It’s all about timing. In my case, almost always of the bad kind.
The ink had barely dried on my Friday piece, in which I expressed my ongoing fear over our club’s financial future if promotion is not achieved this season, when they go and announce an Extraordinary General Meeting for 13th February.
The purpose of said EGM is, and I quote: “… to allot a number of shares, as the club seeks to strengthen its financial sustainability by reducing the need for borrowings.
“Shareholders are welcome to attend the meeting, but given its anticipated short length are also encouraged to vote via proxy.
“Further information will follow once the formal business of the meeting has concluded.”
Make of that what you will.
The juicy bit will come, I guess, when the ‘futher information’ is revealed but essentially, according to the letter sent to shareholders, the plan is to allot an additional 194,512 ordinary shares on top of the existing number of 616,913, taking the total to 811,425 – an increase of nearly 24 per cent.
The big question is who will be taking up these additional shares.
The obvious answer is the Attansaios, and it may be that simple but, equally, maybe there could be a further twist to an already interesting situation.
What we do know, is that unless Michael and Delia have plans to take on those additional shares (surely not) this will serve to dilute their shareholding in the club to around 40 per cent from its existing 53. While they will jointly remain the largest shareholder, they will crucially no longer be the majority shareholder.
If, and it’s a big if, the Attanasios were to take on the new share allocation in its entirety, they would – based on them currently owning 16 per cent of the club – take their stake in it up to around 36 per cent.
Just four per cent shy of Delia and Michael. And that’s without the Americans hoovering up a few smaller share purchases, which they are believed to have done.
Clearly, this is all speculation and the machinations around the hows and whys are yet to be revealed, but it will be very interesting, if it isn’t purely a mechanism for permitting the Attansios and greater share and greater say, to find out exactly what is meant by “to strengthen its [the club’s] financial sustainability by reducing the need for borrowings.”
Given that we’ve already borrowed £66million this season, which is charged against two seasons’ worth of parachute payments, it does appear a little unnerving that, as they suggest, without the new share allocation there would be a need to borrow again.
What was the £66million borrowed for? If it was to, ultimately, assist with day-to-day running costs and help pay a big wage bill, then the need for even more cash to be injected into the club is curious, to say the least.
Hopefully, those with more knowledge than I of the club’s current financials will be able to enlighten us in the comments below.
Should we be worried?
In addition to the £66 million, the Attanasions have, of course, already lent the club £10million this season, in the form of some ‘C preference’ shares.
The original agreement was that upon certain triggers that £10million can be converted into either 10 per cent of ordinary shares or, in seven years, can be repaid, plus interest, at a cost to the club of around £17million.
Fortunately for us all, the noises that have emanated from the other side of the Pond since the original deal in September suggest the Attanasios are looking to become more rather than less involved, hopefully negating the need for that sum to be repaid in that particular form.
Either way, February could be interesting. It appears, one way or another, the vice-like grip that Michael and Delia have had over this club since the mid-1990s appears to be waning. Whether it’s by choice I’m not so sure, but it’s happening.
‘Be careful what you wish for’ is a phrase I’ve had thrown at me numerous times when I’ve questioned the direction in which Michael and Delia are taking the club, but even the fine lady’s loyalists may now have to concede that it’s time for the reins to be handed over.
Or just wishful thinking on my part?
Let us know what you think.