cash by £2.1M. That cash will then be immediately loaned to the subsidiary, thus increasing a debt from a subsidiary that must be considered doubtful. The overall value of the group will be unchanged as that £2.1M will go through the revenue account and weaken the TRFC balance sheet further. Accumulated group losses will in due course increase by the amount of the loan.
I hope that Mr Ahmed and his advisers are monitoring the situation, as I can’t see how an application for ring fencing can be refused given that the PLC itself has provided the necessary evidence of doubt over going concern.
Regarding the going concern issue, the acountants will seek assurances from the doirectos as to the going concern status of the company as a normal matter of course. That is done for all company accounts, whether audited or not. However, the period under consideration remains as twleve months from the date that the directors approve the financial statements. Hence, my point at the start about it being a race. Within the group, TFRC Ltd is in effect insolvent. However, that company can be considered a going concern if the holding company (in proper terms, not fantasy MSM terms) has confirmed that it will support the subsidiary for the relevant period.
Therefore, RIFC PLC have only a few months to get that in place, so we are now looking at a period to end of August 2015. By the time the rights issue has been done, the relevant period will run to September 2015. That of course, takes us into next season, and I don’t think that the auditors would accept vague assurances about where TRFC will be playing next season and the riches that will bestow upon the group.
If the rights issue is unsuccessful, there is no way that they could return to the market for a full blown open offer, so they must be looking at delisting as a serious fall back position. History is littered with examples of football PLCs that have been delisted for various reasons. I suspect that we may be seeing another very soon.
Sorry about the rambling nature of the above, but I had a Magnus Magnusson moment, and I had to finish what I started.
Over on the share sites it looks like the waters are being tested for the share price dropping. Currently looking like 23p.
As someone has asked – if it dips below 20p on the open market why would you take up the latest offer?
melbournedee says:
August 29, 2014 at 9:40 am
‘… If the minimum share subscription amount in not met they are goners. Now, what will the SFA/SPFL response be to this dire news?’
——-
And that, melbournedee, is the truly critical question.
There cannot be a club chairman or board who is not this very minute having to try to map out how they will stand if ( and it is still only an ‘if’) TRFC/RIFCplc goes belly up, like the old RFC(IL).
In particular, they will be anxiously asking their club secretaries to brief them on what the current rules say about ‘insolvency events’ and the penalties associated with such events. And whether, in the event that TRFC/RIFCplc suffers such an event, the fact that TRFC have been treated as old Rangers when that was to their advantageous,they should also be treated as old Rangers and be deemed to have suffered a second insolvency event.
They will be very aware that any attempt to:
favour TRFC/RIFCplc
or shield them from the full penalties properly due,
or to strike any wee secret deals with any version of a Charles Green ‘asset purchaser’ or ‘Rangers 2014’ or any new ‘Sevco X applicant’, or any such nonsense
will be tantamount to committing slow hari-kari.
Integrity in sport will be the watchword, or Scottish Football withers on the vine.
(I haven’t seen what the gentlemen, and occasionally ladies, of the SMSM have to say thus far.But I don’t think I’ll be terribly surprised)
Morning all,
So the much anticipated share issue is upon us.I’m sure the figures will be picked to death.
Here’s my take on some of it.
Firstly,they need this cash within 2 weeks.
Then they hope to raise more before the end of the year,which brings me to this;
“Assuming full subscription, the Company will require additional external funding in the latter half of the current financial year in order to meet working capital requirements as a result of the cyclical nature of its business. At the minimum level of subscription additional working capital will be required towards the end of the current calendar year”
They’re saying that if only the minimum amount are sold they will need to raise extra finance this year over and above any second share issue.The difference between minimum and maximum uptake is only around 500k.As most clubs make most of their income in the 1st half of the season,this seems unlikely.
I can’t see many fans who bought the minimum last time buying again.If they do then they’ll get around 240 shares.What does it cost to process 48 quid?.
Fag packet time.
At the AGM the board had approx 69% of the vote to dissallow pre-emption rights.That’s around 45m shares.If this issue is taken up in full then 75% will equate to approx 63m shares.
What I think I’m saying is,to get to 75%,the board,spivs,whoever will by and large need to buy the whole issue.
Surely the best way to as good as guarantee reaching 75% would have been to underwrite the whole issue?.
I guess my summary having read all your excellent analysis would be:
1/ First and foremost, the most culpable of all – That this should happen 3 games into the season is an absolute travesty, yet another travesty in fact in a disappointing series (a bit like Die hard 2,3,& 4!), for our authorities. Its not March. This is not a giant fallen on hard times. It is not a consequence of something unforeseen – stadium flooded or that type of thing. It is an absolutely predictable series of events that had an inevitable conclusion unless they hung their hats on a share issue. What? No plan B? At all? As others have said, I wonder what Livingston have to say about that?
2) For the club itself. As others have said. Had this been the shake-up we all suspected it was this would now be the big (and only)issue with whichever sugar daddy is in favour this hour riding in on his charger to the rescue, up the marble stairs (if they’re still there) and into bear immortality. Its not. Its a Wonga crisis loan application to the AIM, because Wonga have turned them down. This is, frankly, pathetic.
For the absence of doubt, of course, we all know the shake up the bears would be ‘sold’ was actually a sugardaddy arriving to fund working capital going forwards, to pay a rent and to own precisely nothing.
3) I actually feel sorry for the bears this morning. Albeit its a situation that was completely avoidable had they seen through the façade, I fear they are now damned if they do, but that’s the best offer they’re going to get.
Sevco basket case bandwagon rolls on. £4m (before fees & exps) to pay off Letham & Easdale. But then they’ll need more cash or they can’t pay creditors. I assume that means they can’t fulfill fixtures either. SFA should be sued by other clubs for even giving them a license. The silly fans who bought season tickets under false pretenses should also sue the SFA. #scandalous
On Record circulation collapse it’s worth reading an obit on the last great Daily Record editor by Greenslade at:
http://www.theguardian.com/media/greenslade/2014/aug/27/daily-record-scotland
Vickers was a giant of a man in newspaper terms – with some very interesting/amusing peccadilloes that were kept firmly in-house. He was followed by a mouse of a man – aka The Forfar Bridie – who did Maxwell’s bidding which in the end set in train the paper’s destruction as the Voice of Scotland which was finally achieved by a procession of English Editors.
Don’t get me wrong Vickers was English too but he knew his readership – his countrymen that followed IMO didn’t care about the readership or circulation as the new accountancy ‘buzz-word’ was the ‘bottom line’ which didn’t need increased sales to generate annual profit increases and resultant bonuses.
Of course eventually there are no assets left to sell and no more staff can be cut or turned into ‘interns’ to subvert the minimum wage let alone a living wage.
As to ‘online audiences’ increasing well is that individual subscribers or just clicks from angry punters responding to deliberately inflammatory stories – many of a sports nature.
I am yet to be convinced these dinosaurs of the print media can successfully achieve a financially profitable online transformation and it won’t be long before some major collapses occur IMO.
My reading of the AIM statement is that this issue is just a stop gap measure to raise emergency funding to get them through to the AGM. The time scales are so tight that the whole issue has to be completed within two weeks.
The club appears to have £1.5M of free cash, the same amount that is due to Easdale and Letham as of Monday. I’d expect that Letham will get his cash back (or a proportion of it) and that Easdale will do a deal that will give him more shares.
At the AGM, assuming that the spivs take up their options, they will have sufficient votes to disapply pre-exemption rights for a future share issue. They are talking about raising £20M-£30M over the next 3 years. That is a hell of a lot of shares to shift and will marginalise all other shareholders (standard Spiv tactics?).
I can see this charade going down the Portsmouth route with rounds of share issues, loans secured on Ibrox and Murray Park, new owners with little interest in the football club etc. The only attraction can be the property assets. This will end in tears.
From their last full year accounts to June 2013, Brian Stockbridge made the statement “At June 30 2013, the Club had £11.2 million cash at bank, with only £4.5m of this representing season ticket renewals.”
It is not clear if the current cash total of £4.26M includes ST money received before the end of June 2014. If it does, then they are in an even worse state than I thought. If we are comparing like with like, then the cash burn rate was £7M over the last year or approx £600K a month. What we don’t know is the amount of debt that has been accumulated over that period, e.g VAT, bonuses etc., as alluded to by PMGB. That info should come out of the accounts which should be published within the next 6 weeks or so.
If bills have been accumulating then the cash burn rate will be higher than the £600K a month, i.e. bad news for a “going concern” sign off by Deloittes.
I noticed some earlier comments about Legia’s UEFA display and have just seen a pic – trouble ahead for them again methinks.
https://twitter.com/MoarFootball/status/505070382219788288/photo/1
Every thinking bear needs to ask him/her self the question (24 months too late but there you go) Why would anyone lend £1 (never mind £12m) to a club (don’t start) so clearly and visibly haemorrhaging cash. They must see the golden gates of the CL are simply unobtainable just now. Precisely where does the loan repayment/dividend come from. If they answer that to themselves honestly, then they will be some way towards fixing the problem.
My 24 months comment wasn’t intended to be facetious by the way. Had they asked that same question re return on investment two years ago they would have stopped the train dead in its tracks, with cash in the bank (if not quite as much as they thought they had). Now accepting the inevitable truth might still only reveal that there is no solution.
Is this rights issue another extension of the spending other people’s money ethos brought forward from Murray/BoS and Wattienomics?
The fact that the rights issue is not underwritten would suggest that none of the incumbents intend to spend a penny of the own and the bears that were mugged by Mr Green’s big ‘ands on the IPO are very very unlikely to get fooled yet again (surely not??). That leaves Laxey Partners, our publicity shy friends Margarita and Blue Pitch, and assorted other institutional investors to stump up to keep the lights on and keep the onerous contract gravy train (sorry, I meant journey to the top making many friends along the way) on the rails.
Will they oblige?
Giovanni says:
August 29, 2014 at 10:20 am
‘I see that the suspension on trading in the shares of Worthington Group was lifted this morning and they’ve jumped by 300%+ so far today. IIRC they still have an interest in Craig Whyte’s claim on Ibrox and Murray Park. I wonder if they will pursue that?
——–
I suppose if we don’t ask we won’t be told. Might not be told even if we do ask, but, what the hell..My email to Worthington
“To
dougware@worthingtongroupplc.co.uk
Today at 11:13 AM
Dear Mr Ware,
The statement this morning issued by RIFC plc in introducing an open offer for shares makes pretty startling reading.
I wonder whether you would care to say whether Worthington are to press ahead with their action to establish SEVCO 5088’s claim on the assets of RIFC plc, given that there seems to a distinct possibility of an insolvency event in the event that the RIFC plc share offer is not extensively taken up?
Yours sincerely,
( own name: I forgot to switch to my JC email address!)
And, as if to prove my point I copy the following from the open offer statement;
“If the Club continues to progress to the top flight of Scottish football it will have the opportunity to benefit from increased attendances, increased ticket prices, access to prize monies from European competition and new commercial partnerships.”
1/ Progress to the top flight – not guaranteed by a long chalk
2/ Increased attendances – no, not when you had 40,000 to see East Fife and see where that has gotten you. Slightly increased process granted but the effect will be muted.
3/ Prize monies from Europe – See Celtic and Arsenal (very nearly)
4/ Commercial Partnerships – Like Ashley you mean? (and yes I accept this is still their trump card over every team in Scotland).
Difficult times.
Interesting day. I wonder what terms the benefactor got for ensuring the BASIC wages got paid? This will be loan, not a gift I suspect, so that’s another slice of the £4M accounted for surely?
An accountancy lecturer, years ago, would talk about firms on the slide, riding a Cresta Run, with a “Death Curve” at the bottom, if they made the curve, they would make it, otherwise….
Are we approaching Douglas’ Death Curve” I wonder?
The CoplandRoad.Org site gives a fair summation of the share offer
http://www.thecoplandroad.org/2014/08/groundhog-day-board-calls-for-another.html
I note that Super Salary wasn’t happy about being asked about the share issue at today’s pre match press conference.
I wonder if any journo will be brave enough to ask him if he will be taking up his entitlement to buy another 300,000 or so shares.
Taking up the offer would cost him around £60K, which is pretty poor value when compared to the £10K he paid for his current shareholding of 1M shares (that assumes that he hasn’t cashed in on the 1M shares previously)
A refreshingly frank review from the CRO there. I would take issue (no pun) with one point. 25% of the business is not “essentially” up for grabs per se. If the existing shareholders all take up the offer then the business is just £4m bigger with everyone holding the same amount of shares in it. It is only with what would be eye catching flexibility re the Excess Application feature that 25% would be up for grabs. And as is said above, if that is the intention why only 25%?
You would think the existing Investor block would purchase enough to ensure their 75% voting rights are achieved. The rest of the shares would then just be to pay for the hay to feed their racehorses as they leave.
Ally’s pre match press conference. He’s not a happy chappie any more. He just wants respect.
http://sport.stv.tv/football/clubs/rangers/290070-rangers-will-not-be-able-to-pay-creditors-if-4m-share-offering-fails/
Smugas says: August 29, 2014 at 12:06 pm
….. if that is the intention why only 25%?
=================================
Under EU rules they can only raise up to €5M without issuing a prospectus, hence the £4M ceiling equating to 25% or so.
The can’t afford to go to the expense of producing a prospectus because they are skint, and it would also mean that more of their dirty linen would have to be made public.
This all takes me back to Hearts share issue in December 2012 (which raised over £1M from fans), but was doomed to ultimately fail as the money raised was only enough to scrape through to the end of the season when the club eventually succumbed to the weight of their debts and went into administration.
If they genuinely wanted to raise the money why have they not sold any players?
I know theres not a lot of value in most of them with the exception of maybe Wallace but there are several who would easily raise 300k plus each so by selling Wallace and 5 or 6 players they could have brought in the best part of 3 million.
This is not going to happen, its just part of the plan (well the latest plan!)
Can someone answer a query please?
There was mention somewhere earlier of the Letham/Easdale facilities potentially being repaid by a debt/equity conversion.
Do the directors actually have the power to do that? I was under the impression that the motion to disapply pre-emption rights was not carried at the last AGM, so they would not be able to do a debt/equity swap even if both parties (company/lender) wanted to, as it remains ultra vires.
If my understanding is correct, that means that either £1.5M proceeds of the rights issue must go to repay those loans or a new facility would be negotiated. Given the going concern warning, the terms would not be as generous as even those of the Laxey facility that was superceded by that nice Mr Letham’s offer.
The are plenty of suggestions made on other sites that simply are not possible due to Companies Acts/Taxes Acts/AIM regulations, which are not as malleable as the rules governing Scottish football. Is the debt/equity swap another red herring?
In short, can a debt/equity swap actually happen?
easyJambo says:
August 29, 2014 at 11:45 am
‘…Groundhog Day: The Board Calls for Another Share Issue ‘
———-
Where were the Peter Ewarts of the then RFC support three years ago? How did they sleepwalk into the whole farcical mess that SDM landed that club in? How could they not see how false were the promises made by the CG and every succeeding board of the new club? How could they have let themselves be led to the economic abattoir like sheep ( mature sheep, the succulent lambs had already been fed to those journalists who might have, ought to have, rung the alarm bells).
RFC was the club of the business establishment ( certainly of the Glasgow business establishment). Why were the business brains so dulled and unfocussed? Like the captain of the Titanic, did they simply not believe their vessel could be holed below the waterline?
I still find their passivity entirely astonishing.
Once again it is back to the Dragon’s Den scenario of investors not putting up their children’s inheritance to fund the repayment of loans and to cover running costs.
People with real money and no attachment to the club from Govan have a whole range of other products and investment vehicles that are more likely to give them a return.
The only folk that want/need to get involved are those already in the quicksand. Given their track records Laxey and Ashley must be the ones that are favourite for working their way to finding a piece of ground that keeps their head above the surface at the end of the day. At some point the rest will have to accept their fate.
spanishcelt says:
August 29, 2014 at 12:18 pm
On the day Falkirk sold on Conor McGrandles to Norwich for around a £1m I too thought that we would have seen one or two players getting pushed out the door.
However that would be admitting defeat and not in keeping with maintaining the squad they have.
Scapaflow wrote
“..An accountancy lecturer, years ago, would talk about firms on the slide, riding a Cresta Run, with a “Death Curve” at the bottom, if they made the curve, they would make it, otherwise….
Are we approaching Douglas’ Death Curve” I wonder?”
Yes and no. The effect of an equity injection is to effectively push you back up the hill onto the steeper part of the cresta run. All you can do is hope that as you start to descend once more, (and perhaps be pushed back up again and again) that someone at the death curve is doing something to smooth it out, you know, like cutting losses, trimming cloth, cutting bonuses perhaps? That kind of thing.
As any grandparent that’s taken the kids sledging will tell you, simply pushing them back up the hill again and again does not lead to long term peace!
Just as an aside anyone seen sight of the rangers ‘Away’ strip that was due to be launched in July?
http://www.footyheadlines.com/2014/05/new–glasgow-rangers-14-15-kit.html
Seems its only a Goalies kit that is available. The Red strip is said to be their ‘Third’ Strip.
UEFA requires that 1st 2nd and other strips are registered before the a start of competition but I can’t find a similar SPFL rule.
Not sure if they have played in a second strip as yet but why would a club that is hard up not try to cash in on issuing the replica second strip. If delayed unti later in the years by the time Christmas comes fans will be getting asked to stump up for the next round of Wonga dosh.
Maybe Mr Ashley and Puma have something to say on the matter?
McGrandles was a special case as Gary Holt was manager at Falkirk before becoming coach at Norwich City in the summer. Thus, he had day to day knowledge of the lad off the pitch, which makes it far less of a gamble for the buying club. I’m looking forward to seeing him progress to full internationalist during his stay at Norwich.
///////////////////////////////////////////
wottpi says:
August 29, 2014 at 12:26 pm
spanishcelt says:
August 29, 2014 at 12:18 pm
On the day Falkirk sold on Conor McGrandles to Norwich for around a £1m I too thought that we would have seen one or two players getting pushed out the door.
However that would be admitting defeat and not in keeping with maintaining the squad they have.
Am I the only one still unclear if the ST monies are included in the 4m in the bank at end July? If not, surely a successful open offer plus the release of the ST monies (going concern notice issued on the back of the offer) gets them to the end of the season, no?
So did someone as when Neil Patsy was going to be asked for a comment?
RetroScot @RetroScot 10m
Football Finance Expert Neil Patey talks to Connor Gillies about Sevco Share Issue
http://goo.gl/E092Qa
Remember the QOTS fans had complained that their ticket allocation for Ibrox was reduced due to ‘security concerns’?
Seems like they couldn’y shift even the reduced amount.
http://www.qosfc.com/new_newsview.aspx?newsid=2456
Smugas says: August 29, 2014 at 12:53 pm
Am I the only one still unclear if the ST monies are included in the 4m in the bank at end July? If not, surely a successful open offer plus the release of the ST monies (going concern notice issued on the back of the offer) gets them to the end of the season, no?
==============================
You are not the only one.
Taken from my earlier post.
From their last full year accounts to June 2013, Brian Stockbridge made the statement “At June 30 2013, the Club had £11.2 million cash at bank, with only £4.5m of this representing season ticket renewals.”
It is not clear if the current cash total of £4.26M includes ST money received before the end of June 2014
There was some talk about the possibility of a cup-tie between Celtic and TRFC. If in the near future such an event is scheduled, and the match is to be played at Ibrox, will the Police Scotland restrictions regarding the allocation of tickets to away fans still apply?
The Cat NR1 says:
August 29, 2014 at 12:19 pm
Hi Cat. It was me who mentioned the debt/share swap. The shares cannot be assigned to Mr Letham straight off, but the board have declared the ability for shareholders to buy more than their current shareholding permits (0.3 shares per share held) where excess shares are not bought. Therefore Mr Letham need only apply for 5,750,000 shares in total and, assuming that number are left unsubscribed he can then be allocated them as part of the extended offer.
e-mail sent to SFA (Darryl Breoadfoot).
Good afternoon Darryl,
What is the SFA’s backstop plan for fixture chaos when the latest version of Rangers hits the buffers?
This Rangers version, in little over 18 months, has spent circa £70 Million to win 2 part time leagues. They have to pay back large loans (by Monday), raise £4 Million for operation costs to keep the lights on until Christmas………..when another £6 Million will be required.
Surely Mr. Ogilvie must break his silence……before, not after, the event?
http://sport.stv.tv/football/clubs/rangers/290070-rangers-will-not-be-able-to-pay-creditors-if-4m-share-offering-fails/
Regards
EJ,
That’s the bit I don’t understand (although that is nothing new!). In publicising this as just such a crisis measure, are they not pushing the going concern notice, and thus access to the ST funds further away?
The Cat NR1 says:
August 29, 2014 at 12:50 pm
I know the background but it still shows that young Scottish players in the Championship can be valued at £1m by an English club. Even if the Holt connection helped the deal it is still a hefty sum even at half the price.
It is of course a special case being that Ally (I want respect) McCoist will never get near an English Championship club as a coach.
WOW!! Quick or whit? 😯
From: Darryl Broadfoot [mailto:Darryl.Broadfoot@scottishfa.co.uk]
Sent: 29 August 2014 13:27
To: John Subject: Re: There may be trouble ahead
Hi, we don’t arrange fixtures. I trust you meant this for the SPFL. Thanks.
I reply:
Good afternoon,
Don’t you govern the game? Ensure fiscal and financial prudence/governance of member clubs etc?
Regards
causaludendi says:
August 29, 2014 at 4:04 am
“which album do you consider to be the ‘crossover’? Meddle?”
——————————–
In retrospect I think these margins are recognisable and I’d agree with you but if you had been watching the unravelling development I think it would have been a difficult boundary to perceive.
I was only interested in the successful output as a youth and older but now I have returned to listen to the experiments. It was the willingness to think the unthinkable that provided them with the ammunition they used so effectively later in their career. All those musical tricks and flicks were practised away from the public view and they seemed to arrive as a completed product.
I have a built in mechanism that wishes to challenge convention. That is what convention is for in my opinion. I remember playing one of my few 11 a side games and the coach told me, as striker, to ‘sit’ on the opposition sweeper. This is probably a well worn and successful tactic but my instinct was that I should stand anywhere but beside an opposition player. This may have been my naivety but I would have liked to have the opportunity to make a fool om myself and possibly learn something in the process.
There is a built in instinct that we must conform to conventions. If you fail conventionally then no blame is doled out but if you fail using novel tactics then you are immediately made to feel foolish. I understand that there is a human necessity to be part of the tribe but if you are looking for new strategies then you need to be allowed to fail at a time when doing so will not be catastrophic; that is when you are young and your endeavours have not so much riding on them.
Cheers Scott
Well spotted.
In effect then, he’s potentially underwriting the issue to the tune of his loan facility, albeit without any upfront obligation to do that. I hadn’t picked that possibility up. I was concentrating on a separate transaction that was a straight debt/equity swap. It would have the same net cash effect within the group if done as part of the rights issue. I’m sure he’d much much rather have full take up by others and get his cash safely back in the bank.
//////////////////////////////////////////
scottc says:
August 29, 2014 at 1:21 pm
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The Cat NR1 says:
August 29, 2014 at 12:19 pm
Hi Cat. It was me who mentioned the debt/share swap. The shares cannot be assigned to Mr Letham straight off, but the board have declared the ability for shareholders to buy more than their current shareholding permits (0.3 shares per share held) where excess shares are not bought. Therefore Mr Letham need only apply for 5,750,000 shares in total and, assuming that number are left unsubscribed he can then be allocated them as part of the extended offer.
Some numbers re the shortfall in ST revenue.
2012/13
Number of season tickets sold 38,228 (from full year accounts)
Season ticket sales (£’000s) 8,056
Average season ticket price (£) 210 (net of VAT)
2013/14
Number of season tickets sold 35,000 (estimate from interims)
Season ticket sales (£’000s) 7,350
Average season ticket price (£) 210 (prices frozen)
2014/15
Number of season tickets sold 23,000 (from AIM statement)
Season ticket sales (£’000s) 5,681
Average season ticket price (£) 247 (assumes average increase of 18%)
Based on the above figures there is a revenue shortfall of £1.67M when compared to last season or £2.96M had they been able to retain the last season’s ST numbers at this season’s higher prices.
A proportion of the shortfall will come from (diminishing) walk up sales, but the fact that today’s offer, if taken up in full, will only see them through to the end of the year, is confirmation that the problems go much deeper than reduced ST sales. i.e. even with ST sales numbers holding up, they would still be out with the begging bowl.
Meddle, definitely. I saw them at Stirling University in ’71. Any other TSFMers there?
Meanwhile, the Sevco imbroglio. My team, Alloa, are due to play them, next month, and on another three occasions this season. We will take the pitch with a team of players whose wages we can afford, as we have been doing since 1878. They, it seems, expect to field a team whose wages are out of their league, as they have been doing since 2012. The lower leagues have been cheated out of two seasons, and a third is now underway. Hats off to the first journo who points this out. I will then eat mine. The authorities’ complicity was ensured the day they let that lot into the sport, before they had played a game, and on the back of financial plans your dog could have seen through. They will cling on until the end: they have given themselves no alternative. Hopefully, we get out of this what all on here seem to desire, but the those at the top are unwilling to sanction: an honest game.
The more I think about it the more I expect Imran to be in the Court of Session PDQ.
From the BBC on 7 May 2014 the last time he got refused:
Perhaps Imran making a move is part of a plan but the other thing I don’t get is surely every single business trading with Ibrox has to go straight to a cash-only mode ASAP. OK some might be a bit chary about court action for current debts in case that collapses Rangers and they end-up with nothing.
But others IMO will fire-in and try to get their hands on some cash and if their amount isn’t too big then they may well get paid.
I doubt that many smaller suppliers will be that worried about future contracts with a company that once again appears to be on the edge of extinction. And I’m sure HMRC will be checking their situation very very carefully.
Wrt player sales,Phil had info a couple of months back that an agent in England had been hired to sell 5 players,wallace,Law and Templeton were 3 but I can’t remember the other 2.The target was a total of £2m net.Also,another 5 were to go for free if need be to save on wages.
There was also a rumour that some rangers minded folk in England were trying to sabotage any deals.
If any players are going,I’d suggest it’ll be on Sunday or MondayAnd the fees will be next to nothing.
Anyone who didn’t know TRFC are skint knows now.
Someone on LSE saying that the change of beer supplier (to Heineken) is because of a debt to the previous supplier of £600k. Obviously we don’t know if that is accurate but, if it is, I would expect that company to be instigating court proceeding tout de suite. WUO springs to mind
nowoldandgrumpy says:
August 29, 2014 at 1:02 pm
So did someone as when Neil Patsy was going to be asked for a comment?
RetroScot @RetroScot 10m
Football Finance Expert Neil Patey talks to Connor Gillies about Sevco Share Issue http://goo.gl/E092Qa
===================================
I mentioned earlier I couldn’t wait till lunchtime to hear Patey’s upbeat spin and I see I wasn’t disappointed.
The guy is a PR comedian 😆
easyJambo says:
August 29, 2014 at 11:45 am
The CoplandRoad.Org site gives a fair summation of the share offer
http://www.thecoplandroad.org/2014/08/groundhog-day-board-calls-for-another.html
Groundhog Day: The Board Calls for Another Share Issue
By Peter Ewart | Contributor
The Rangers Board released a statement in regards to a potential share issue in RIFC plc on the 6th of August and today we have the details…..
….What is the deadline?
Time is very short: If they choose to subscribe the deadline for shareholders to have all their paperwork/monies sorted out is within a fortnight (12 September). I am sure we all will but there is little point in going back over the wasted money and spent opportunity of the last two years.
Fans will ultimately pay for all of it (in every sense) in the long run, but let’s be honest: We knew that anyway. It’s now a matter of how we get a meaningful say, and how quickly, for the hard earned money we spend. Each shareholder must look forward and decide how best to give the whole Club the overhaul it badly needs.
========================================================================
It struck me that whilst this is a reasonably fair piece Peter Ewart still doesn’t seem to grasp the financial crisis looming – a crisis which is evidenced by the urgent need to have the share issue produce further funds within a fortnight with further massive funding to be sought just some months hence. Any sensible person would be asking just where this will come from. Are they depending on Santa Claus?
To then continue that “It’s now a matter of how we get a meaningful say, and how quickly, for the hard earned money we spend.” smacks of complete delusion. The ST boycott has brought things to a head though only by some months I suspect and the very idea that fans will have any meaningful say in what now happens is ludicrous. That boat has long sailed.
What is likely now is one last death convulsion with assets being transferred to the parent company in lieu of debt and the football club being “saved” by being sold to Real Rangers Men© for £1 plus whatever onerous contracts and leases they can impose.
Any fans, or other shareholders for that matter, who are not recipients of revenue from those onerous contracts would be crazy to ‘invest’ now (donate is probably a better word).
If they do ‘invest’ then they really are just a bunch of succulent lambs being led to the slaughter and evidence that an Independent Scotland needs to prioritise education and basic arithmetic.
Scottish Football needs strong action to be taken by the SFA/SPFL – this is not the time to abdicate responsibility.
scottc says:
August 29, 2014 at 2:20 pm
I saw that as well but think it is people taking Phil Macs blogs joining dots and then adding 2 plus 2 to make seven.
As I have pointed out before folks are more than happy to jump on every rumour and piece of gossip int he hope that the club at Govan will fail.
There is no doubt there are financial woes but how they end up playing out is anyone guess.
It certainly looks like a case of history repeating itself.
Easyjambo has put together a nice summary of what I was getting at earlier in that even if season tickets are ‘top dollar’ and at the 40k mark the cost of running the club still appear to be far too high.
They were far too high when the Oldco needed to adopt tax avoidance scheme, share issues, property revaluations, bank debt etc to keep the show on the road.
They were far too high when Mr Green and his cohorts came in and they remain far too high even with Wallace and Nash at the helm who by all accounts are trying to sort the mess out albeit there appears to be very little outward sign of major cost cutting/
It really is only a matter of time before someone starts proceedings somewhere.
As an aside just wondering where any Commonwealth games and SFA rent money gets factored in?
Presumably if they still think they will need a further injection the end of the year the £3m any additional monies such as the above have been accounted for as going out the door as soon as it comes in.
Bawsman says:
August 29, 2014 at 1:35 pm
WOW!! Quick or whit? 😯
From: Darryl Broadfoot [mailto:Darryl.Broadfoot@scottishfa.co.uk]
Sent: 29 August 2014 13:27
To: John Subject: Re: There may be trouble ahead
Hi, we don’t arrange fixtures. I trust you meant this for the SPFL. Thanks.
Bawsman says:
August 29, 2014 at 1:36 pm
I reply:
Good afternoon,
Don’t you govern the game? Ensure fiscal and financial prudence/governance of member clubs etc?
Regards
======================================================================
How about following up with asking what assurances have been given by RIFC with regard to the Scotland v Georgia game going ahead if the Open Offer does not raise the required minimum £3m by mid September, three to four weeks before the match, given the Company itself says in such circumstances the future is uncertain.
That’s is surely within Darryl’s and the SFA’s remit.
Indeed WOTTPI, it is a lot of money, but he had already featured in 80 odd first team games and he’s still only 18, which is impressive for a player that would be expected to be on the end of a few agricultural challenges (called genuine attempts to get the ball on Sportscene). Holt must be confident that he can make the handle the move on a personal and professional level.
James MacArthur (£500K) & James McCarthy (£1.2M) from Hamilton Accies have proved to be good signings and I hope that McGrandles can follow suit. Likewise, Gauld and Robertson following their recent moves.
However, for every MacArthur or McCarthy, there will be a David Goodwiilie or Danny Wilson
Time will tell if £1M is a bargain or a poor investment, but that deal has secured Falkirk’s future for a while and hopefully he has inspired some of their other youngsters to follow suit.
/////////////////////////////////
wottpi says:
August 29, 2014 at 1:31 pm
The Cat NR1 says:
August 29, 2014 at 12:50 pm
I know the background but it still shows that young Scottish players in the Championship can be valued at £1m by an English club. Even if the Holt connection helped the deal it is still a hefty sum even at half the price.
It is of course a special case being that Ally (I want respect) McCoist will never get near an English Championship club as a coach.
It was posted on here (or RTC) at the time, but I’m struck when reading again the analysis by Bill Millar’s advisor Jon Pritchett, published in Forbes in August 2012, at how prophetic it was. His conclusion particularly catches the eye:
“Rangers is a peculiar club in many ways.
It reminds me of “Solo George”, the last surviving tortoise of its kind on the Galapagos Islands. Steadily growing older and becoming slower, fatter and lonelier until the inevitable.
In order to ensure that its fate does not follow that of “Solo George,” Rangers need a business strategy worthy of its status, worthy of its fan base and worthy of its history. It needs a sea change, and fast.
If Charles Green is not willing to face the fans, explain the economics and risk the torrent of abuse that will follow in the short term, then Rangers will find themselves shortly back in the same place.
Green must embrace change, cut back and then reshape the business plan, invest on a long term basis by accepting short term failure in order to remain relevant.
Like any insolvent business, Rangers needs to cut costs, reign in salaries, demand better quality commercial revenues and build a business that is lean, profitable and produces attractive, vibrant, talented players that, over time, will take it back into European football. It needs to spend no more than 50% of all revenues on player salaries (probably much less) and in the meantime it needs to work the “Old Firm” brand hard to fully exploit what that brand can mean on its (and Celtic’s) balance sheet and ensure that sponsorships are actually additive to cash-flow.
Most importantly, all of Rangers Nation needs to understand that the time has come for change. The soldiers on the battlefield are dying. The glories of the past, while spectacular and worthy of celebration and remembrance, are not going to ensure future success. The future marches on. Rangers should not only be a part of that future, they should be influencing it through their bold actions. However, until bold action is taken, the future for Rangers remains in serious jeopardy.”
If this was clear to Bill Millar then, surely it must be obvious to anyone asked to pour another £4m down the drain now?
http://www.forbes.com/sites/sportsmoney/2012/10/08/what-can-we-learn-from-the-financial-meltdown-of-glasgow-rangers-fc/
May I say, as my first post on this thread, but having read every post to date, that the quality of the posts in relation to the proposed “Share Offer” has surpassed all in the history of this glorious blog.
I will repeat Allyjambo’s (?) comment: “It will all end in tears”
Finally, I will add that had such information been so freely available at the time of my CA final exams, I should have won the Institute’s Gold Medal.
Many thanks to all…and I feel a contribution to TSFM funds coming on…!
Bawsman says:
August 29, 2014 at 1:35 pm
‘.WOW!! Quick or whit.’
——-
Likewise!
here is the email reply I got from Worthington at 2.35pm:
“Dear Mr —
Doug Ware has passed your email on to me to reply. As you’ll see from the announcements the Rangers claim is only part of our portfolio and our strategy for dealing with each claim is confidential.
Kind regards,
( HL , media)”
I don’t know what ‘announcements’ were meant.I’m not aware of any very recent one by Worthington, or of any issued today.Have I missed something?
Anyway full marks for the readiness on Worthington’s part to reply to queries.Presumably they didn’t need me to tell them of the share offer.I suppose firms with law suits against other firms must watch them like a hawk on a daily basis ( or are the lawyer chappies obliged to notify the opposition legal parties?)
redlichtie says: August 29, 2014 at 2:26 pm
It struck me that whilst this is a reasonably fair piece Peter Ewart still doesn’t seem to grasp the financial crisis looming
============================
I read his piece differently. I think he does get it.
The bit that is missing is openly admitting to, and stating, the obvious, i.e. the only way for the fans to get the influence and control they desire is to let the club go into administration, then get the fans united with a common purpose and financial backing to wrest the club from the spivs.
Regarding wrongful trading.
Maybe time to mention this again.
s214 of the Insolvency Act 1986 says broadly that if there is no reasonable prospect of a company avoiding liquidation and the directors do not take every step with a view to minimising loss to creditors in a subsequent insolvency then the directors may be personally liable to contribute to the shortfall to creditors in that insolvency.
So as at today, the Board are saying – if we do not get £3m in from this share issue (which is not underwritten) – we need to get emergency funding (and we are not sure that we can get that) – then we will be unable to pay our debts as and when they fall due (i.e. they will be cashflow insolvent.)
Whether or not the directors are currently wrongfully trading (and thus risking personal liability) will depend upon (at least) the following:-
1 what credible assurances they have had that shareholders will buy shares (and in what amounts). Such an assurance is not “underwriting” by the way.
2 what credible indications of emergency funding (and in what amounts) they have had from possible lenders. A “yes – we would maybe think about lending some cash later if it were needed because the share issue fell short” would not be sufficient to constitute a defence to wrongful trading proceedings if an insolvency event duly occurs.