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| Chairman David Keyte With Several Board Members And Guest Ronnie Radford At Halifax Yesterday |
On Thursday shareholders will meet to discuss the latest share issue details. It's likely they will be approved partly because the board has been told they only need a minimum of over 50% of the votes received for the resolution(s) to be passed.
The directors, who between them own 7045 shares, 'intend to vote in favour'. Whilst it's uncertain how some of the other large shareholders will vote, HUISA are also expected to back the updated proposals.
The fact that the meeting is to be held on Thursday at 10.30am will probably help the board. Not every shareholder who attended the previous meeting will be able to attend because of work committments. The board might counter this by suggesting shareholders can vote beforehand but there's nothing like being at the meeting and voting after discussions have taken place.
The board have said that the time of the meeting has been set so that a representative from Lanyon Bowdler can attend. Given that the firm is based in Hereford that's a poor excuse for the timing.
No doubt there will be some discussion over the details sent out by the board.
One of the questions to the chairman is almost certain to be about whether shareholders are to vote on one or two resoultions. The formal letter to shareholders says that there is one vote on an 'Ordinary Resolution For The Allotment Of Shares' with two paragraphs of detail.
However the attached voting form has two resolutions on it. Firstly 'to approve conversion of Loans into shares' and secondly 'to give the Director's your approval for them to Administer this share issue/loan conversion'.
Again, as in the original proposals, there's some confusion here.
Another question may be about where a figure of raising 'up to an aggregate nominal amount of £2,820,000' has come from.
In the original details it was said the club was 'seeking to raise' a figure of £1.5 million plus a conversion from loans of up to £660,000. Together the total figure was £2,160,000.
The £2,820,000 figure is £660,000 higher than the £2,160,000 figure.
Thirdly it's thought there will be questions to the Chairman about what will be done with the money raised. It's understood the plans for developing Aylestone Park, one of the projects listed in the original documents, are likely to be dropped given the costs involved and the grant situation. A smaller scheme may be put forward instead.
Fourthly there's likely to be questions about why Pinsent Masons were ever involved in preparing some of the details of the original documentation given the Chairman's comments. For example does the club owe them any money for their work.
Whatever the questions, should the resolution(s) be passed the real hard work will then start - persuading current shareholders to increase their shareholding and then assuming they don't take up all the shares opening up the issue to new shareholders.
Most shareholders agree that the club needs this share issue to go ahead. There's no money in the kitty at present and there appears to be no plan B or sugar daddy.
However Chairman David Keyte will need to convince shareholders that the 'use of the proceeds' will be of benefit to the football club as a whole and not just to pay off loans.