The Pit of Misery (All mess in here)

[GarTomas]

As clear as mud.

I never said it was straight forward!

[Gareth]

Just saw on Rob Dorsett (sp) twitter that the club refused to pay 20k for new suits for Wembley....as much as that would have been a vanity expense it suggests that the players knew something was afoot if we lost....wouldn’t exempt the first half white flag but might explain setting up for penalties

[Monty]

Just saw on Rob Dorsett (sp) twitter that the club refused to pay 20k for new suits for Wembley....as much as that would have been a vanity expense it suggests that the players knew something was afoot if we lost....wouldn’t exempt the first half white flag but might explain setting up for penalties

How?

[GarTomas]

The idea of pre emptive rights is to protect minority shareholders to an extent in terms of stopping them being diluted.

So if X owns 50% of a company made of of 100 shares he owns 50 shares with the other 50 owned by others.

If X wants to take over the company he has a number of options. He can buy shares from the other holders but only to the extent they wish to sell or the buyer is willing to pay fair value or above.  If the number of shares in the company is increased though is another way to do this.  So if the company issues another 100 shares, then the end result is 200 shares in the company.

Now X owns 50 and the other 50 are owned by others with the other 100 up for grabs.  The idea of pre emptive is that the 100 shares are offered equally first to other shareholders based on what they all own.

So if the other 50 are owned by 5 with 10 each, they are able to buy 10 each and X can only buy 50.  Thus if everyone exercises their pre emptive rights X ends up with 100 of the 200 and the others own 20 instead of 10. So each shareholder is protected as their ownership hasn’t been diluted in any way. The minority’s shareholder are thus protected as X hasn’t been able to buy all 100 shares and becoming a 75% shareholder at the expense of the minority.

A few things to consider; pre emptive rights work to an extent based on minority shareholders being willing or able to purchase the shares at the fixed rate.  So if the shares are issued at a sufficiently high amount that the minority can’t afford then they can be squeezed out in this way (although the price set has to be agreed by the shareholders up front in some way that prevents this)

Either way given Tony is the owner of the club the removal or pre emptive rights is odd since he’s only taken the rights from himself which he could forgo anyway when seeking alternative investments.

Who knew 10 years in Corporate Actions would come into some use here.

Since he's the only shareholder i guess he waives the pre-emption rights to simplify the process (and maybe make further issuance easier)?

Bottom line, he's selling shares to someone and this gives him the ability to do it. We'll find out more in 5 days

It could effectively make it slightly quicker yes.  I'd expect if they are going down this route they have some sort of investment lined up.  It also opens up the possibility of supporter involvement in some way as it could allow fans to invest in the club even for a nominal amount.

[ajmant]

Just saw on Rob Dorsett (sp) twitter that the club refused to pay 20k for new suits for Wembley....as much as that would have been a vanity expense it suggests that the players knew something was afoot if we lost....wouldn’t exempt the first half white flag but might explain setting up for penalties

I should bloody well hope the club said no to £20k worth of suits which was for nothing more than an extra league game because we'd cocked up some of the previous 46.

[eamonn]

Should have  told them they could recycle the Ciro Citterio outfits from the class of '96 or they could buy their fooking own.

[villa `cross the mersey]

Doesn't look like we will be sponsored by House of Fraser or Pound World
Let's hope Mr Freunds Trinity Packaging can inject some much needed finance

[kipeye]

Should have  told them they could recycle the Ciro Citterio outfits from the class of '96 or they could buy their fooking own.

Less likely to be Big Ron style, more likely MON tracksuits.

[Jon Crofts]

As the only shareholder, is this him doing a share split to create some liquidity and a more attractive purchase price?

[GarTomas]

As the only shareholder, is this him doing a share split to create some liquidity and a more attractive purchase price?

That wouldn't really work given the shares aren't publicly traded or listed anywhere as far as I'm aware. 

A share split would just lower the price of every share but the sum of the whole would remain the same.  It would open up the potential of supporters investing at a very low price as part of any restructure (this is how BrewDog actually raises money by issuing thousands of shares at an affordable price)

[Jon Crofts]

As the only shareholder, is this him doing a share split to create some liquidity and a more attractive purchase price?

That wouldn't really work given the shares aren't publicly traded or listed anywhere as far as I'm aware. 

A share split would just lower the price of every share but the sum of the whole would remain the same.  It would open up the potential of supporters investing at a very low price as part of any restructure (this is how BrewDog actually raises money by issuing thousands of shares at an affordable price)

I have no idea what the articles of association state but RECON and Villa may have 1 issued share each or 10 that Tony owns, doing a split would allow an investor to buy in at a lower price or at the price that Xia wants to inject as working capital without giving up control.

[yammers]

The idea of pre emptive rights is to protect minority shareholders to an extent in terms of stopping them being diluted.

So if X owns 50% of a company made of of 100 shares he owns 50 shares with the other 50 owned by others.

If X wants to take over the company he has a number of options. He can buy shares from the other holders but only to the extent they wish to sell or the buyer is willing to pay fair value or above.  If the number of shares in the company is increased though is another way to do this.  So if the company issues another 100 shares, then the end result is 200 shares in the company.

Now X owns 50 and the other 50 are owned by others with the other 100 up for grabs.  The idea of pre emptive is that the 100 shares are offered equally first to other shareholders based on what they all own.

So if the other 50 are owned by 5 with 10 each, they are able to buy 10 each and X can only buy 50.  Thus if everyone exercises their pre emptive rights X ends up with 100 of the 200 and the others own 20 instead of 10. So each shareholder is protected as their ownership hasn’t been diluted in any way. The minority’s shareholder are thus protected as X hasn’t been able to buy all 100 shares and becoming a 75% shareholder at the expense of the minority.

A few things to consider; pre emptive rights work to an extent based on minority shareholders being willing or able to purchase the shares at the fixed rate.  So if the shares are issued at a sufficiently high amount that the minority can’t afford then they can be squeezed out in this way (although the price set has to be agreed by the shareholders up front in some way that prevents this)

Either way given Tony is the owner of the club the removal or pre emptive rights is odd since he’s only taken the rights from himself which he could forgo anyway when seeking alternative investments.

Who knew 10 years in Corporate Actions would come into some use here.

I was with you all the way up to “The idea of pre emptive rights is to....”

[Pat McMahon]

The idea of pre emptive rights is to protect minority shareholders to an extent in terms of stopping them being diluted.

So if X owns 50% of a company made of of 100 shares he owns 50 shares with the other 50 owned by others.

If X wants to take over the company he has a number of options. He can buy shares from the other holders but only to the extent they wish to sell or the buyer is willing to pay fair value or above.  If the number of shares in the company is increased though is another way to do this.  So if the company issues another 100 shares, then the end result is 200 shares in the company.

Now X owns 50 and the other 50 are owned by others with the other 100 up for grabs.  The idea of pre emptive is that the 100 shares are offered equally first to other shareholders based on what they all own.

So if the other 50 are owned by 5 with 10 each, they are able to buy 10 each and X can only buy 50.  Thus if everyone exercises their pre emptive rights X ends up with 100 of the 200 and the others own 20 instead of 10. So each shareholder is protected as their ownership hasn’t been diluted in any way. The minority’s shareholder are thus protected as X hasn’t been able to buy all 100 shares and becoming a 75% shareholder at the expense of the minority.

A few things to consider; pre emptive rights work to an extent based on minority shareholders being willing or able to purchase the shares at the fixed rate.  So if the shares are issued at a sufficiently high amount that the minority can’t afford then they can be squeezed out in this way (although the price set has to be agreed by the shareholders up front in some way that prevents this)

Either way given Tony is the owner of the club the removal or pre emptive rights is odd since he’s only taken the rights from himself which he could forgo anyway when seeking alternative investments.

Who knew 10 years in Corporate Actions would come into some use here.

Since he's the only shareholder i guess he waives the pre-emption rights to simplify the process (and maybe make further issuance easier)?

Bottom line, he's selling shares to someone and this gives him the ability to do it. We'll find out more in 5 days

It could effectively make it slightly quicker yes.  I'd expect if they are going down this route they have some sort of investment lined up.  It also opens up the possibility of supporter involvement in some way as it could allow fans to invest in the club even for a nominal amount.

I think you are probably right GarTomas, but I don't expect  supporter involvement.

[russon]

I’m so far out of my depth with this thread that this sprang to mind...

[UK Redsox]

Welcome to my world of checking Companies House every day to check that they’ve actually processed the stuff we’ve sent in.

Also annoying that HMRC are on the ball with threats of winding up but can’t process a VAT7 in the three weeks they’re supposed to. They now say to give them 30 working days (ie 6 weeks)

Don’t get me started on their VAT426 cock ups