Administration and beyond!

Whitesince63 wrote:
With interest rates at current levels and not likely to rise that much Bob, I don’t think the debt is a massive problem for now and if the likes of Dapo and Rico carry on as they are, they could be sold and debts cleared very quickly putting the club in the best place it’s been in years. Promotion would be the icing on the cake but of course we mustn’t look too far ahead. I think FV are doing a first class job and despite the outstanding debt the club is in a much better place than it was and I’m sure potential investors will see that.

Its definitely more enjoyable to watch than its been for some years but best place it's been?

As I recall we won promotion to the Championship in 2017 and stayed there in 2018, just one step away from the Premiership. In all probability we also made a small profit thanks to the sale of G Madine for £millions more than he was worth and still had Eddie Davies in the background albeit not nearly as wealthy as he once was.

FV have certainly improved since they brought in 'the onion man' to manage the team and Toby Twirl to handle recruitment but Ian Evatt could be high on the list of wealthier club owners looking for a new manager if he were to get back-to-back EFL promotions.

Owen Oyston once said that he made a small fortune by starting with a large one and investing it in the News on Sunday.

[You must be registered and logged in to see this link.]

Eddie Davies could have said much the same about investing in football clubs. He probably didn't  though; I don't think he was much like Owen Oyston.

I was reading the further speculation about the club’s finances on today’s match-thread and agree with Wessy that is not the best place for it. So, I thought I’d comment back here instead. 
A lot seems to have been made about the Future Fund £5m. But surely how FV used it is exactly the purpose for which it was set up; to support a business when a number of its revenue streams had been curtailed because of the pandemic. In BWFC’s case, match-day revenue and profits from the hotel. Of course, it would have been nice to pay the £5m back, but, again, the Future Fund structure anticipated that some (maybe most) businesses wouldn’t be in a position to do that and so allowed a conversion into equity. What FV have ended up with is an equity partner that contributed £5m when it was needed and doesn’t interfere with the running of the business in any way. I have no idea why other football clubs didn’t do the same. I suspect there was some sort of financial hurdle about longer term sustainability that FV could pass, which others could not. 
With regard to just that, most other clubs don’t have the non-match-day revenue that we do. Believe me, I’m not claiming any inside information, but I strongly suspect the FV model is sustainable given the modest level of spending, the successful unloading of players surplus to requirements and the very healthy levels of support together with the profit from the hotel. 
Yes, there is debt, but I’m certainly not aware there is any pressure to repay it in the short term. 
In summary, I can’t see any reason to be worried about the finances. 
Now, if we went up to the Championship - and, frankly, I think that’s unlikely this year, although, if we keep the team together, who would bet against us going up next year - finances are a different story. Pretty much all Championship clubs lose money and, on average, quite a lot of it. Maybe one of the owners would step up - as I said in a previous post, they could be along for the ride because they’re enjoying it, not to make money. Or maybe Sharon will find an investor content to sit alongside the current ones. Who knows?  But that’s for another day anyway.

Hi Barry, I don't think anyone has said that FV have misused the £5m Futures Fund in an illegal way or anything but more to the point that the £5m is public money and paying £5m for something like 8% or 9% of the ownership of the club - which values FV at a ridiculous £64m is frankly scandalous and certainly not value for money for the taxpayer.

Something extremely odd has gone on with the valuation of shares bought by the FF which were listed as being purchased for over £8 per share - particularly that just a month or two later further shares were issued and sold at £1 per share.

The company is already technically insolvent in that its debts (to creditors) are far greater than the assets it owns - nobody in their right mind would be paying anything like a £1 per share in the company let alone over £8 per share which the FF did???

It also gets very complicated in that anyone who owns more than 10% of any clubs shares are not allowed under EFL rules to own shares in any other club.

It would seem on the face of it some manipulation has been done so that the £5m loan turned into share ownership has been done in such a way as to deliberately get around the EFL rule - but at the same time vastly devaluing the worth of the investment to the taxpayer.

To put it in simple terms in looks as though the FF fund has put £5m into FV for what, after a month, has lost £4.6m worth of its value - the shares they hold are now worth at best just £400,000.

Something is clearly amiss.

We (Bob and myself) have been trying to ascertain how all this was done legally - we are not suggesting any illegality - but up to now we can't see how it was achieved, nor how the investment by the government meets the 'value for money' criteria that is legally from it.

I suspect no other club we know about have accessed the FF funding because non of them have been able to manipulate their share price in such a way that FV have in order to obtain the loan yet the amount of the loan that shares equate to are less than 10% of its total share ownership and thus inside the EFL's requirement.

As for FV finances, as it stands today based on what we know, the company still has more debts than assets (the Administrators £1m fee has still not been settled yet - two years on from the sale!) and that the 'owners' have put something like £9.5m into the business that still hasn't repaid the PBP loan that now amounts to something like £7m (including interest) nor Brett Warburtons loan which now totals something like £2.5m.

We are not even sure the club has reached a point of financial stability yet and on paper at least has something like £10m worth of existing creditors!

Now if that was my company - I'd be worried, very worried in fact!

But obviously it isn't my company and on the face of it nobody seems to be worried at all.

I can only conclude from that is that there must be someone with deep pockets behind all of this or things are going to get horribly bad for us sooner or later.

My guess is the former - hope I'm right!

We won't really know where the £5m has gone until FV publish their accounts will we and we might not even know then? But it looks very much like more than half of it went to settle the debt to the Eddie Davies Trust at a huge discount on the amount FV had agreed to pay. I expect EDT were relieved to get something but I'd be surprised if the trustees were popping champagne corks.

When more 2021 football club accounts appear we should know more about the COVID support other club owners have received. There might be a few more like Gillingham that faired better with COVID than without it.

At the moment though FGR's owner, Dale Vince, seems to be front runner with a £15m loan to prop up an enterprise run for years on ever-increasing debt.

There seems to have been another interesting development down Burnden Way. Has it been missed by Eagle-eyed Iles and Hawkeye Maguire that Nick Luckock has formed a new holding company with its registered office at the Unibol?

[You must be registered and logged in to see this link.]

Why? What's that all about?

Ten Bobsworth wrote:There seems to have been another interesting development down Burnden Way. Has it been missed by Eagle-eyed Iles and Hawkeye Maguire that Nick Luckock has formed a new holding company with its registered office at the Unibol?

[You must be registered and logged in to see this link.]

Why? What's that all about?

Company set up on 14th Jan, 2022

FV issues new shares on 21st Jan, 2022

Coincidence...?

Sluffy wrote:

Company set up on 14th Jan, 2022

FV issues new shares on 21st Jan, 2022

Coincidence...?

It could be but I suspect it isn't. Luckock's the only director of BMLL and the only individual recorded as a Person with Significant Control.

Ten Bobsworth wrote:

Sluffy wrote:

Company set up on 14th Jan, 2022

FV issues new shares on 21st Jan, 2022

Coincidence...?

It could be but I suspect it isn't. Luckock's the only director of BMLL and the only individual recorded as a Person with Significant Control.

Who knows, I really only posted that as something to reply back to you in acknowledgement of you noting the existence of his new company.

I had a quick flick through of some of Luckock's other directorships and noted that he and Sharon joined the board of LICKD Ltd together on 1st Jan, 2021 and possibly more coincidently(?) that Sharon was a director of Disciple Media Ltd resigning in Oct, 2019 and that Luckock became one in July 2021.

I also note that Luckock resigned as a director of Achilles Holdco Ltd on 5th October, 2021 following what seems like loans of £231m were written off (see the very last entry of the auditors notes on the accounts).  Luckock had been a director since December 2016, so I guess he wasn't parachuted in at the last minute to save them?

All in all I simply don't 'get' why a seemingly big fish like Luckock appears to be, along with Sharon, having such an interest in a random football club to them as we presumably are?

I don't understand why they are here?

What are there motives in all of this?

Thanks Sluffy. I'll have to take a closer look at some of these numbers. There seems to be summat decidedly fishy about the share transactions but what is Luckock's angle and how big a fish is he?

There has to be some sort of strategy.

I’m not an accountant, so I may well be misunderstanding this, but I’ve been doing a little detective work on the Companies House website. In particular I’ve been looking at the statutory accounts for year ended June 2020. Now, I realise that these are hardly very recent, but they do include on page 32 a number of post balance sheet events that I feel are revealing. In fact, my reading of the situation is that we have been entirely wrong in our understanding of how much the government lent the club and what value their shareholding has. 
To quote from the statutory accounts;
 “On 28th August 2020 Football Ventures (Whites) Limited entered into a £5m convertible loan agreement. The lenders who are parties to the convertible loan agreement are members of the shareholder consortia and UK FF Nominees Limited.”
Then, to quote from the government’s Future Fund guidelines:
“Companies can borrow between £125,000 and £5 million as convertible loans matched by the same amount raised from private investors.”
My reading of this is that £5 million was the total amount of the convertible loan - 50% of which came from the Future Fund and 50% from the investors. So, in other words, the FF paid £2.5m for 9.55% of the club - see the confirmation statement dated 17th February showing the FF owing 393,881 shares out of a total of 4,125,046.  I’m not sure where talk of an 8% share came from. Maybe something else has happened since. 
I realise some people may still consider that values the club too highly, but nothing like the £60+ million being thrown around.

Thanks for your input and research Barry, it really is appreciated.

As you say Companies House now confirms the shareholdings as at the 10th January, 2022.

The document was recorded on as you state the 17th February 202 and shows that FV had a total of 4,125,046 (£1 face value shares) existing on that day and were held as follows -

Sharon - 2,393,750 (58%)
Michael James - 882,189 (21.4%)
Luckock - 455,226 (11%)
UK FF Nominees - 393,881 (9.5%)

So it really does start to look as though the governments owns 9.5% as you say it does.

So far so good and we are both agreeing with each other so the question then revolves as to what the government paid for their shares.

The Statement of Capital filed on the 6th December shows that there were only 2,000,000 (£1 shares) existing - but on what date was that?

Although the document was 'filed' on the 6th December you will note on the document itself there is a sticky or something shown at the top of it with the date 29th October - which I believe is the relevant date to work on.

A further 2,125,046 were allotted (see the document saying Second Filing - filed on the 17th January) which lists that the 'non cash consideration' surrendered to pay for the share were a Capitalisation of a £3m loan plus interest, a Conversion of a Loan Note for £4.5m plus interest and Conversion of Loan of £5m plus interest. [Note that this form IS dated that the allotment took place on the 29th October, 2021 - so the date on the sticky on the form mentioned above must be relevant and does seem to tie in nicely with this].

The document also states that 607,623 shares were bought at £8.48476p and 1,399.566 were bought at £6.7878 (with 117,857 shares not being purchased at that point.

If we return to what the three 'considerations' were - and assuming the government bought their shares at the lowest rate - and that the £5m Conversion of Loan (plus interest) is the amount we are talking about then we get this sum...

£6.7878 divided into £5m will buy you 736,615 shares

If we use the higher amount we get this sum...

£8.48476 divided into £5m will buy you 589,292 shares

If we do it the other way around and say the government holds 393,881 then we get these sums...

393,881 x £6,7878 = £2,670,510
393,881 x £8,4876 = £3,341,980

So we know the government doesn't seem to hold 736,615 or 589,282 shares so maybe you are right and the best fit may well be a government investment of £2,500,000 (plus accrued interest) resulting in their share holding of 393,881 shares...?

You may have cracked it, well done if you have, although it still is a very poor investment for the taxpayer still - £2,5m for 400,000 shares that seem to now be worth a £1 per share - in other words a £2.1m loss of value to the taxpayer.

It also begs the question why Sharon, James and Luckock have increased their equity stake beyond what might have been required from them to secure this government investment?

It will be interesting to see what Bob might reveal once FV's latest accounts are published.

One other point. The difference in price between the two sets of shares is 20%, which is the discount FF convertible loan notes get on conversion.

Also, I’m pretty sure the £1 will be the nominal value rather than the actual value of the shares, so I doubt that’s relevant, but there are better people to confirm that (or otherwise) than me. 
As I said in an earlier post on this thread, who knows what the real value of the club is. Those 2019/20 statutory accounts do show quite a bit of goodwill and ephemeral stuff like intellectual property rights, but at least we’ve cleared quite a bit of debt, as I understand it we’re out of administration or we couldn’t have bought players and we’ve got some players on decent contracts worth some real money. 
… and I’m enjoying watching us play!

My word, what a find Barry is. He might not be an accountant but he seems to be streets ahead of most.

There's still more work to do on this but his most recent observations seem researched, rational and largely credible.

BarrygoestoBolton wrote:One other point. The difference in price between the two sets of shares is 20%, which is the discount FF convertible loan notes get on conversion.

Yes you are correct about the discount.

However if you look at the share allotment details for the 29th October,2021 then you will see that 1,399,566 shares were traded at a rate of £6.7878

Why then has the government only holding just 393,881 just over 10 weeks later on the 10th January, 2022?

Where has the other million shares gone and who bought them?

To answer my own question the shares must have gone to Sharon, James and Luckock because they (and the government bank) are the only people listed owning shares - and the share total they own combine matches the total number of shares issued in FV at that time.

How come then Sharon, James and Luckock bought shares at the governments discounted rate AND a further 607,623 at the higher rate of £8.48476?

It doesn't make sense does it - or at least not to me.

If the discounted rate is for the government then it can only be them who bought the whole 1,399,566 shares and if the government got that many shares - and FV had to match their investment - then why did Sharon, James and Luckock not have to buy a similar 1,399,566 shares at the higher price of £8.48476?

There were only a further 2,125.046 shares issued for the new share allotment and if it was an equal number allotted for the £2.5m  both sides had put up - and the government got just over 1.4m of them, then so to should have Sharon, etc - which would have meant a new share issue of just under 2.8m or in other words the allocation was around 700,000 shares less than it should have been.

I can only conclude from all this that the 20% discounted amount was not exclusively the purchase price for the government???

BarrygoestoBolton wrote:Also, I’m pretty sure the £1 will be the nominal value rather than the actual value of the shares, so I doubt that’s relevant, but there are better people to confirm that (or otherwise) than me. 
As I said in an earlier post on this thread, who knows what the real value of the club is. Those 2019/20 statutory accounts do show quite a bit of goodwill and ephemeral stuff like intellectual property rights, but at least we’ve cleared quite a bit of debt, as I understand it we’re out of administration or we couldn’t have bought players and we’ve got some players on decent contracts worth some real money. 
… and I’m enjoying watching us play!

Again you are correct, the shares issued at £1 each is the nominal price and not the actual value of the shares that can be higher or lower than the face value depending on what the market values them at, at any particular point in time.

The reason I've mentioned it so much previously was that on the 29th October just over 2 million shares were issued at £6 and £8 per share.

Prior to that date 2 million shares had been issued and purchased for £2m (or in otherwords at a £1 per share).

So at the close on the 29th October there were now just over 4m shares in existence and the trading price was (let us say to make things simple) £7 per share (being roughly the difference between the £6 per share being paid and the £8 being paid).

The thing is though is that the £7 per share price applies to the value of ALL the shares, both the new allocation and the previously existing two million already being held.

So the markets value of FV on that day was roughly £28m (4m shares valued at £7 per share).

However on the 21st January, 2022 a further 412,505 new shares were issued and sold at £1 per share - or in other words it values ALL the shares in the company NOW to hold a value of a £1 per share and so on that day FV only had a total market value of £4.6m.

Not good seeing that the government (or the government and FV combined) had just put in £5m just 10 or so weeks earlier (and another £3m and £4.5m as well on that day too - and not counting the £2m that was initially there as well!).


Something is clearly not adding up here.

I'm not suggesting anything dodgy but that other things must be in play here that we simply don't know about.

We can really only wait until the accounts are published and see if we can pick up a few clues from there.

Ten Bobsworth wrote:My word, what a find Barry is. He might not be an accountant but he seems to be streets ahead of most.

There's still more work to do on this but his most recent observations seem researched, rational and largely credible.

Praise indeed for you Barry, Bob is a hard man to please in these matters!

You are right Sluffy. Even if Barry's postulation over the UK FF Nominees position were correct it still leaves a lot of unanswered questions. Neither does it get us out of the woods.

Other than the original £2m share capital, it remains unclear who actually provided the £3m and £4.5m loans or in what proportions. These are quite large sums and FV's owners aren't oligarchs. In any event, wasn't I right in thinking that the matched funding was supposed to come from 'investors' unconnected to the main director/shareholders anyway?

In other news, Cambridge United yesterday filed their 2021 accounts. Also promoted last season, Cheltenham, had previously filed theirs whilst Morecambe are delaying probably using COVID as an excuse. Who'd have thought that Morecambe might go in for any delaying tactics?

FV has until the end of this month to file their 2021 accounts or seek an extension.

Accrington Stanley apparently had been served with a compulsory strike-off notice but it has been discontinued this morning. I'm not sure yet of the reasons but had noticed that, like FV, they were slow in submitting their annual Confirmation Statement. It should have been filed in December but was only filed last week. I'm wondering if CH are being encouraged to chase up any stragglers.

Here's an extract from the British Business Bank Q&As:


Can directors’ and employees’ investment to date count towards the £250,000 / can they also count as matched funders to the Future Fund?

No. The Investee Company must have raised at least £250,000 in equity from third-party investors in previous funding rounds in the last five years (from 1 April 2015 to 19 April 2020, inclusive). Third-party investors means investors other than any connected person of the Investee Company, any founder, employee, worker or consultant or their connected persons.  However, investment from non-executive and investment directors can count towards the £250,000 raised, and will be eligible for match funding.

[You must be registered and logged in to see this link.]

I expect that Nick Luckock and Michael James might well count as non-executive directors. Sharon ?

Ten Bobsworth wrote:You are right Sluffy. Even if Barry's postulation over the UK FF Nominees position were correct it still leaves a lot of unanswered questions. Neither does it get us out of the woods.

Other than the original £2m share capital, it remains unclear who actually provided the £3m and £4.5m loans or in what proportions. These are quite large sums and FV's owners aren't oligarchs.

I had thought about this previously and wondered that let say it was Sharon who put the £3m and £4.5m loans in, then wouldn't you expect that the share allocation would have been such that all the new shares would have gone to her (apart from those allocated to the government bank)?

The same would apply if James had put this money in all on his own, and the same for Luckock too - my point being that if Sharon, James and Luckock ALL receive allocations of the new shares (which they did)  then it would seem logical to me at least that they all put money in for them - otherwise it would seem somewhat unfair for say Sharon to put in £7.5m of her personal wealth and James and Luckock get their 'new' shares for free!

Why would anyone want to do that - I doubt anyone would?

That being the case how much would it have costs them individually and presumably the percentage of new shares they received would have reflected what they had put in?

For instance

The new shares allotted to James and Luckock were...

James 500,000 to 882,189 = 382,189
Luckock 250,000 to 455,266 = 205,266

Take Michael James as an example, he received his 382,189 and let us say they were all bought at the lowest amount of £6.7878 per share, meaning he had put in a further £2.5m

Luckock would have been something like £1.4m for his new shares, leaving Sharon with something like £3.6m being the balance.

So, including their initial share costs Sharon would now have put in something over £4.85m, James £3m and Luckock £1.65m

Fair play to them if they actually have, particularly if the true market share value is more like £1 per share as seems to be the case based on the most recent 21st January, 2022 new share allocation!!!