KHFC Shareholders

[JamesH_91]

My friend lives in a house which evidently used to belong to a Harriers shareholder. I have a copy of the letter which I could upload but I'm not sure if there are any legal ramifications of doing that so I will just summarise what it says without giving numerical details and information that hasn't already been mentioned on this forum.

The club has amounts owed to Colin Gordon's company which would put the club in a precarious position if it is recalled. This is not a secret and can easily be seen in the accounts of said company in their year end financial statements as an amount owed to a related party and disclosed in the related party transaction notes.

The proposition is that an amount of that will be converted into shares to relieve the burden on the club as has been mentioned on this forum already.

The club is offering a rights issue at 50p per share to existing shareholders to join in that journey of investing in the club.

It's probably just a legal process for the club to issue shares to CGs company so the debt can then get repaid and in the process he may raise additional funds off other shareholders. I think I'm correct in saying that you have to offer a rights issue to all shareholders regardless of their holding. Any existing shareholder would have their holding diluted if they didn't take up their offer and CGs company takes up its full allotment.

[redandwhitemike]

So what are we saying here?

CG has the whole invested a certain sum of money in the club in pursuit of his 'vision' in the form of loans, and now he wants the fans to stump up the cash to repay those loans, as the revenue streams (income from gate receipts, beer etc.) are not producing the levels that will support a full time club.

That is a very basic analysis and I'm sure it's not entirely the whole story - but at the end of the day it does sound like CG is seeking to
recoup some if not all of his outlay in his project.

Or is there another angle I can't see ??

IIRC Lionel Newton wrote off his investment in KHFC

[redandwhitemike]

My friend lives in a house which evidently used to belong to a Harriers shareholder. I have a copy of the letter which I could upload but I'm not sure if there are any legal ramifications of doing that so I will just summarise what it says without giving numerical details and information that hasn't already been mentioned on this forum.

The club has amounts owed to Colin Gordon's company which would put the club in a precarious position if it is recalled. This is not a secret and can easily be seen in the accounts of said company in their year end financial statements as an amount owed to a related party and disclosed in the related party transaction notes.

The proposition is that an amount of that will be converted into shares to relieve the burden on the club as has been mentioned on this forum already.

The club is offering a rights issue at 50p per share to existing shareholders to join in that journey of investing in the club.

It's probably just a legal process for the club to issue shares to CGs company so the debt can then get repaid and in the process he may raise additional funds off other shareholders. I think I'm correct in saying that you have to offer a rights issue to all shareholders regardless of their holding. Any existing shareholder would have their holding diluted if they didn't take up their offer and CGs company takes up its full allotment.

So your friend opens mail addressed to someone else??

[Phil]

Hopefully someone will post a transcript of the letter so your 'observation' can be confirmed Mike

[JamesH_91]

My friend lives in a house which evidently used to belong to a Harriers shareholder. I have a copy of the letter which I could upload but I'm not sure if there are any legal ramifications of doing that so I will just summarise what it says without giving numerical details and information that hasn't already been mentioned on this forum.

The club has amounts owed to Colin Gordon's company which would put the club in a precarious position if it is recalled. This is not a secret and can easily be seen in the accounts of said company in their year end financial statements as an amount owed to a related party and disclosed in the related party transaction notes.

The proposition is that an amount of that will be converted into shares to relieve the burden on the club as has been mentioned on this forum already.

The club is offering a rights issue at 50p per share to existing shareholders to join in that journey of investing in the club.

It's probably just a legal process for the club to issue shares to CGs company so the debt can then get repaid and in the process he may raise additional funds off other shareholders. I think I'm correct in saying that you have to offer a rights issue to all shareholders regardless of their holding. Any existing shareholder would have their holding diluted if they didn't take up their offer and CGs company takes up its full allotment.

So your friend opens mail addressed to someone else??

Yes he does. Same as the way I open mail addressed to the old owner of my house in case it is something extremely important that needs forwarding on rather than putting in the recycle bin.

I'm not sure it is a cash grab from the fans. I'd like to see it a bit more positively in that he is going to convert his debt into shares and then anything extra would help go towards the playing budget.

He is essentially writing off the debt isn't he because in all honesty is the club ever going to have sufficient finances to pay a dividend to the shareholders to see a return on their investment.

I'm not sure why some people have so much mistrust in CG. I firmly believe he has the best interests of the club at heart.

[redandwhitemike]

My friend lives in a house which evidently used to belong to a Harriers shareholder. I have a copy of the letter which I could upload but I'm not sure if there are any legal ramifications of doing that so I will just summarise what it says without giving numerical details and information that hasn't already been mentioned on this forum.

The club has amounts owed to Colin Gordon's company which would put the club in a precarious position if it is recalled. This is not a secret and can easily be seen in the accounts of said company in their year end financial statements as an amount owed to a related party and disclosed in the related party transaction notes.

The proposition is that an amount of that will be converted into shares to relieve the burden on the club as has been mentioned on this forum already.

The club is offering a rights issue at 50p per share to existing shareholders to join in that journey of investing in the club.

It's probably just a legal process for the club to issue shares to CGs company so the debt can then get repaid and in the process he may raise additional funds off other shareholders. I think I'm correct in saying that you have to offer a rights issue to all shareholders regardless of their holding. Any existing shareholder would have their holding diluted if they didn't take up their offer and CGs company takes up its full allotment.

So your friend opens mail addressed to someone else??

Yes he does. Same as the way I open mail addressed to the old owner of my house in case it is something extremely important that needs forwarding on rather than putting in the recycle bin.

I'm not sure it is a cash grab from the fans. I'd like to see it a bit more positively in that he is going to convert his debt into shares and then anything extra would help go towards the playing budget.

He is essentially writing off the debt isn't he because in all honesty is the club ever going to have sufficient finances to pay a dividend to the shareholders to see a return on their investment.

I'm not sure why some people have so much mistrust in CG. I firmly believe he has the best interests of the club at heart.

In my experience when a person leaves a property they leave a forwarding address ??

I have no idea as to the motives of the Rights Issue - but as a rule they usually are a portent of a company desperately short of funds or a scenario where funds are required for a take over of another company - which I assume is not the case here.

At the very least it would appear that money is required by KHFC to keep the dream alive and CG is not prepared to dig any deeper into his back pocket - converting loans into shares doesn't require a fund raise from the fans.

Again, if I've misinterpreted the situation I apologise in advance.

[sprials]

What does the letter say?

I am very surprised aberred that you are not a shareholder especially given your support of CGs vision for the Club. Can I suggest that you e.mail the Chairman and ask to become a shareholder and thus support the club in its future ambitions.

Are there any spare shares available - I thought CG had taken them all?

I believe there are around 4.9million shares available at 50p each

[pershoreharrier]

What does the letter say?

I am very surprised aberred that you are not a shareholder especially given your support of CGs vision for the Club. Can I suggest that you e.mail the Chairman and ask to become a shareholder and thus support the club in its future ambitions.

Are there any spare shares available - I thought CG had taken them all?

I believe there are around 4.9million shares available at 50p each

This I understand is a new share issue and I would assume that in order to maintain total control of the Club CG would be acquiring around 2.5million shares or his Company would be to be a little more accurate. As CG's Company has already made substantial loans to the Club an initial tranche of shares from this new issue could be transferred to CGs Company for NO NEW Cash into the Club but to discharge the debt that the Club owes to CGs Company.

I believe that a review of the various accounts filed at Companies House will indicate the level of loans made by CGs Company to KHFC - it is not an inconsiderate sum. If the loan from CGs Company was recalled without the availability of new shares or the income from others purchasing new shares to cover that loan then the Club I believe would be in a severe state of financial
difficulty.

It would appear to me that CG is looking to repay the loans owed to HIS Company by the part transfer of new shares + cash generated by the sale of new shares to existing shareholders and perhaps if not fully taken up by cash from shares sold to new shareholders. There of course maybe cash left over after the debts have been settled but there is no indication of that at this time.

Perhaps of relevance to all of this is the suggestion via another thread that WFDC are going to sell the lease on the ground to CG for £1 and that could lead to the ground being sold by CG to a developer for perhaps £4 - £5million thus generating the cash to build the new stadium on the Stourport Road site. Some proper clarity (as opposed to rumour) on the position of the lease of Aggborough and the intentions of WFDC is this regard is paramount to the significance of the issue of the new shares and ultimately their destination to either existing or new shareholders.

[redandwhitemike]

What does the letter say?

I am very surprised aberred that you are not a shareholder especially given your support of CGs vision for the Club. Can I suggest that you e.mail the Chairman and ask to become a shareholder and thus support the club in its future ambitions.

Are there any spare shares available - I thought CG had taken them all?

I believe there are around 4.9million shares available at 50p each

This I understand is a new share issue and I would assume that in order to maintain total control of the Club CG would be acquiring around 2.5million shares or his Company would be to be a little more accurate. As CG's Company has already made substantial loans to the Club an initial tranche of shares from this new issue could be transferred to CGs Company for NO NEW Cash into the Club but to discharge the debt that the Club owes to CGs Company.

I believe that a review of the various accounts filed at Companies House will indicate the level of loans made by CGs Company to KHFC - it is not an inconsiderate sum. If the loan from CGs Company was recalled without the availability of new shares or the income from others purchasing new shares to cover that loan then the Club I believe would be in a severe state of financial
difficulty.

It would appear to me that CG is looking to repay the loans owed to HIS Company by the part transfer of new shares + cash generated by the sale of new shares to existing shareholders and perhaps if not fully taken up by cash from shares sold to new shareholders. There of course maybe cash left over after the debts have been settled but there is no indication of that at this time.

Perhaps of relevance to all of this is the suggestion via another thread that WFDC are going to sell the lease on the ground to CG for £1 and that could lead to the ground being sold by CG to a developer for perhaps £4 - £5million thus generating the cash to build the new stadium on the Stourport Road site. Some proper clarity (as opposed to rumour) on the position of the lease of Aggborough and the intentions of WFDC is this regard is paramount to the significance of the issue of the new shares and ultimately their destination to either existing or new shareholders.

What you are describing is in effect a debt for equity swop which is common place in the city when a company can't pay it's debts to a creditor. The question here is one of perception and an exercise in balance. Is there a reason why KHFC needs a lower level of debt on it's books- otherwise the accounting exercise makes no difference to CG's investment in KHFC - he just ends up with same (roughly) % of the club after the issue of the new shares.

I think the rules were changed a little while ago in relation to loans made by directors of football clubs and how repayment of those loans are considered, maybe someone on here can update us on the current rules??

I guess it's a game of smoke and mirrors with regards to the club's future in a different guise - one question I would ask is somewhat supplementary, but who will own the new complex at Zortech Avenue - will KHFC lease the stadium from one of CG'c companies?

Again I apologise if this has already been covered.

[pershoreharrier]

CG has borrowed money from his Company in the form of loans to put into KHFC and now wishes to pay those loans back to his Company. As I understand it the only way that requirement is being offered to be satisfied is via the offer of issuing new share capital. Part of the debt to CGs Company will be settled via receipt to his Company of new shares which unless matched by the sale of new shares to others will enhance CG's position as the major shareholder.

It would appear that current shareholders, unless they purchase new shares will find their position as part owners of KHFC weakened as the percentage of their shareholding is diluted by the new share issue. Now of course does this really matter as the shares are generally considered to be worthless? The basis of the disposal of Aggborough and the development and ownership of the proposed new Stadium on the Stourport Road would be highly relevant issues in determining the future value of those shares.

[Medieval]

"The basis of the disposal of Aggborough and the development and ownership of the proposed new Stadium on the Stourport Road would be highly relevant issues in determining the future value of those shares."

Good point. Was thinking of going along with it, but may hold back for the time being.

Would also have preferred a definite timescale at which the final payment would be requested, rather than leaving it open ended.

[redandwhitemike]

CG has borrowed money from his Company in the form of loans to put into KHFC and now wishes to pay those loans back to his Company. As I understand it the only way that requirement is being offered to be satisfied is via the offer of issuing new share capital. Part of the debt to CGs Company will be settled via receipt to his Company of new shares which unless matched by the sale of new shares to others will enhance CG's position as the major shareholder.

It would appear that current shareholders, unless they purchase new shares will find their position as part owners of KHFC weakened as the percentage of their shareholding is diluted by the new share issue. Now of course does this really matter as the shares are generally considered to be worthless? The basis of the disposal of Aggborough and the development and ownership of the proposed new Stadium on the Stourport Road would be highly relevant issues in determining the future value of those shares.

A couple of observations from your comments.

What is CG's % of the share holding in KHFC (or it's holding company)?

You suggest that Aggborough will be sold to CG in person and not the club who (technically) hold the lease?

Still can't get my head round the rationale of swapping debt for equity.

And bearing in mind CG's majority control of KHFC where is the financial incentive for further investment from others - new or existing?

[jamestheimpaler]

Colin, or G5 Sports Consulting, hold 2,615,784 shares of the 4,998,673 total. (52.3%)

Other major shareholders:

WV Allen - 309,555 - 6.1%
KHISS - 337,247 - 6.7%
Mr Lane - 703,668 - 14%
DL Reynolds - 221,704 - 4.4%
MR Serrell - 410, 704 - 8.2%

{admin edit: Link removed. Goes to a temporary file that has now expired}

[redandwhitemike]

Colin, or G5 Sports Consulting, hold 2,615,784 shares of the 4,998,673 total. (52.3%)

Other major shareholders:

WV Allen - 309,555 - 6.1%
KHISS - 337,247 - 6.7%
Mr Lane - 703,668 - 14%
DL Reynolds - 221,704 - 4.4%
MR Serrell - 410, 704 - 8.2%

{admin edit: Link removed. Goes to a temporary file that has now expired}

Thanks for taking the effort to post the numbers - are they up to date ??

[jamestheimpaler]

Yes, Mike. That's all up to date - correct as of 20/04/2018.

Not sure what happened to the obscenely long link!

For anyone who wants to see for themselves: https://beta.companieshouse.gov.uk/comp ... ng-history

View the 25 page PDF 'Confirmation statement' made on 20 April 18 - uploaded on 03 May 18.