The Day I was on the Scotland U-23 Bench

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I see that the BBC is reporting that Whyte has …

Comment on The Day I was on the Scotland U-23 Bench by easyJambo.

I see that the BBC is reporting that Whyte has pleaded not guilty to the two charges he faces.  I thought that pleas were covered by the reporting restrictions but hey ho.

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The Day I was on the Scotland U-23 Bench
Smugas January 13, 2017 at 13:25
I’m pleased to see that you have correctly interpreted what I posted about Hearts.

When Hearts went into administration in June 2013 it was announced that 14 staff and 4 players would be made redundant. As it turned out the 14 staff and just three players were made redundant, i.e. John Sutton and two youth players.  Three other players, Jamie Hamill, Jamie MacDonald and Kevin McHattie all accepted wage cuts and remained at the club for the following season. 

A number of other players who were out of contract at the end of season 2012/13 did not have their contracts renewed. These included Andy Driver, Andy Webster, Marius Zalikusas, Arvydas Novikovas, Darren Barr, Danny Grainger and Medhi Taouil.

The Day I was on the Scotland U-23 Bench
Smugas January 13, 2017 at 09:29  
Thanks HP.  Appreciate the technical input and measured tones (see Herald yesterday for comparison!).
Could I request – Could one of the jambo lads provide some context also?  Did the Anne Budge consortium (apologies for simplistic terminology) buy over Romanov’s company post admin (in the same way Whyte bought out Murray in 2011 minus the admin obviously) or is the “owner and operator” (Budge) now a completely new company operating the same club?  (warned you it was simplistic!) 
Just so I can fully get my head round the difference!
The Hearts situation is as follows:

Heart of Midlothian Plc is the “Club” which trades as Heart of Midlothian FC (“Hearts”)

Ann Budge formed a company called Bidco (1874) Ltd of which she is the sole shareholder.  She personally funded her company to provide a loan to Heart of Midlothian Plc of £2.4M which was used to meet the primary CVA requirements of releasing the securities over Tynecastle and other Hearts assets which were held by Vlad’s banking arm, Ukio Bankas, to whom Hearts owed £15M. Ukio Bankas was the only party who received anything money from the CVA pot. 

Separately Bidco purchased the 79% of Heart of Midlothian Plc shares held by Vlad’s main holding company UBIG and Ukio Bankas for £100,000.  Hearts also owed UBIG £8M.

Bidco was then obliged under takeover rules to offer to buy all remaining shares in the company, and is now the major shareholder in Heart of Midlothian Plc with approx 88.5% of the shares in issue.  Bidco is effectively Hearts holding company.

In May 2014, the Foundation of Hearts (8000+ fans currently donating around £125,000 a month) entered an agreement with Bidco to fund the club’s initial working capital needs and then for a further two years, handing over £4.05M in the process.  It was then planned that the FOH funds would be used to pay off the £2.4M Bidco loan, then purchase 75.1% of the club’s shares for a further £100,000.  Had that plan been followed through, then ownership would have passed to the fans by the end of this year.

However in May 2016 Bidco and FOH agreed a change to the plan, in that two years worth of funds (£3M) from donations would be used to help fund the new main stand, before repaying the Bidco loan.  That will put the timetable for Fan Ownership out to the end of 2019 assuming fan contributions are maintained as current levels.  In return Bidco has agreed to transfer 20% of the shares in the club to FOH once £1.5M of the stand funding has been reached (April/May 2017) and a further 15% when the £3M target is reached (April/May 2018).  The remaining 40.1% will be handed over once the original loan is repaid in full. 

The Day I was on the Scotland U-23 Bench
scottc January 12, 2017 at 17:58
The more the merrier. It is always useful if one or more of us can’t make it. e.g. JC is still in Oz.

I should have added that it is Lord Bannatyne, who has presided over the Fraudco criminal hearings, who will be hearing the arguments next week..

Recent Comments by easyJambo

It Is Better To Offer No Excuse Than A Bad One
Allyjambo January 2, 2018 at 14:38
My one overriding memory of the Ibrox disaster was that of the five schoolkids aged between 13 and 15, all from the village of Markinch in Fife, who lost their lives.  I lived just a few miles away and was only 15 myself, at the time.

I remember those losses having a huge impact on the local Fife schools and communities.   

It Is Better To Offer No Excuse Than A Bad One
HOMUNCULUS DECEMBER 28, 2017 at 15:38
It doesn’t matter if it is paid to a trust or your aunt Agatha, you still have to pay the tax. I have no idea why they use the name Agatha, but they do. 
“Aunt Agatha” was used by the RFC QC Andrew Thornhill during the appeals process when discussing the redirection of earnings to a third party.

On a separate point about the share price.  The sale of Ashley’s shares to Club 1872 and Julian Wolhardt was used by King’s QC at the CoS, as an example of shares trading above the 20p price.

The TOP’s QC, however, countered that by claiming that Ashley wasn’t interested in the share price, but was insistent that he received £2m for his shares. To that end, it was pointed out that the price per share paid wasn’t 27p, 27.5p or 28p, but something to the second or third decimal place that ensured that the sum received was not £1,999,999 but a fraction over the £2m figure.  I can’t recall the exact fraction used, but the counter argument put forward seemed entirely plausible.

It Is Better To Offer No Excuse Than A Bad One
Homunculus December 27, 2017 at 22:39
EASYJAMBO DECEMBER 27, 2017 at 22:32
Is there a way of calculating how the issue of new shares reduces the value of the existing ones, or is it not as simple as that. I don’t imagine for a second it is. 
I cannot believe that the sale of new shares does not effect the value of those held by existing shareholders. That would surely be market capitalisation gone mad. 
It’s not as simple as the share price being reduced inversely proportionate to the number of additional shares issued.

The capital value (no of shares x share price) of the club is presently around £16m at 20p a share (80m x 20p), but given that the club also has £16m of debts, you could argue that a debt free club would be worth £32m (or 40p a share).

The value of the shares going forward would depend of the amount of debt written off and the number of shares issued in order to achieve that. e.g. if they double the number of shares to 160m in exchange for writing off half the debt.  The capital value of the club might go up to £24m, as it only has £8m debt, but the value of each shares would probably fall to 15p. (160m x 15p = £24m)

If however, they manage to double the share numbers, write off half the debt, but also raise £4m in new money, then the capital value of the club should go up by £4m (the new money). So you could see the capital value rise to £28m, but still with £8m debt. The share price might then be 17.5p (160m x 17.5p = £28m)

I hope that makes sense. It does to me, but the nuances of share numbers, to debt, to capital raised can easily be lost, if you don’t have an appreciation of where they are at just now, and where they might end up.

It Is Better To Offer No Excuse Than A Bad One
shug December 27, 2017 at 22:05
Great hard fought match tonight.
Sadly, that was two hours of my life I won’t get back.  There was nothing great about it and it was more of a borefest akin to many derbies of yesteryear.  Tom English described it perfectly as “Thud and Blunder”

It Is Better To Offer No Excuse Than A Bad One
Homunculus December 27, 2017 at 18:21
I take it all that has happened is that they passed the resolution allowing them to issue new shares. Those new shares have now been created.
This is them simply notifying Companies House that they have done that, Companies House records show how many shares have been issued.
That has to be done before they can actually sell them to anyone.
Purely a procedural matter I would have though. 
It’s not got as far as creating the shares. It’s merely confirmation that the Board has the authority to issue shares up to the specified limit.  That authority expires on the date of the next AGM.

The allotment of up to a nominal value of £1,086,376.01, means that new shares equivalent to 1.333 times those currently available can now be issued.  I’m sure that there will be a good reason for the number of new shares being set at that specific level, but I can’t think of one. 

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