Breaking News Club Statement

[Dutch Branch]

I wouldn’t read to much into it as it’s part of the agreement moving forward and they use the word “hope” rather than “will” to get the deal done by 1st November.

TBF, at least he’s actually communicated it.

I’d say all still on course.

 

[Holy Joe]

Nothing to be concerned about as far as I can tell.

RM writing off his debt as a debt-to-equity swap, which suits the consortium as they then get a larger shareholding.

RM will therefore have to do a share issue (create new shares, basically), which will increase SEL's share holding (and thus, unfortunately, dilite the %s of fans' shareholdings).

Consortium will then buy the increased shareholding from SEL.

It'll be done by shareholder resolution, which RM can pass with his shareholding alone, but there are legal obligations involved, including 21 day notice period for shareholders, which takes us beyond 1st Nov

Interested to know how the statement went down with JR and consortium as it seems to blame them. Ultimately they probably don't care too much and just want to get it done, but blame lies clearly at RM's door. He's known for months that it's a condition of sale and that he has to be the one to initiate it, so quite why it's taken him this long I don't know.

Probably goes back to that Martin family entitlement. He's washed his hands and think it's job done but there are still some things he needs to do on his side. Probably thinks if he ignores them for long enough, they'll go away.

Perhaps a slight concern that this narrows the opportunity for organised fans shareholding, but there are other ways to get material fan involvement in the running of the club which could be explored, so we'll see.

Is the debt to equity swap the only way to right off the debt? Could the debt be eliminated a different way?

 

[Shrimpergonzo]

If the majority share goes over 90% which it would do with total debts around £2.5m then they can buy out all the other shares, I believe. As the shares currently fairly worthless and RM is selling his current 70% for £1 not sure of the price. If the new owners get 100% makes it fairly easy to organise a share rights issue and consolidate the RH freehold into Southend United fc if they wish. Purchase could be spread over a period I believe, around £4.5m.

That’s really interesting - I guess that must be on the cards then. Shame, as I rather like owning my 20 shares!

 

[ColinMorrisWalksOnWater]

Having read the thread and the background from those with the financial knowledge behind the statement, which is most welcome and the thoughts of everyone, I have come to the following conclusion, rightly or wrongly.

Either:

a. Ron was taken aback by the terms of the sale, but knew realistically he wasn't going to get a better offer and whilst accepting the deal was spending time to find a way to mitigate his loses in terms of righting off the debt. This taking more time for him and his advisors to come up with this debt to equity option, which is why it has only just been announced and with the timeframes that must take place to notify all other shareholders would explain why it has set the conclusion to the sale process back in this manner.

or

b. He is just proving what a scheming caniving T * * t we know him to be. Knowing he would have to do something like this and the timescales involved, he's deliberately played this to put the completion of the takeover back on it's heels.

You pays your money and takes your choice imho.

 

[Yorkshire Blue]

Is the debt to equity swap the only way to right off the debt? Could the debt be eliminated a different way?

There could be tax implications. My usual starting point is to assume any deal structure is driven by tax.

For those who have received the notice does it say what class of shares these will be? Are they creating a new class of share?

Having read the thread and the background from those with the financial knowledge behind the statement, which is most welcome and the thoughts of everyone, I have come to the following conclusion, rightly or wrongly.

Either:

a. Ron was taken aback by the terms of the sale, but knew realistically he wasn't going to get a better offer and whilst accepting the deal was spending time to find a way to mitigate his loses in terms of righting off the debt. This taking more time for him and his advisors to come up with this debt to equity option, which is why it has only just been announced and with the timeframes that must take place to notify all other shareholders would explain why it has set the conclusion to the sale process back in this manner.

or

b. He is just proving what a scheming caniving T * * t we know him to be. Knowing he would have to do something like this and the timescales involved, he's deliberately played this to put the completion of the takeover back on it's heels.

You pays your money and takes your choice imho.

Possibility c) his solicitors downed tools as they hadn’t been paid.

 

[Maldon Shrimper]

For those who havent received this letter from the club,its dated 18th October which I received today by post is inviting shareholders to Southend City Council on Friday 17th November at 7.45pm to vote on the Special Resolution

 

[kentblues]

Having read the thread and the background from those with the financial knowledge behind the statement, which is most welcome and the thoughts of everyone, I have come to the following conclusion, rightly or wrongly.

Either:

a. Ron was taken aback by the terms of the sale, but knew realistically he wasn't going to get a better offer and whilst accepting the deal was spending time to find a way to mitigate his loses in terms of righting off the debt. This taking more time for him and his advisors to come up with this debt to equity option, which is why it has only just been announced and with the timeframes that must take place to notify all other shareholders would explain why it has set the conclusion to the sale process back in this manner.

or

b. He is just proving what a scheming caniving T * * t we know him to be. Knowing he would have to do something like this and the timescales involved, he's deliberately played this to put the completion of the takeover back on it's heels.

You pays your money and takes your choice imho.

Remembering it the consortium that has this requirement not Ron...so doubt its anything to do with his debt, and more to do with how the consortium need this to happen whether debt for shares for certain individuals other than Ron, or perhaps increasing their overall shareholdng via issuing more shares (thereby diluting existing holdings)? Not clear to me at least...

What does the notice sent out actually say? Would it not normally carry the resolution to be voted on?

 

[Richard Hearn]

Does this help?

 

[Bar na bas]

Thank goodness we are not in the same run of Saturday Tuesday matches at present. We do of course have the two home matches and one away match left in October, but between 1st and 17th November, we only have the one match in 17 days - away at Altrincham on 11/11 - so hopefully some time to get some of the injured players back, and also more time to get new players lined up in principle so that we can sign them as soon as the takeover happens and embargo is cleared…

 

[ColinMorrisWalksOnWater]

Remembering it the consortium that has this requirement not Ron...so doubt its anything to do with his debt, and more to do with how the consortium need this to happen whether debt for shares for certain individuals other than Ron, or perhaps increasing their overall shareholdng via issuing more shares (thereby diluting existing holdings)? Not clear to me at least...

What does the notice sent out actually say? Would it not normally carry the resolution to be voted on?

Fair point KB.

I'm still waiting for my notice to arrive, but that was the first thing that struck my mind and secondly as someone else mentioned, if it mentions what class of share the new ones issued to SEL for the consortium to buy will be.

 

[tommy tucker]

Sorry being a idiot this is as clrar as mud to me Is it the concortium are trying to get more shares in the club or what Please make it so a persns like me can understand what the hell it al means .

 

[Blues4LifeDan]

Does this help?
View attachment 29554

So if the meeting isn't happening until the 17th of November, how long after that do we have to wait for the sale to be completed?

 

[kentblues]

Does this help?
View attachment 29554

So quite simply the sole purpose of this is to take the SEL shareholding from just over 70% to just over 90%. Why? Because over 90% they can purchase the remaining shares with little right of objection and own 100% of the company?

 

[kentblues]

Does this help?
View attachment 29554

Note the club is already a private limited company (even if the major shareholder isn't) and therefore this wont change.

 

[southendkid]

Sorry being a idiot this is as clrar as mud to me Is it the concortium are trying to get more shares in the club or what Please make it so a persns like me can understand what the hell it al means .

Essentially to pay back some of the debt (I'm guessing to Ron's companies but it hasn't explicitly been said) Southend can create new shares and give them to our debtors as "payment". By doing this it means existing shareholders will own less of the club.

If the new shares are going to Ron then it means the consortium can buy a bigger percentage of the club from him.

 

[Massimo Giovanni]

So quite simply the sole purpose of this is to take the SEL shareholding from just over 70% to just over 90%. Why? Because over 90% they can purchase the remaining shares with little right of objection and own 100% of the company?

I believe you have the crux of it.

A good will gesture of sorts, to the departing, soon to be ex, share holders of a priority listing for a game such as the FA cup at Chelsea would be well recieved imo.

 

[Tinks]

Nothing to be concerned about as far as I can tell.

RM writing off his debt as a debt-to-equity swap, which suits the consortium as they then get a larger shareholding.

RM will therefore have to do a share issue (create new shares, basically), which will increase SEL's share holding (and thus, unfortunately, dilite the %s of fans' shareholdings).

Consortium will then buy the increased shareholding from SEL.

It'll be done by shareholder resolution, which RM can pass with his shareholding alone, but there are legal obligations involved, including 21 day notice period for shareholders, which takes us beyond 1st Nov

Interested to know how the statement went down with JR and consortium as it seems to blame them. Ultimately they probably don't care too much and just want to get it done, but blame lies clearly at RM's door. He's known for months that it's a condition of sale and that he has to be the one to initiate it, so quite why it's taken him this long I don't know.

Probably goes back to that Martin family entitlement. He's washed his hands and think it's job done but there are still some things he needs to do on his side. Probably thinks if he ignores them for long enough, they'll go away.

Perhaps a slight concern that this narrows the opportunity for organised fans shareholding, but there are other ways to get material fan involvement in the running of the club which could be explored, so we'll see.

Thank you for explaining so I can understand

 

[LucindaC]

Share talk is not my thing, so I may be verging on the ridiculous

But is it possible say that one of Ron's businesses (as a creditor) could exchange debt for equity and therefore Ron still is a shareholder ?

And then by increasing the number of shares the Consortium reduces Ron's shareholding % in the club so that the Consortium still remain the majority % share owner ?

 

[londonblue]

Share talk is not my thing, so I may be verging on the ridiculous

But is it possible say that one of Ron's businesses (as a creditor) could exchange debt for equity and therefore Ron still is a shareholder ?

And then by increasing the number of shares the Consortium reduces Ron's shareholding % in the club so that the Consortium still remain the majority % share owner ?

No

 

[Thundersley Blue]

Having read the thread and the background from those with the financial knowledge behind the statement, which is most welcome and the thoughts of everyone, I have come to the following conclusion, rightly or wrongly.

Either:

a. Ron was taken aback by the terms of the sale, but knew realistically he wasn't going to get a better offer and whilst accepting the deal was spending time to find a way to mitigate his loses in terms of righting off the debt. This taking more time for him and his advisors to come up with this debt to equity option, which is why it has only just been announced and with the timeframes that must take place to notify all other shareholders would explain why it has set the conclusion to the sale process back in this manner.

or

b. He is just proving what a scheming caniving T * * t we know him to be. Knowing he would have to do something like this and the timescales involved, he's deliberately played this to put the completion of the takeover back on it's heels.

You pays your money and takes your choice imho.

I may be confused, but the Club Statement stated it was requested by the Consortium that the share capital in the Club was increased not by Ron.