Questions about the Munto Finance take over off Notts County
Questions from Trust Website
Answers supplied by
John Armstrong-Holmes, Club Chairman and the Trust Board
I thought that Haydn Green had loaned us the money to buy the shares. Shouldn’t the shares be sold to the proposed new owners and the money handed over to the Haydn Green Estate? Wouldn’t that be the honourable thing to do?
Answer: Haydn Green facilitated the Trust’s acquisition of additional shares which resulted in the Trust becoming the majority shareholder. He did not loan the Trust money to acquire them. Haydn Green’s position in the Club’s history is acknowledged and will be honoured by Munto.
Are all the shareholders gifting their shares?
Answer: That is a matter for each individual shareholder but we understand they are minded to do likewise.
Exactly just how much is being invested?
Answer: It would be foolish to discuss ‘how much’ etc in the public domain. However, it is substantial and will secure the Club’s sustainability and progress for the foreseeable future and beyond.
Will any of the existing board members be on the new board after the takeover??
Answer: Following Trust members and the other shareholders agreement to the takeover, current directors will resign upon completion.
Will the money invested in to Notts be a loan that will then be lumbered back on to the club??
Answer: Munto are investing in Notts, and not lumbering the Club with loans.
What will happen to the stake of the other existing shareholders?
Answer: Following acceptance, Munto will acquire 100% of the shareholding.
If they keep them, they will, between them, hold a 40% stake in the club, which can’t be satisfactory for the new owners, as the existing shareholders have no further funds to invest and will contribute little to justify a 40% stake in a future, bigger (hopefully) business. See above.
So, that leads to question 2 (if still relevant after question 1). If the existing shareholders are not going to sell or give away their shares, will there be a further issue of shares offered to the new owners. If so, shouldn’t this be done to coincide with the Trust giving up their shares? See above.
I understand that part of the Trust’s shareholding was purchased using a loan from Haydn Green, which becomes repayable if the Trust offloads those shares. If the Trust is to “gift” its shares to the new investor, how will it repay the outstanding loan to Mr. Green’s estate?
Answer: Part of the Trust’s shareholding did not result from a loan from Haydn Green. The late Mr Green facilitated the Trust’s acquisition of the shares. Only if the Trust sells the shares does an amount fall due. Our belief is that Mr Green would approve both of the acquisition by Munto and gifting the shares. as in doing so the Club’s long term sustainability is secured.
Who will be on the Club’s Board, and what will be the management structure, after the proposed takeover?
Answer: Peter Trembling and Peter Willett have already joined the Club Board to assist the process towards acquisition. Once completed, Munto will constitute a new Board as they may determine.
Will the Trust retain any formal role in the running of the club if this deal goes through?
Answer: No. Munto will take complete control in the running of the Club.
Are any members of the Trust board benefiting as individuals from this proposed bid?
Given we (the Trust) own 60% of the club, what are we getting back in the way of guarantees for the future of the club once we gift the shares and write off the debts?
Answer: The Club/Blenheim 1862 Limited have an irrevocable guarantee from a Merchant Bank. But, it would be irresponsible to state anything other than it is for a substantial sum.
As I believe the people owning the other 40% of the club will not be gifting their shares (they are businessemen, why would they?), surely a better way of ensuring that the funds are put into the club would be to sell the Trust’s 60% at the same price and then release the funds back to the club for investment?
Answer: In effect, by gifting the Trust’s shareholding that is what will happen.
Surely any vote should be after receiving the Football League’s prior sanction that they have agreed in principle to the potential “new owners” Fit and Proper Persons Test – and any other Football League rules and regulations being satisfied.
Answer: This proposal does not require the Football League’s sanction. It will comply with the necessary regulations and, of course, be subject to the League’s ‘fit and proper test’.
I am very concerned that the offer to exchange appears to be NOT conditional – Being devils advocate, the new owners might only invest 1p once the Trust have signed everything over?
Answer: This is not the case. Whilst it is not prudent to publish an amount, it is substantial and The Club/Blenheim 1862 Limited have an irrevocable bank guarantee that Munto will invest at least this amount in the Club over the next 5 years. If Munto fail to invest the said total amount within the 5 year time frame, then the bank has to pay the Club/Blenheim 1862 Limited any difference.
Reiterating earlier posts:
How is the finance of the club being undertaken. Is it by loans – at what interest and terms / conditions?
Answer: The proposal is financial investment and is not based on loans.
We do not want to fall back into administration again. We tested the FL’s patience last time during administration, they may not be so accommodating next time, if it were to ever happen.
Answer: Munto’s proposal will secure the Club’s long term financial sustainability and enable it to progress up the Leagues.
I’m all for the takeover, but why say that Haydn Green donated the shares to the Trust when the truth is that he loaned the Trust the money to buy them? Surely there’s still a debt which the Trust owes to the Green estate of around £150k which has to be repaid if the takeover proceeds?
Answer: The truth is that Haydn Green did not loan the Trust money to acquire part of his shareholding. True, he facilitated the arrangement and if the Trust sold the shares (ie made a profit from the sale), they would have to pay Haydn Green’s estate a fixed sum. By gifting the shares, nothing becomes payable.
Would “gifting” the shares to Munto not mean that the Trust was £150k in the red?
Would this leave the Trust unable to repay the debt owed to the estate of the man who saved the club from oblivion a few years ago?
Not applicable. See above.
If the Trust is to survive in any form, it has to be in a financial state to do so, and debts potentially owed as a result of the share sale do relate to that.
Not applicable. See above.
Until my suspension from the Trust Board two months ago the rules appertaining to voting on relinquishing Trust shares was NOT a simple majority. Because of the potential consequences of relinquishing complete control the bar was set much higher.
Answer: NOT TRUE. The decision requires a majority of members to agree.
Can you confirm that you have recently changed the rules in this respect and lowered the bar for acceptance of any such offer?
Answer: The Rules have not been changed,
What would be the next step in terms of shareholder agreement?
Answer: If Munto’s proposal is accepted by all shareholders, then the original shareholder’s agreement would become obsolete.
I assume there would be a ballot, but under Trust rules would a simple majority be needed or higher?
Answer: Yes a ballot, requiring a simple majority.
Please can you confirm whether the Football League have given their prior approval to the prospective new owners, in satisfying their rules for ownership?
Answer: This proposal fulfils Football League Regulations, but will be subject to the ‘fit and proper’ test and we have no doubt that will be met.
Whilst I have an initial feeling of excitement and happiness that we might be about to see a step-change in the fortunes of Notts, I have a nagging concern that we are again not being given a full picture of what is happening. The “Middle Eastern consortium” is, perhaps inevitably, a very vague and opaque description for the prospective new owners and their apparent insistence on a full takeover would appear to include the removal of the Trust as a moderating influence on any owner. Therefore what, if anything, will be forthcoming from the Trust and club boards to allay concerns about the long term future of the club?
Answer: Hopefully, your fears will be set aside upon reading various answers to questions already given. More information will be made available over the coming days/weeks.
How much new money are we actually talking about going into the club once shares are purchased and debts are paid off, and of that how much are loans from the new owners which will have to be repaid?
Answer: It is not prudent to say publicly the amount involved, but it is substantial. The investment is not in loans.
What do the proposed new owners expect to get out of the deal – what levels, and what form, of remuneration will they be receiving, and how will that impact on the club?
Answer: In real terms very little, other than enormous pride and satisfaction from restoring the fortunes of the World’s Oldest League Club.
How will the lease of Meadow Lane be affected?
Answer: Not at all. The Club holds the sub-lease and the Haydn Green estate the Head-lease. [/COLOR]
Who are the Directors and shareholders of Munto Finance Ltd – and who ultimately controls it (or if it’s a subsidiary company, who has ownership and control of the ultimate parent company)?
Answer: It is a special acquisition vehicle, managed by a bone a fide Investment Trust.
Why is the company registered in Switzerland?
Answer: The Trustees of the Investment Fund are based there.
Where is the money coming from – if it’s been raised by loans, what are the loans secured on (and if they’re not loans from normal commercial sources where do they come from and on what terms)? Alternatively, if the funds come from the investors own resources how did they make their money – again considering the Trust’s commitment to social responsibility, you would hope any investment was generated from an ethical source.
Answer: The investment is from their own resources.
What commitments will the proposed new owners make to the principles of supporter representation and community engagement that underpin the work of the Trust?
Answer: Munto have a commitment to the community and will put in place a line of communication between them and supporters.
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Registered:: Thu 21 May 2009
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you 3 are just unbleavieable