Who do you believe?

PBP have filed their 2021 accounts and in good time.

Interesting to note that PBP changed auditors to Barlow Andrews in 2019 and have had a cracking year in 2020/21.

PBP is still carrying the hotel loan in its balance sheet at £5.5million whilst saying that the security for the loan has a value in excess of £5.5million.

https://find-and-update.company-information.service.gov.uk/company/07345546/filing-history

If you don't think I'm being fanciful Bob, then I'll continue along with my thinking just a little further.

The Recovery Loan Scheme has been extended from the beginning of this year to provide a further £2m loan to small and medium size businesses.

I assume this is the definition of such?

The UK government definition of SMEs encompasses micro (less than 10 employees and an annual turnover under €2 million), small (less than 50 employees and an annual turnover under €10 million) and medium-sized (less than 250 employees and an annual turnover under €50 million) businesses.

See page 5 of the governments Small and Medium-sized Enterprises Action Plan 2020 - 2022, definition.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/961722/SME-Action-Plan.pdf

If so and assuming we have less than 250 employees (do part time staff on match days count?) then I imagine there is a further £2m to be had if FV match funded it?


I can't answer your musings about the shares but my thinking on it goes something like this...

The scheme simply says you can get up to £10m loan as long as you match fund it, if you don't/can't pay it back we will change the loan into share ownership.

We know that in 2020 FV obtained a £5m loan.

I'm not sure how the match funding worked, did having equity in the company already count towards the match funding or was an additional and 'new' amount matching the loan required to be put up?

I assumed the latter.

Whatever way it was a loan for £5m was granted in 2020.

Ok let us now move on to 2021.

Let us assume a further loan for £5m was granted in 2021 too and that this and the 2020 loan was not able to be paid back by FV within the intended deadline dates and thus converted to share ownership for the government - that would explain why they are seen on paper at least to hold £10m worth of shares in FV.

I've not read the details of the scheme but if you simplify things as much as you can - and forget about the share values - then the current position is that there are a total of 4,125,046 shares for FV which the government owns 1,399,566 and FV 752,480 from the allotment of new shares (2,125,046) AND an existing 2,000,000 million held by FV.

So FV now own 2,752,046 shares and the government 1,399,566

EDIT - Skip the next two paras and continue on to my later post below as I think I've cracked my own question I posed in these two paras below.

If the calculations value the governments shares to be worth £10m then I presume the new shares to FV valued at £6m forms part of the equal matching requirement by FV and maybe the remaining matching is considered to be the rise in value of their existing shares?

I'm floundering at this point but it does seem that the government has put £10m in - hence why they are shown to own £10m worth of shares - but FV seems not to have matched it, if you don't take into account existing equity in the company?

One thing that has popped into my head since my post above is why are there 117,858 of FV's new share allocation not been 'taken up'?

I had assumed (wrongly I now believe) that these were the shares allocated to the 750,000 shares that FV (the company) owned after 'buying them back'.  

That can't be though because on the new share allocation form it summarises at the bottom that the new share issue brings the total shares in FV to 4,125,046.

The new shares being allocated being 2,125,046 meaning prior to the allocation there was only 2,000,000 in existence.

We know there was at one time 2,750,000 shares of which FV (the company) had bought back so it also means the Statement of Capital for Reduction (as it is titled) filed at CH on the 6th December, stating there was only 2,000,000 shares at that point in time must have taken place BEFORE the allocation as per the Statement of Capital following an allotment of shares.

I'd also assumed that the shares would be 'owned' by FV but if they have not been paid for then I assume no one actually owns them???

It certainly isn't the government because the shares are shown to be at £8 per share whilst we know the government only pays £6 per share.

As share allocation is based on a pro-rata basis per existing shareholders it would seem to me that one or a combination of Sharon, Mike James and or Luckock have not taken up their full allocation allotted to them - and further more one or more of the existing shareholders haven't stepped in to buy them - thus showing them (at the time) to be unsold (and ownerless)???


Also I think I might have misunderstood the matched funding element too?

The matched funding element is definitely there in respect of the Recovery Loan Scheme (RLS) BUT the scheme only started on the 6th April, 2021.

FV received a £5m loan from the government (or more likely 'backed' by the government - there were/are a number of approved lenders such as RBS, Lloyds, etc for RLS) on 28th August, 2020!

There were a number of government schemes set up at the time in 2020, one of which was the Coronavirus Business Interruption Loan Scheme (CBILS).

https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/cbils-faqs-for-smes/

As far as I can understand it there was no requirement to provide a matching amount to access the loan - which was for any amount up to a maximum of £5m.

This being the case it does seem more than likely that 2020 loan for £5m did not require match funding, but the 2021 £5m loan did, and that is why the two loans from the government totalling £10m has together with the match funding by FV of £5m (for the second loan only) have all been rolled together to form the £15m new share allocation that took place.

I'm still troubled as to why 117,857 shares of this new allocation don't seemed to have been paid for (amounting to £1m) although the 607,623 that have been paid for amounting to £5,155,535 fulfils FV's obligation to match fund the second £5m loan.

Hope all this helps Bob?

Thanks Sluffy. It does help. Quite a lot actually.

Its all very confusing for sure but it does seem possible that FV have obtained more than £5m in COVID-related loans. I think we can also take it that the 117,857 shares (£1m) weren't the conversion of any loan. If they were they would have been paid for. It looks like a makeweight to me.

The discounted/government shares have been given a value of £9.5m which seems to comprise the £5m COVID loan plus £4.5m. I'm tempted to think that the £9.5m matches the £2m share capital as previously plus the £4.5m and £3m FV shareholder loans.

I think we may no more when FV file their next Confirmation Statement. Its due to be filed by tomorrow. It was late last year; lets see what happens this time around.

I expect Cowgills will have been involved in applying for COVID funding (loans and furlough grants). Could that help explain why Sharon was so pleased with Jason Elliott?
.

EDIT - I note you have significantly amended your post above whilst I've been typing this but I'll still post my reply as we seem to be arriving to similar views independently from each other.

I think I may have picked up on a few points you haven't so it's good to see if you go along with my views on these or point out the flaws they may contain.



I think I better understand the 80% 'discount' now Bob - it isn't a discount but a 'guarantee'.

The British Business Bank DOESN'T loan any money (and so it is a bit misleading to talk of 'government loans' as such), what they seem to do instead is to 'guarantee' to 'government approved lenders' - the 'banks' - to underwrite 80% of the loan.

The following example is taken from the link in my last post in respect of the first £4.5m borrowed (NOT £5m as I had been assuming) under the CBILS system

A worked example to show what this change will mean in practice:

£1 million facility
Business pays off £400,000, then defaults, owing £600,000
Lender recovers £100,000 from other business assets secured, such as a debenture (e.g. stock), leaving £500,000 outstanding
Call on personal guarantee is £100,000 (20% – not the full £500,000 as previously), leaving £400,000 as a loss
Government covers £320,000, lender loses £80,000

I assume something similar is done under RLS scheme for the £5m borrowed (the 2021 loan, which did require matched funding) in respect of rolling the loans into shares - although I don't know enough about shares and all they entail to state that as a certainty.


I also now believe we are wrong to have assumed that the £4.5m (plus accrued interest) loan note is part of FV's match funding contribution.

I now believe it to be the 2020 loan.

That together with the £5m conversion of a loan (plus accrued interest) forms the £9.5m (NOT £10m as I've been assuming) FV have accessed (from a 'bank') under the two government schemes.

To 'match fund' for the 2021 £5m loan (there was NO match funding required for the 2020 loan) FV only had to buy an additional £3m more shares (at £1 per share) to add to their already existing £2m shares (at £1 per share) hence the total being the required £5m matched funding.


I still can't crack the 117,857 unallocated shares though?

I think they 'exist' (on paper at least) because of the way the calculation for the share allocation and price per share valuation was arrived at and in theory are part of FV's existing share owners allotment allocation but as Sharon, James and Luckock had already met their obligation to match funding by purchasing the £3m more shares required, there was no need to buy the further shares.

Similarly the governments approved lenders of the two loans have no interest in buying them and no one on the open market would dream of buying them at £8 per share, so I assume they just lie on the record as 'existing' but unowned.

I don't know how these things work but the obvious thing to do it seems to me is one day to go down the route of obtaining a Statement of Capital for Reduction and 'write' the shares off that way?

Thanks Sluffy. I amended my previous post as one or two pieces of the jigsaw seemed to fall into place.

It looks like FV may have pulled in more COVID loan funding than previously suspected and that the amount may be as much as £9.5m, not £5m. The £5m never did seem enough to fund the EDT settlement, expected losses and further investment in the squad.

It will be very interesting to see the latest Confirmation Statement when it appears. It shouldn't be long and should tell us whose name the 'discounted shares' are registered in and who got the other recently issued shares, including the 117,857 that have yet to be paid for.

It will also be interesting to see how all this will be reflected in the audited accounts but I expect we may have to wait a bit longer for those.

I wonder which other owners/clubs have benefited from similarly large amounts of COVID cash. FGR's owner seems to be one but I don't know of any others at the moment.

Thank you Bob as without your knowledge and questioning I simply wouldn't have even attempted to know or understand what was going on.

It was you who set me on the thought process of believing that it was Covid funding which was the instigator behind all the recent stuff FV has been doing and you again, correcting several of my assumptions along the way that in turn led me to the thinking things through differently (and the further research I based on that revised thinking) that has led to my most recent posts above.

I think combined we have got close to what has actually happened.

I definitely could not have done that on my own.

I think it is beyond doubt now that Covid loans to the tune of £9.5m have been taken out from the 'banks'.

I'm not certain of how the 80% security is guaranteed by the government in respect of the loans now converted to equity but there must be some method of certainty otherwise the 'banks' would not have done so.

The 'banks' must want a return on their lending and there's no value in the shares they now hold in that the total debts of FV are greater than the total assets they now (as a significant shareholder) own.

I guess the 'banks' are more 'investment' banking than the 'high street' type banks we are more familiar with and this is more about longer term capital investment to them?

As it stands as far as I am aware, FV still hold a combined majority share holding. I would imagine though there must be some process that give the banks as shareholders some form of say in the running of FV and wonder if sooner or later we will see them appointing a Director to represent their position (although I imagine there's probably thousands of companies the banks now (unexpectedly) hold shares in!).

I tend to think that all this have 'locked' in Sharon, James and Luckock to FV as they have no secured creditor arrangements and their shares for now are basically worthless.

In order to get their money back they would need someone to buy the club for £14.5m to pay off their combined £5m equity and the £9.5m of the banks, even before taking on whatever debts the club may have at the time.

But what do I know, financial logic seems to fly out of the window when it comes to buying a football club.

Thanks Sluffy. Your help's been much appreciated.

I'm not quite sure we have 'solved the wall' yet. The way I'm seeing it is an 'investment' of £9.5m of COVID money plus £9.5m of FV shareholders money with another £1m due from somebody.

The 'bank/government' seems to have 34% and FV shareholders 66% but it still doesn't explain why £4.5m plus £3m (plus interest) equals only £5,155K of new FV shares.

Thanks Bob.

To my mind Bob it all revolves around what the £4.5m (plus interest) loan is.

I believe that it is the first Covid loan (which didn't require the match funding element to access it).

If it is and the loan was subsequently converted to shares then perhaps the shares are issued in the name of the lender (the bank) - and NOT the recipient (FV) as I had wrongly(?) assumed it to be.

If so that would mean that there would be three distinct 'named' 'groupings' of shareholders...

The first being FV who had to 'match fund' the second Covid loan and did so buy putting in an additional £3m to go with their existing £2m worth of shares,

the next being the 'government' (or rather the approved 'bank' lender)' for the second Covid loan that required the match funding - to the sum of £5m and,

the third being the 'bank'* in respect of the first loan of £4.5m (plus accruing interest).

The total shares combined would still be the same and the split would still be 66%/34% but in the 'banks'/governments favour and not FV.

It might well be that the second and third of the three 'groupings' could be one and the same entity as such BUT if so they needed to be treated separately from each other for this reason...

[* It has to be a 'bank' (or at least differentiated in some way or other) and NOT the government per se, otherwise the shares would be priced at £6 and not £8 as showing on the document filed at CH - presumably the governments 'guaranteed' 'discount' is still contained in the terms of the original loan agreement - and that is why a 'discount' on the share price would have meant it being offered twice against the same loan?].


I believe the process of what happened went something like this -

A new issue of shares is made, the calculation is done KNOWING exactly how many new shares are needed for the allotment - ie ALL the shares will be needed for ultimate allotment - the 117,000 are NOT a balancing amount as such.

FV buys up their £3m worth as existing share holders - they already own £2m worth of shares (to amount to £5m shares (at £1 per share) which equates to the match funding total required to get the second Covid loan of £5m),

the government/bank takes ownership of the next £5m worth of shares (being for the 'second' Covid loan - and the only one of the two Covid loans taken that required matched funding) and then,

lastly the government/'bank' is then 'allowed'(?) to swop the first Covid loan (£4.5m plus interest) to shares.


The first Covid loan I'm guessing is valued at the amount that will be paid to it on maturity - ie will include the interest - so although the loan was for £4.5m, with interest added its 'end' worth on 'maturity' will be £5.5m(?)**

[** Iirc correctly the interest was 8% pa - I don't know if it is compounded or not but I'm guessing (I've not done the sums) that it will end up totalling to a £1m(?)]

So shares for the value of £5.5m have to be issued although only shares to the value of £4.5m can be allotted for now (as that is the loans value at this stage).

This leaves (at this point in time) a surplus the 117,000 shares yet to be allotted which equates to the same value of the £1m interest that would accrue over the term of the original loan.

I presume as each year the loan matures, then each year more of these 117,000 are issued to it and as the loan value increased due to the interest falling due - it 'consumes' more of the unallocated allocation allotted to it - so that at the end of the term the loan value would be £5.5m and all of the unallocated' shares showing now, will be fully allocated to it by the time of its maturity - or allocated whatever date the interest becomes payable as per the original terms of the contract for this first Covid loan (which may perhaps be at the time of the end settlement date rather than annually payments?).


I think that explains most likely what has happened unless you can see any fatal flaws with my reasoning?

The three things that didn't make sense to me...

- why were 117,000 shares left over when really there is only the government and FV involved in all of this? [all the shares will be required]

- why did a £4.5m loan that had a reasonable chance of being paid back get converted in to (effectively) junk bonds, that are very, very unlikely to be paid back, [it IS the government loan and not FV equity] and,

- why if the government put £9.5m in for shares and FV only £5m do FV end up owning 66% and the government 34%??? [the government and not FV have the majority shareholding]

...I can now give a plausible explanation for.


I await with interest your thoughts on this.

Still no confirmation statement at Companies House but Lord Agnew's hopping mad  at the 'lamentable' oversight of COVID loan schemes.

 We still don't know exactly who has paid £9.5million for 34% of BWFC but it looks like its got the hands of the British Business Bank all over it. I expect the same goes for Dale Vince but for quite a bit more in his case.

https://news.sky.com/story/treasury-minister-lord-agnew-resigns-over-governments-lamentable-record-on-tackling-covid-business-loan-fraud-12524460

No suggestion of fraud at the Unibol but it still looks woeful for the taxpayer.

Sorry that I've not commented on your last posting, Sluffy, but I think its better to await the confirmation statement to see whose names the shares are registered in and who effectively holds the balance of power. I suspect its still Sharon and her associates but anyone with a 34% shareholding ought to have representation at board level, as you have intimated previously.

The confirmation statement is late again. That might be inefficiency though it may also be tactical.

Congratulations to the Supporters Trust. It has produced its 2021 accounts and sent them to members a day in advance of its AGM tomorrow. Not that there's much too 'em mind you but the board member who wanted to 'get rid of these people' has departed himself, along with a couple of others.

Apparently:
'The objectives of the Society are to strengthen the bonds between the supporters and the football club and to achieve the maximum possible influence of the members in the running and ownership of the club'.

All very laudable except that there was a major change in share ownership three months back and neither the club nor the Supporters Trust have told us who the new shareholders are or how many shares the old shareholders now own.

Ten Bobsworth wrote:Sorry that I've not commented on your last posting, Sluffy, but I think its better to await the confirmation statement to see whose names the shares are registered in and who effectively holds the balance of power. I suspect its still Sharon and her associates but anyone with a 34% shareholding ought to have representation at board level, as you have intimated previously.

The confirmation statement is late again. That might be inefficiency though it may also be tactical.

No problem Bob.

I must have missed that there was a confirmation statement due?

Hopefully it will clear things up...

...or take us to yet another puzzle for us to try and fathom out!

Ah, I see it now!

Confirmation statement
Next statement date 10 January 2022
due by 24 January 2022

Last statement dated 10 January 2021


If previous years are to go by then it won't be anytime soon!

Due 10th Jan 2020 - filed 21st Jan 2020
Due 10th Jan 2021- filed 14th Feb 2021

Sluffy wrote:Ah, I see it now!

Confirmation statement
Next statement date 10 January 2022
due by 24 January 2022

Last statement dated 10 January 2021


If previous years are to go by then it won't be anytime soon!

Due 10th Jan 2020 - filed 21st Jan 2020
Due 10th Jan 2021- filed 14th Feb 2021

Its due by 24 January each year for FVWL.

A company's accountants or auditors will often remind company directors or secretaries of the due date so they don't forget. I got such a reminder this week from the accountants I deal with, a few days in advance of the due date for the company concerned,.

FVWL were on time in 2020 but about three weeks late in 2021.

Ten Bobsworth wrote:

Sluffy wrote:Ah, I see it now!

Confirmation statement
Next statement date 10 January 2022
due by 24 January 2022

Last statement dated 10 January 2021


If previous years are to go by then it won't be anytime soon!

Due 10th Jan 2020 - filed 21st Jan 2020
Due 10th Jan 2021- filed 14th Feb 2021

Its due by 24 January each year for FVWL.

A company's accountants or auditors will often remind company directors or secretaries of the due date so they don't forget. I got such a reminder this week from the accountants I deal with, a few days in advance of the due date for the company concerned,.

FVWL were on time in 2020 but about three weeks late in 2021.

Sorry Bob, I should have wrote 'made on' and not 'due' - my mistake.

The 10th of January this year is a Monday, so was a Sunday the previous year and Friday in 2020 (leap year) - so by that pattern it is more than likely the statement has already been 'made' but presumably not yet 'sent'(?).

If so what is the benefit to FV (or any company come to that) in delaying their submission as you suggest FV might be doing so as a tactic?

Surely it is unlikely that the ownership as on the 10th January is changed immediately after that date - and before the 24th?

Sluffy wrote:

Sorry Bob, I should have wrote 'made on' and not 'due' - my mistake.

The 10th of January this year is a Monday, so was a Sunday the previous year and Friday in 2020 (leap year) - so by that pattern it is more than likely the statement has already been 'made' but presumably not yet 'sent'(?).

If so what is the benefit to FV (or any company come to that) in delaying their submission as you suggest FV might be doing so as a tactic?

Surely it is unlikely that the ownership as on the 10th January is changed immediately after that date - and before the 24th?

The confirmation statement is a statement of the position at a certain date in time. In FV's case the 10th January each year. You are allowed 14 days to submit it. Often there's not much change but in this year there has been a major change in shareholdings.

Why would FV want to keep it under wraps? They might like folk to think one thing when the reality is very different. In this case it looks like half the company's capital has been provided by the UK taxpayer on very advantageous terms to FV.

The only other club owner that's benefited from this kind of subsidy so far as I am presently aware is Dale Vince. You know, the man who threatened to put BWFC into liquidation over the Doidge affair.

I'm back to being all confused again!

The following article from the Telegraph is saying (if I understand it correctly) that the first loan (Future Fund) has been converted into shares BUT it required matched funding to do so.

It seems that we also had a Recovery Loan Scheme loan of £5m additional to the first loan (stated to be for £5m) in 2021 which also required matched funding - if all that was correct FV should own half of all the shares in the company and the government the other half?

The report states that the government (Future Fund) loan for £5m is for 8% of the shares???

It doesn't sound right to me?

Anyway the article and a link to the Future Fund - but note this can't be the latest article from them because it only refers to converted loans as of August 2021 and ours seemed to have taken place in October 2021?



The British Business Bank’s latest update on the £1.1bn Future Fund, a Covid support scheme, showed club owner Football Ventures (Whites) Ltd among 108 companies that converted the emergency loans into shares rather than repay them.

A total of 1,190 companies took convertible loans from the British Business Bank under the scheme that closed a year ago, with 265 firms giving shares to the taxpayer in return since then.

The Future Fund was designed to support “innovative UK companies that typically rely on equity investment to fund their growth” according to the bank, which now owns an 8pc stake in a founder member of the Football League in 1888.

Bolton has been under new ownership since August 2019 after collapsing into administration almost three years ago.

The team, which is in 15th place in League One, racked up a £3.9m pre-tax loss in the year to June 2020. It took the £5m loan from the Fund in August 2020 and converted the loan to shares in October.

A club spokesman said the loan was “captured in our articles and aligned with the plan for ensuring Bolton has a stronger and sustainable future”.

A British Business Bank spokesman said: “The Future Fund used a set of standard terms with published eligibility criteria. The process provided a clear, efficient way to make funding available as widely and as swiftly as possible without the need for lengthy negotiations. Applications that met all the eligibility criteria received investment.”

The British Business Bank has been accused by MPs on the Public Accounts Committee of “woefully inadequate” due diligence over Covid loans to Greensill Capital, the finance firm advised by David Cameron which collapsed last year.

Other companies in which the Future Fund is now a shareholder include Organox, a medical company that has developed technology for storing livers for transplants; saving and investing fintech firm Plum; and sustainable fashion app Save Your Wardrobe.

Ken Cooper, a managing director at the taxpayer-backed bank, said the fund was designed to create “long-term value for the UK taxpayer”.

He added: “We’re delighted to see so many companies already going on to raise further private sector capital. As a shareholder in so many promising businesses, the Future Fund is well positioned to share in the benefits of their continued growth.”

https://www.telegraph.co.uk/football/2020/03/30/bolton-warn-potential-job-losses-father-ceo-dies-covid-19/

https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/future-fund/

Iles our go to football financial advisor comments -

Well, to my untrained eye, it is compared to taking out a loan secured against assets. I'm happy to hear the alternate view.

— Marc Iles (@MarcIles) January 26, 2022

Although he says this about the 8%

So, FV have converted the £5m Covid loan from Future Funds into shares (eight per cent of company). Falls under the 10 per cent rule, which would have required EFL permission, I believe.
Doesn't stop them making decisions but reduces potential pay out. #bwfc

— Marc Iles (@MarcIles) January 26, 2022

The esteemed Iles is completely useless as ever but the truth is that, until FV come clean, we won't know the true facts. They should have filed their statement by close of play on 24 January 2022.