Plymouth Argyle Supporters Trust Announcement

[Richard Chown]

The following announcement has been made by The Argyle Fans Trust to its members.

More details can be found at:

http://www.argylefanstrust.com/mission/share-offer-consultation/

The consultation will be discussed at the Trust AGM on Saturday 24th November, which begins at 11am at the Citybus Social Club near Home Park.

Key Points of the Consultation

The offer:

James Brent (JB) has offered the Argyle Fans’ Trust (AFT) the chance to buy up to 20% of the club for £400,000.

The minimum is 5% for £100,000.

JB would be open to acquisitions being made in phases (5% each time) up to a total of 20%.

The investment could be in the form of shares or convertible loan notes.

Convertible loan notes are a type of loan which can become shares in the future, e.g. after a period of time or after a specific event like JB selling his shares.

Why convertible loan notes?

The club would pay AFT interest (5% per year, i.e. £20,000 on a£400,000 investment).

AFT can decide what that income is used for – community projects to support the club, youth team, ladies team etc.

Shares would require the club to be profitable to pay anything to AFT on its investment.

Less risk – if the club went under again AFT would still have a chance to recover its investment.

Other considerations

A seat on the board is not on offer.

A 20% shareholding gives only limited rights in company law. At least 25% is needed for any significant rights.

Significant effort is required to raise £400,000.

Possibility of dilution by new investors.

AFT will need to incur professional costs to agree the valuation and take legal advice on any agreement.

Other options – Golden Share

AFT would be granted one share of a certain type with certain specific ‘protective’ rights (e.g. a veto over a change of club colours).

Possibly problematic in stopping club directors’ freedom to act in the best interests of the company.

Needs further consultation with the club.

Other options – Community Share Scheme

Method of fundraising for an appropriate community facility, e.g. youth training facilities which can be used by both the club and the community, e.g. local sports clubs.

If there is appetite for significant fund-raising is this a better of way of raising and spending the money?

Requires further consultation with the club and – possibly – Plymouth City Council about an appropriate project.

What now?

The AFT Board needs the views of the membership on whether:

1) To proceed with the share offer

2) If so, to what extent (5%, 10%, 15%,20%)

3) To pursue the Golden Share option further

4) To pursue a suitable joint community/club project for which a Community Share scheme could be used