Dons Set To Secure Multi Million Investment

[CityCentre]

DONS SET TO SECURE MULTI MILLION INVESTMENT

 

https://www.afc.co.uk/2019/06/07/dons-set-to-secure-multi-million-investment/

 

 

Change in company status sought to allow investment The Board of Aberdeen Football Club is seeking approval from shareholders to become a private limited company with the intention of securing further investment.

 

A circular is being issued to all shareholders today (Friday, June 7) outlining the reasons for changing from a public limited company to a private limited company. A vote on the proposal will be taken at a General Meeting on Tuesday, July 2.

Club chairman, Stewart Milne, said: “This change will facilitate investment in the Club by way of share subscription. This will allow a currently proposed investment of £2million to proceed and increase our ability to attract further investment in the future.”

 

The Board of AFC considers that this investment is necessary to meet the ambition and strategic objectives of the Club, both on and off the pitch. These include the successful delivery of the development at Kingsford which comprises two phases: the new professional and youth academy football training facilities and the community sports hub to be operated by Aberdeen FC Community Trust, and phase two: the new stadium.

 

Mr Milne said: “Share subscription has played a key part in raising funds for phase one and, along with other initiatives, will continue to play a big part in fundraising for the new stadium.”

 

As a public limited company, AFC is subject to Rule 9 of the City Code on Takeovers and Mergers. Rule 9 states that anyone who, together with associates, has shares which carry 30% or more of the voting rights in a public company has to make an offer to acquire all of the company’s issued equity shares.

 

Some of the proposed investors are unwilling to proceed while this Rule applies because they do not wish to be forced to make an offer for the entire equity share capital of AFC.

 

Mr Milne explained: “As a private limited company, this Rule will no longer apply, immediately unlocking £2million of investment. This will close the fundraising for phase one and allow the training facilities and community sports hub to be completed this autumn.

“Our ability to raise further funds by share subscription for phase two will be significantly enhanced by becoming a private limited company. It is the intention that both existing and new shareholders will be able to participate in the phase two share subscription.”

 

The Board believes these changes are in the best interests of the Club and its shareholders and is unanimously recommending shareholders to vote in favour of the resolutions proposed at the General Meeting.

The Circular sets out at length the relevant background, the detailed proposals, the consequences of the loss of protections provided by the City Code on Takeovers and Mergers, and the Board’s recommendation, and shareholders are encouraged to read it carefully.

 

[Tord31]

This is kind of a formality.

 

The shares are certainly not liquid at the moment.

 

Anyone that wants to 'cash-in' hopefully gets the chance before the 'de-list'.

 

Is this a pre-cursor to a share issue to raise some dosh? 

 

I really thought we'd hear word of a share issue long before now but its not been the case. The last share issue was around 2000 (not sure the right answer?) so theyve not went out with the real begging bowl for a generation now. Surely a few numpties can be parted from their cash.

 

Speaking of numpties.... I just opened a second DNA this morning.

[boboisared]

I see the usual doom and gloom mongerers are out on twitter complaining about this.

 

Some folk need to get a life. Or a ride.

[Studebaker-90]

What’s to complain about?

[King Street Loon]

What’s to complain about?

I'm sure someone will be along shortly to tell us.

[Tord31]

Usual crazies complaining about an inferred cost overrun on the training ground and the wording sort of inferring we need to vote this through to complete the project.

 

Looks like good news as far as I can see.

Might explain the term underwriting which has been used. Maybe the directors have put up loans earlier with the intention of converting these to equity when the time is appropriate. Fuck knows what the whole truth is but they seem to be claiming theyve got £12M which is the phase 1 value.

[minijc]

It's the fact that the £12m training ground has suddenly jumped to £14m.

[boboisared]

What’s to complain about?

Misleading headline

 

Not discussed in the extensive Cormack and Milne interview

 

Stitching up the small shareholders

[boboisared]

It's the fact that the £12m training ground has suddenly jumped to £14m.

Can't see that anywhere?

 

Phase one has been fully funded. I'm assuming this is part of the procedure.

 

Mr Milne said: “Share subscription has played a key part in raising funds for phase one and, along with other initiatives, will continue to play a big part in fundraising for the new stadium.”

 

Mr Milne explained: “As a private limited company, this Rule will no longer apply, immediately unlocking £2million of investment. This will close the fundraising for phase one and allow the training facilities and community sports hub to be completed this autumn.

 

That's what I got from those quotes.

[minijc]

Going back to a few weeks ago when they said the funding was secured for phase one, now they are on about getting another £2m to complete phase one, that's what I take from that.

[boboisared]

Going back to a few weeks ago when they said the funding was secured for phase one, now they are on about getting another £2m to complete phase one, that's what I take from that.

"

Some of the proposed investors are unwilling to proceed while this Rule applies because they do not wish to be forced to make an offer for the entire equity share capital of AFC."

[Proud Dandy]

Encouraging the amount of investment the club has attracted already, even paying for phase 1 would have seemed like a pipe dream a few years ago. Great to see the club going in the right direction off the pitch after so many years of the opposite.

[Tord31]

Going back to a few weeks ago when they said the funding was secured for phase one, now they are on about getting another £2m to complete phase one, that's what I take from that.

 

presumably this was part of the plan and the money was promised pending a way to circumvent the takeover rules. 

[Studebaker-90]

Sounds like risk mitigation from the current shareholders. Just covering themselves before they embark on such a large investment.

[Tord31]

Good to know that phase 1 does not rely on any McKenna, Fraser, Cosgrove or Ferguson monies.

 

Assuming we are not having the wool pulled over our eyes.

 

Also assuming we are not going to build the stadium for 2,3,4 years then no rush to sell any players

[boboisared]

Sounds like risk mitigation from the current shareholders. Just covering themselves before they embark on such a large investment.

Why apply critical thinking when you can just regurgitate other folks complaints?

[Betty Swallicks]

I thought we were told Phase 1 was fully funded a few weeks ago?

[RUL]

I assume it is a formality that this will go through due to the current share make up anyway? It's encouraging that we are attracting investment and that those investing don't want to takeover the club but are happy to invest.

[boboisared]

I thought we were told Phase 1 was fully funded a few weeks ago?

It was, obviously.

 

Did you read the full press release?

 

"Some of the proposed investors are unwilling to proceed while this Rule applies because they do not wish to be forced to make an offer for the entire equity share capital of AFC."

[Betty Swallicks]

It was, obviously.

 

Did you read the full press release?

 

"Some of the proposed investors are unwilling to proceed while this Rule applies because they do not wish to be forced to make an offer for the entire equity share capital of AFC."

 

So it wasn't really and still isn't then.

[Ernie McCracken]

I'm guessing if someone is going to pump £2million into the club, then they don't want to suddenly be obligated to find another £5million to buy everyone else's shares.

 

I.e. It's to avoid the Dave King scenario.

 

Seems fair enough to me.

[boboisared]

So it wasn't really and still isn't then.

If you want to take that approach then fire on.

[Betty Swallicks]

If you want to take that approach then fire on.

 

The factual approach?

 

ok, will do.

 

We were spun a lie then.

[Foster14]

I see that it says it has been a successful means of raising funds for phase 1 (authorised share capital was increased by 2m shares in December 18), and something that they will look to use for phase 2.  Seems a paper exercise to reduce the risk to any potential investor.

 

It can still be correct that they had the funding in place for phase 1 but didn't have it in the coffers.  It may have been agreed at a previous point, but this exercise was yet to be undertaken.  

 

Brilliant that they get accused of lying by being transparent and people moan about a measure that is designed to continue further investment in the club...

[Betty Swallicks]

I see that it says it has been a successful means of raising funds for phase 1 (authorised share capital was increased by 2m shares in December 18), and something that they will look to use for phase 2.  Seems a paper exercise to reduce the risk to any potential investor.

 

It can still be correct that they had the funding in place for phase 1 but didn't have it in the coffers.  It may have been agreed at a previous point, but this exercise was yet to be undertaken.  

 

Brilliant that they get accused of lying by being transparent and people moan about a measure that is designed to continue further investment in the club...

 

Saying the funding is in place weeks ago when it clearly wasn't is hardly being transpartent.

 

I'm not hugely fucked tbh as its par for the course, I was merely calling bullshit on yet another thing regarding Kingsford.

[Foster14]

Saying the funding is in place weeks ago when it clearly wasn't is hardly being transpartent.

 

I'm not hugely fucked tbh as its par for the course, I was merely calling bullshit on yet another thing regarding Kingsford.

 

 

It is complete nonsense to think that the cash has to be in the company at the time a statement is made saying that the funding is in place for phase 1, for it to be a truthful statment.  They could have:

 

- Loan or overdraft facilities agreed upon but not drawn down on.  (no point incurring interest before the cash is needed).

- Sponsorship deals agreed without the cash transferred.  (i.e. company sponsoring the name of it for £x is hardly going to transfer it over when half built).

- Investments from investors agreed but not yet formalised (awaiting a straightforward paper exercise and the necessity for the cash to be in the company).

 

All situations where you may not have the cash yet, but the funding is in place.  

[boboisared]

It is complete nonsense to think that the cash has to be in the company at the time a statement is made saying that the funding is in place for phase 1, for it to be a truthful statment.  They could have:

 

- Loan or overdraft facilities agreed upon but not drawn down on.  (no point incurring interest before the cash is needed).

- Sponsorship deals agreed without the cash transferred.  (i.e. company sponsoring the name of it for £x is hardly going to transfer it over when half built).

- Investments from investors agreed but not yet formalised (awaiting a straightforward paper exercise and the necessity for the cash to be in the company).

 

All situations where you may not have the cash yet, but the funding is in place.  

Happy to have my point backed by the likes of yourself

[Panda]

Going back to a few weeks ago when they said the funding was secured for phase one, now they are on about getting another £2m to complete phase one, that's what I take from that.

Yeh, what you took from it.

 

But like most things you say, everyone else can safely assume you're wrong.

[BWG]

I don't really understand enough about company types so someone can correct me if I am wrong. My understanding of this is that the investors who we have lined up don't want to have to then make an offer for the whole equity of AFC, which they would be obliged to do with a plc, so turning AFC into a private company negates that and makes us a much more agreeable company to invest in?

[Dom Sullivan]

I don't really understand enough about company types so someone can correct me if I am wrong. My understanding of this is that the investors who we have lined up don't want to have to then make an offer for the whole equity of AFC, which they would be obliged to do with a plc, so turning AFC into a private company negates that and makes us a much more agreeable company to invest in?

Pretty much