Companies House Filing

[Stranded]

Sorry for putting this in The Team but figured it may need a wider audience esp. as I don't have a clue what it means.

The club filed a "Resolution of Allotment of Securities" yesterday - PDF of it can be seen here

https://find-and-update.company-informa ... ng-history

It seems to suggest that the club plans to sell 25m GBP worth of shares in the near future.

Today there is an entry regarding a "statement of capital following an allotment of shares on 23rd June" with an amount of GBP 117, 072,346.00. So 117m quid.

No idea what any of this means - sale of the club on the quiet? Massive cash injection from the owner, turning debt into shares?

Any one have any ideas?

[Stranded]

Looking at the history, seems to happen about once a year, so nothing to get too interested in I would say. Carry on.

[YorkshireRoyal99]

Seems to be that the owner is allotting shares to someone once a year and said someone is putting x amount of money into the club each year.

[PATRIQT]

Seems to be that the owner is allotting shares to someone once a year and said someone is putting x amount of money into the club each year.

£25m though

[Nameless]

Owner turning debt into equity. It’s the one way owners can inject capital without it affecting FFP I believe
SJM used to do it. In the days when there were other shareholders it also was a way of a majorityshareholder increasing their % shareholding.

[Z175]

This is the way that Mr Dai funds the club. It is actually the one real benefit of the EFL profit and sustainability rules.

You are permitted to lose only £5m per season without putting in any equity (cash in exchange for shares). However if you inject enough equity, you can lose up to an extra £8m per season, so £13 loss each season and a maximum loss of £39m over a 3 year period.

The great thing about this for fans is that with equity funding the owner cannot get it back. Once the club take the money, and then lose it, all the owner has is worthless shares. Mr Dai has lost over 100m in this way - so that is 100m less debt to pay off from the club if they ever were put in administration.

Before these rules, most owners debt funded their clubs which caused an extra burden if the club went into administration - the owner would have a claim to be repaid their funding.

[Elm Park Kid]

This is the way that Mr Dai funds the club. It is actually the one real benefit of the EFL profit and sustainability rules.

You are permitted to lose only £5m per season without putting in any equity (cash in exchange for shares). However if you inject enough equity, you can lose up to an extra £8m per season, so £13 loss each season and a maximum loss of £39m over a 3 year period.

The great thing about this for fans is that with equity funding the owner cannot get it back. Once the club take the money, and then lose it, all the owner has is worthless shares. Mr Dai has lost over 100m in this way - so that is 100m less debt to pay off from the club if they ever were put in administration.

Before these rules, most owners debt funded their clubs which caused an extra burden if the club went into administration - the owner would have a claim to be repaid their funding.

That's sort of true and not. There's nothing to stop the Dai's taking out debt, not paying our taxes and selling off assets as a way of 'getting money back' before putting us into administration. And in reality it's unlikely that owners would have any significant amount of their personal debts from the club repaid as part of the sale purpose anyway - the administration process would only offer 25% as a default, and if the new owners were willing to accept another points deduction they could potentially pay nothing.

[Lower West]

The football club own neither the ground nor the training complex. If the club folded financially. Dai still holds all the bargaining chips.

[PATRIQT]

The football club own neither the ground nor the training complex. If the club folded financially. Dai still holds all the bargaining chips.

We're in a very dangerous position. We don't own the Hotel or the land around the stadium either. We literally have playing staff and that's it. If Dai every fcuked us over, we could easily go to the wall. I know the optimists say it'll never happen, but it could very well happen.

[Green]

The football club own neither the ground nor the training complex. If the club folded financially. Dai still holds all the bargaining chips.

We're in a very dangerous position. We don't own the Hotel or the land around the stadium either. We literally have playing staff and that's it. If Dai every fcuked us over, we could easily go to the wall. I know the optimists say it'll never happen, but it could very well happen.

I'm certainly not an optimist but the opportunity for someone to buy a championship club within 30 miles of Heathrow has got to drum up some interest from some oligarch somewhere. If only for the money laundering opportunities it presents.

We'll be right.

[Dirk Gently]

The football club own neither the ground nor the training complex. If the club folded financially. Dai still holds all the bargaining chips.

We're in a very dangerous position. We don't own the Hotel or the land around the stadium either. We literally have playing staff and that's it. If Dai every fcuked us over, we could easily go to the wall. I know the optimists say it'll never happen, but it could very well happen.

I'm certainly not an optimist but the opportunity for someone to buy a championship club within 30 miles of Heathrow has got to drum up some interest from some oligarch somewhere. If only for the money laundering opportunities it presents.

We'll be right.

Not sure times are great for oligarchs at the moment, but for other wealthy, stupid people then yes.

And the key word is "Championship" - lose that and the whole equation changes.

[LUX]

if I was filthy limitless rich, no way would I buy a football club.

[Wycombe Royal]

if I was filthy limitless rich, no way would I buy a football club.

I would. If I had enough that I didn't need to work ever again, I would buy a lower level football club club (probably non-league), invest some funds initially and then run it to be financially self funding. That way I would have something to do to stop me getting bored.

[From Despair To Where?]

I'd buy Swindon and turn the County Ground into allotments.

[LUX]

if I was filthy limitless rich, no way would I buy a football club.

I would. If I had enough that I didn't need to work ever again, I would buy a lower level football club club (probably non-league), invest some funds initially and then run it to be financially self funding. That way I would have something to do to stop me getting bored.

football fans are morons. If you do not get immediate success, especially if your unlimited funds are known, it'll be "sack the Board/get rid of the owner". I wouldn't be up for that hassle.

[Brogue]

are we talking woodley hammers here, wycombe? or your wrexhams of this world

[Dirk Gently]

if I was filthy limitless rich, no way would I buy a football club.

I would. If I had enough that I didn't need to work ever again, I would buy a lower level football club club (probably non-league), invest some funds initially and then run it to be financially self funding. That way I would have something to do to stop me getting bored.

The problem is that it can only become financially self funding if it has fans turning up - and there's no way you can create or artificially manufacture a fan-base. It grows organically, often over generations. You might get a short-term boost with success, but getting them to stay when the going gets a bit tough is quite another thing.

qv Gretna for the absolutely perfect example of this.

[Elm Park Kid]

Ultimately - the assets or non-footballing debts of a club are not a meaningful indicator of it's long-term viability. This is something that fans tend to get wrong. Yes, if a club doesn't own it's stadium then that can put off potential buyers - but only if the current owners of the stadium aren't willing to sell it to them. You saw with Derby that the club didn't own the stadium - but Mel Morris was happy to sell it to the new owners as part of the deal.

If a club goes into administration then all of it's non-football debts can be cleared - It doesn't really matter if the club owes the existing owner £10 or £10bn, it won't make much difference to the attractiveness to a potential buyer - they'll just have to accept the further points deduction. They will mainly care about how much the club is losing on a regular basis - how much will they have to pay out each month to keep it going.

If Dai and co decided that they had had enough of Reading - then I reckon the club could be reasonably appealing to buyers (assuming the owners agree to sell the stadium at a reasonable price). It will have gotten it's wage bill down to a ok level, the stadium is a fairly decent size, commercial income seems to be lower than it should be and a smart owner would fancy their chances of increasing it. Our fan base isn't great, but has a higher income than most.

[Dirk Gently]

If Dai and co decided that they had had enough of Reading - then I reckon the club could be reasonably appealing to buyers (assuming the owners agree to sell the stadium at a reasonable price). It will have gotten it's wage bill down to a ok level, the stadium is a fairly decent size, commercial income seems to be lower than it should be and a smart owner would fancy their chances of increasing it. Our fan base isn't great, but has a higher income than most.

Why would the stadium owners have to sell it to the new club? Surely a much better business model for them would be to rent it to the club, like Firoz Kassam did at the other end of the A4074?

[Nameless]

The football club own neither the ground nor the training complex. If the club folded financially. Dai still holds all the bargaining chips.

We're in a very dangerous position. We don't own the Hotel or the land around the stadium either. We literally have playing staff and that's it. If Dai every fcuked us over, we could easily go to the wall. I know the optimists say it'll never happen, but it could very well happen.

That’s the same position we’ve Been in for decades though. We’ve been in the hands of an owner with absolute control of the club and the ability to pull the plug at any time.