New beginnings - 25% Truth, 80% Bollocks

[Power to people]

Which is precisely why the terms of the loan would be very important to question if you were the Trust and looking into the finances, as was agreed.  What we know is that shares exchanged hands and the Memorandum and Articles of Association were updated at the same time - which means the rules for running the business were changed.  It's no unreasonable to think both are linked.

Even then, the fact someone stands to make money if we make money, you can kind of live with - you'd want the club to state clearly the position and how it benefits the club, to avoid the appearance of any Power style book keeping.

I am not saying Clem hasn't put his own money up, I am just saying the only evidence we have of the trading/operating position, financially, currently does not support a statement of losing 500k-1m per year.  And if we are indeed now losing that amount, in year three, after increases in Revenue from the POwer period (peak Power period) and reduction in squad size this season, it begs the question how is that now being funded if Clem had reached his limit?  I was trying to say that Clem himself may have confused trading position with cash position - where he has to keep paying off that remaining external debt.

It would be good to know the terms of the loan's, is there an agreed repayment date with a certain level of interest attached ? assume that when Clem pays these off that will be more money owed to him, so will end up acceding the £7m.

I wonder if any of the money we have received for player sales have gone / are going to repay any of the debt owed to Clem, to bring that down, he does not strike you a someone who has millions lying around he must have a ceiling without having to use external borrowing, I know there are still a couple of historical debts owed to the FL but the appear to be being paid slowly.

[Batch]

the Memorandum and Articles of Association were updated at the same time - which means the rules for running the business were changed. 

Can anyone summarise the changes in laymans terms? I'll try and look later if not.

[RobertT]

You'd need a contract/business law expert to be honest - needless to say there were a lot more words in the newer version, including the addition of Pre-emption rights - although I didn't see anything like values in this lot.  I don't know if there would be other contractual documents in existence alongside this, the Companies House bit only requires certain docs to be registered.

You couldn't read, I don't think, and spot any obvious 'Ah Ha's"

The Pre-emption rights for example, is likely just a sensible way of protecting your investment as non-controlling interest shareholder.  It gives them the right to bid/match (I think) any potential purchases of Clems shareholding.

My interest was peaked more by the fact they were updated at the time of the Loan - suggests it's a bit more nuanced than handing over some cash and getting some Shares as security.  For starters, the lack of any notification of debts being secured means that it's not technically that type of deal.  The shares did change hands - they are not being held for security, legally.  They are now owned by the new investors - there may also be a loan agreement in place somewhere, details of which are not public.

[RobertT]

It would be good to know the terms of the loan's, is there an agreed repayment date with a certain level of interest attached ? assume that when Clem pays these off that will be more money owed to him, so will end up acceding the £7m.

I wonder if any of the money we have received for player sales have gone / are going to repay any of the debt owed to Clem, to bring that down, he does not strike you a someone who has millions lying around he must have a ceiling without having to use external borrowing, I know there are still a couple of historical debts owed to the FL but the appear to be being paid slowly.

Yes, the loan terms are important, especially given the scale.  On paper, it seems like the share ownership change was made in the Holding Co.  We do not know where and how the cash was funneled, did they loan the Holding Co which in turn loaned the STFC business the money to settle the  Debentures? or was it recorded as a Share Capital investment? Or a mix of both?  If the Holding Co loaned the money through, on what terms?  And so on.  It's not like it is a few grand, it's near 3m and caused 22% of the Shareholding to exchange hands and put the new Shareholders in the driving seat for any potential future change in ownership (if I understand things correctly).

[Batch]

Thanks Rob

[STFC_Manc]

Yes, the loan terms are important, especially given the scale.  On paper, it seems like the share ownership change was made in the Holding Co.  We do not know where and how the cash was funneled, did they loan the Holding Co which in turn loaned the STFC business the money to settle the  Debentures? or was it recorded as a Share Capital investment? Or a mix of both?  If the Holding Co loaned the money through, on what terms?  And so on.  It's not like it is a few grand, it's near 3m and caused 22% of the Shareholding to exchange hands and put the new Shareholders in the driving seat for any potential future change in ownership (if I understand things correctly).

I would hope it wasn't £3m for 22% or that would put the value of STFC at c£14m! We aren't likely to find out until the accounts are out.

[Robinz]

During a time of needing a macro understanding of Commerial law. It was explained to me that the rights of a minority shareholder was basically f@ck all. Except for being a nuisance.
That said seem to remember that if you had less than 23% of the total shareholding you were unable to stop or defer any major financial transactions of the said company.

[Bob's Orange]

Still nothing on companies house for Seebeck 87 despite Clem saying they were filed last week. Is it normal that Companies House can take so long to update? The warning about late accounts still remains. But I'm not sure if down to shoddy admin or not.

[wokinghamred]

 It can take a few days for documents to be recorded - up to a week or so.
When they are available it will show the date they were filed with Companies House though.

[RobertT]

I would hope it wasn't £3m for 22% or that would put the value of STFC at c£14m! We aren't likely to find out until the accounts are out.

Which is why the deal details would be important to know if you were the Trust.  The public musings of Clem would indeed support the fact it was a 3m for 22% transaction, but he also said it's a loan and he also threw out another number of 1.45m at one point when slipping into more of the timeline.  It may be that it's a bit of a loan and a bit of share purchase, but then he also said he was getting the shares back, which suggests all if it was a "loan".  Basically, none of it fully adds up still - we don't seem to have all the variables in the formula is the issue.

[Posh Red]

Which is why the deal details would be important to know if you were the Trust.  The public musings of Clem would indeed support the fact it was a 3m for 22% transaction, but he also said it's a loan and he also threw out another number of 1.45m at one point when slipping into more of the timeline.  It may be that it's a bit of a loan and a bit of share purchase, but then he also said he was getting the shares back, which suggests all if it was a "loan".  Basically, none of it fully adds up still - we don't seem to have all the variables in the formula is the issue.

Didn't he say that the debentures were £2.95m, but that he was able to raise around half of it himself, which would mean that he borrowed the other half. As you say he has said the shares were used as security for the money which suggests it was a loan.

[STFC_Manc]

Didn't he say that the debentures were £2.95m, but that he was able to raise around half of it himself, which would mean that he borrowed the other half. As you say he has said the shares were used as security for the money which suggests it was a loan.

Yep agree with you

[RobertT]

As it stands right now, there are zero legal charges registered against Swindon Town Football Club:

https://find-and-update.company-information.service.gov.uk/company/00053100/charges

and none ever registered, that I can see, for Seebeck 87 or Swinton Reds 20

If the shares were used as Security for a loan, they were not registered as such.  A share transfer did occur - so the language being used is not accurate, legally speaking, it seems.  There would need to be some other type of contractual obligation drawn up that may speak to something like "being held as security", but the assets of the business were not used as collateral in the deal they struck.

The only public info we have, that is fact, is that the business had a share dilution, then transferred a % of those new shares to the new share owners and changed the rules of the business at the same time, and four debentures against STFC Ltd were satisfied.

I'm not harping on because any of that is "bad", just that we do not hold the full facts and nothing stated gives us the full facts as yet.  The Trust should want to know that when reviewing the financial position of  the club, which I believe they were doing.

[Nemo]

I've always assumed the "security" meant shares transferred with a buyback clause (whether that was a written contract or otherwise)

[@MacPhlea]

As I understand there are two ways a loan can be secured

As a charge at Companies house to register the debt but this can been seen as a negative toward credit ratings

Or

As a share holding with a loan agreement linked to the return of the shares on repayment.  This shows up as a normal shareholding at companies house but does not place a charge against the company.