[cite]Posted By: Ketman[/cite]Basically we are now fully safe from Admin & with everything to look forward to. We are now signing players for Fees albeit small ones, which shows we are moving in the right direction. Think this genuinely could be the turning point for CAFC as a Club after all the Doom & Gloom that has beset us the last Five years or so.
Unless you're the daily mail, or dumb as a box of rocks, we were 100% safe from admin before, I've explained it a dozen times, I can't be arsed again. Now nobody seems to be so sure where the debt sits.
Dear Shareholder,
Charlton Athletic plc (the “Company”)
Proposed Disposal of Charlton Athletic Football Company Limited (“CAFC”) and
Charlton Athletic Holdings Limited (“CAH”)
Background
Over the past three years, your board has worked tirelessly to provide the Charlton Athletic Group (the
“Group”) with the financial resources to secure its long term future success in the hugely difficult
environment of rapidly declining revenues, mounting losses and the worst global recession for decades.
During this period your board conducted a strategic review that led, in March 2008, to the creation and issue
of 48,880,367 Convertible Corporate Bonds of 30 pence each (the “Bonds”), which effectively raised
£14,664,110 from certain directors of the Company. In addition, Richard Murray, Robert Whitehand,
Derek Chappell, David Sumners, David White and David Hughes, together with former director Sir
Maurice Hatter, have continued to provide much needed working capital finance as and when required by
the Group, in a further aggregate amount of £7,000,000 (the “Directors Loans”). These directors and
bondholders have continued to defer their entitlement to be paid interest under the Bonds and the Directors
Loans. Further financial support has been provided by Richard Murray, Derek Chappell, Robert
Whitehand, David Sumners, Martin Simons and David White in the form of personal guarantees in respect
of the Group’s overdraft facility with HSBC Bank plc.
Following a full season in the third tier of English football, in which we reached the Play-off Semi Finals, we
suffered a further overall reduction in revenues and an operating loss. We forecast a further reduction and
loss for the forthcoming season, despite continued efforts to reduce overheads for the fourth consecutive
year. Against this background, your board has been engaged in a lengthy process to seek to identify a future
investor and funder of the football club. After further fruitless approaches by interested third parties to buy
the football club throughout the whole of last season and again this summer, I am writing to you today in
my capacity as the independent non-executive director on your board, to confirm that the Company has
entered into a binding contract for the sale of the entire issued share share capital in each of CAFC and
CAH to Baton 2010 Limited (the “Purchaser”), a company controlled by Richard Murray and his family
(the “Disposal”), subject to approval of the Disposal by ordinary shareholders at a general meeting of the
Company, details of which are set out below. It is a condition of the Disposal that all inter-company
indebtedness owed by each of CAFC and CAH to the Company (which at the date of this letter totals in
aggregate £18,910,800) is written off by the Company (the “Waiver of Inter-company Debt”).
The purpose of this letter is to:
(i) provide further details of the Disposal and the Waiver of Inter-company Debt;
(ii) explain why the directors of the Company consider the Disposal and the requisite Waiver of
Inter-company Debt would be most likely to promote the success of the Company for the benefit of its
members as a whole and, in particular, the creditors and employees of the Group; and
(iii) seek your support for, and approval of, the Disposal, as a substantial property transaction involving a
director or a person connected to a director and the Waiver of Inter-company Debt.
Reasons for the Disposal
On 16 August 2007 the Company announced that it had engaged the services of Seymour Pierce Limited to
assist it in connection with a strategic review with the aim of securing a sale of, or an investment in, the
Company. On 10 October 2008, the Company announced that it had received an indicative cash offer from
Zabeel Investments, a Dubai based investment company, for the shares in the Company. Within a matter of
weeks of this announcement this offer was withdrawn, for reasons connected with the then state of the
global economy. As previously stated, the ultimate outcome of this strategic review was the issue of the Bonds.
The Valley
Floyd Road
London SE7 8BL
6 August 2010
CHARLTON ATHLETIC PLC
Since that date, your board has continued to seek an investor or potential successor through a sale of the
shares in the Company and it appointed NM Rothschild & Sons Limited in this respect. As part of this
process it became clear that interest in purchasing the shares in the Company did not exist and that it would
be necessary to consider a sale structure that preserved the continued existence of CAFC and CAH through
the sale of the shares in these companies, but that ultimately resulted in the dissolution of the Company.
To this end on 14 August 2009, your board received an indicative offer for the entire issued share capital of each
of CAFC and CAH from a consortium introduced by an intermediary. Unfortunately, in the course of detailed
due diligence and legal negotiations it became clear to your board that the consortium had insufficient funds to
complete a transaction. As a direct result of the collapse of these negotiations, certain of your directors
refinanced the Group in September 2009, with support from Lombard North Central plc (“Lombard”) and
HSBC Bank plc (“HSBC”), in an aggregate amount in excess of £10,000,000 (which included the Directors
Loans). Notwithstanding further financial consolidation and extensive cost cutting exercises, including
securing revenues from player sales in a very difficult transfer market, the Group needs certainty of funding to
continue to trade. To this end, Richard Murray has agreed terms with his fellow directors and bondholders to
effect a management buy-out of CAFC and CAH. This will enable him to provide further personal financing
to the Club for the 2010/2011 season and to allow time to seek to secure further investment.
As a condition to the continued support of CAFC and CAH by Lombard and HSBC following the Disposal,
each such bank requires the Waiver of Inter-company Debt to take effect from the passing of the resolutions
proposed at the general meeting of the Company referred to below. In the light of this condition to the Sale
and having regard to the steps taken to date to secure interest in a sale of the shares in the Company, it is your
board’s view that it cannot identify any viable alternative to proceeding with the Waiver of Inter-company
Debt.
Your board has retained the services of Calimere Point Risk Advisory to advise it on the terms of the
Disposal and has been advised that in the current market for football club shares, a disposal of the shares in
CAFC and CAH based on the terms set out below is the most effective way of securing the future success of
those companies whilst fully satisfying the liabilities of the Company allowing it to be struck off voluntarily.
The Company has also secured approval to this approach from the Football League.
Proposal terms and conditions of the Disposal
The shares in CAFC and CAH will be sold by the Company to the Purchaser for a total cash consideration
of £2.00 together with the discharge and/or assumption of certain liabilities of the Company (the “Cash
Consideration”).
The holders of the Bonds have converted the entire debt represented by the Bonds (totalling £14,880,367)
into an equivalent number of £0.30 each ordinary shares in the Company. This has effectively removed this
debt from the balance sheet of the Company. The holders of the Bonds have also waived all accrued rights
to be paid interest on the Bonds up to and including the conversion date, which took place on 5 August 2010.
The Directors Loans will be novated from the Company to CAFC and CAH immediately prior to
completion of the Disposal. The terms of the Directors Loans will then be amended so that no repayments
will be made until such time as the Club returns to the Premier League. Further amendments will be made
relating to payment of interest only if the Club is competing in the Championship. The Lenders under the
Directors Loans will also waive any and all interest accrued under those Loans to the date of completion of
the Disposal and will release the Company from the security granted by it to such lenders.
CAFC and CAH are being sold:
(i) subject to the term loans, totalling in excess of £6,800,000, outstanding to Lombard as at Completion;
(ii) subject to the prior Waiver of Inter-company Debt; and
(iii) subject to all trade creditors and liabilities in each of CAFC and CAH existing as at Completion.
All liabilities and obligations of the Company to each of Lombard and HSBC, including associated security,
will be released, as will all liabilities and obligations of the Company and associated security granted by it in
respect of the Bonds and the Directors Loans.
The existing cash reserves in the Company will be sufficient to enable the Company to meet its trade
creditors as and when they fall due (including meeting the costs of the Disposal and its striking off)
following Completion until the Company is able to apply for a voluntary striking off pursuant to Section
1003 of the Companies Act 2006, which is required to be completed by 31 March 2011.
The Disposal is conditional upon the passing of an ordinary resolutions approving the Disposal (including as
a substantial property transaction under Section 190(1) of the Companies Act 2006) and the Waiver of
2
Inter-company Debt by shareholders attending a general meeting of the Company in person or by proxy, who
hold more than fifty per cent. of the equity shares being voted at that meeting. The Share Sale and Purchase
Agreement relating to the Disposal shall terminate if this condition is not met by 30 September 2010.
The Company has received irrevocable undertakings from directors and other shareholders of the Company
to vote in favour of such resolutions to approve the Disposal and the Waiver of Inter-company Debt in
respect of a total of 47,533,899 ordinary shares of £0.50 each and 46,713,700 ordinary shares of £0.30 each
in the Company representing in aggregate 83.57 per cent. (eighty three point five seven per cent.) of the
issued ordinary share capital of the Company.
Information on the Purchaser
Baton 2010 Limited is a newly formed company of which Richard Murray, Andrew Murray and Hannah
Murray are directors and shareholders.
Richard Murray is personally guaranteeing a £1,000,000 overdraft facility to be made available by HSBC to
CAFC on completion of the Disposal. Richard Murray is also providing further working capital facilities to
CAFC and CAH which are available for draw down during the 2010/2011 season.
Change of Company Name
As a condition of the Disposal, the shareholders of the Company are required to change the name of the
Company to CA plc from the date of completion of the Disposal until the date of strike off, from the
register held at Companies House, of the Company.
General Meeting
Set out at the end of this document is a notice convening a general meeting of the Company to be held in the
Millennium Suite, The Valley, Floyd Road, London SE7 8BL on 23 August 2010 at 11.00 a.m. At the
General Meeting:
(i) an ordinary resolution will be proposed to be approve the Disposal and to authorise your board to give
effect to the Disposal and to approve the Waiver of Inter-company Debt;
(ii) an ordinary resolution will be proposed to approve the Disposal as a substantial property transaction
involving a connected party of a director of the Company under Section 190(1) of the Companies Act
2006;
(iii) an ordinary resolution will be proposed to verify the allotment by your board of the 14,880,367
ordinary shares of £0.30 each in the share capital of the Company that took place on 5 August 2010 in
connection with the conversion of the Bonds; and
(iv) a special resolution will be proposed to alter the name of the Company from Charlton Athletic plc to
CA plc.
Recommendation
Your board has received financial advice from Calimere Point Risk Advisory in relation to the proposed
Disposal. In giving its financial advice to the board, Calimere Point Risk Advisory has relied on the
directors’ commercial assessment of the proposed Disposal.
In the current difficult economic conditions for football clubs outside of the Premier League and having
regard to the significant drop in revenues experienced and continuing to be experienced since the football
club’s relegation from the Premier League and then subsequently from The Championship, your board
considers that the Disposal, the Waiver of Inter-company Debt (expressed as a condition of the Disposal)
and the ultimate voluntary dissolution of the Company is the option open to it most likely to promote the
future success of the Company and that of each of CAFC and CAH, having regard to the interests of the
employees of the Group, its suppliers, customers and creditors and having regard to the Company’s and the
Group’s position in the community and to good business practice.
Yours faithfully
STUART BUTLER-GALLIE
Non-Executive Director
Crude summary (as I read it):
Directors effectively writing off ALL of their bond investments (almost £15m).
CA PLC getting £2 for sale of Club and The Valley so nought for shareholders.
New company 100% owned by Murray family.
Will take on liability of directors loans but no payments due at all in League 1, interest-only serviced if club in Championship and capital repayable only if gets back to Prem.
RM is paying virtually nothing up-front and so his cash (eg the funds raised by loan secured on Avesco shares - referred to eslewhere in thread) will presumably be available as working capital to club, supporting some (probably modest) squad strengthening.
Shareholders get to ratify deal at EGM on 23 Aug but done deal as board committed to deliver 83% in favour.
[cite]Posted By: PeanutsMolloy[/cite]Crude summary (as I read it):
Directors effectively writing off ALL of their bond investments (almost £15m).
CA PLC getting £2 for sale of Club and The Valley so nought for shareholders.
New company 100% owned by Murray family.
Will take on liability of directors loans but no payments due at all in League 1, interest-only serviced if club in Championship and capital repayable only if gets back to Prem.
RM is paying virtually nothing up-front and so his cash (eg the funds raised by loan secured on Avesco shares - referred to eslewhere in thread) will presumably be available as working capital to club, supporting some (probably modest) squad strengthening.
Shareholders get to ratify deal at EGM on 23 Aug but done deal as board committed to deliver 83% in favour.
Step 1. All bonds get converted to shares (very good for the club)
Step 2 All loans get defered until back in Premiership (Excelent for the club)
Step 3 Now the club is able to run virtually debt free we all give our shares to Mr Murray (Why?)
There must be some reason for us all giving our shares to the Murray family but I can't see what it is. The only argument I can see is that the club is not viable as a going concern, however, most fans will have bought their shares when the initial share scheem was set out at the end of 1993. At that time we had an average attendance of 7,005 and were starting to run Target 10,000 the average crown claimed at the time as required to run a viable squad in tier 2. Given that we are still achieving well over 10,000 (at considerably higher ticket prices) I don't see the reason for the share gift to Mr Murray.
I am fairly sure there must be something I am missing but from the information released I can't see what it is.
Step 1. All bonds get converted to shares (very good for the club)
Step 2 All loans get defered until back in Premiership (Excelent for the club)
Step 3 Now the club is able to run virtually debt free we all give our shares to Mr Murray (Why?)
There must be some reason for us all giving our shares to the Murray family but I can't see what it is. The only argument I can see is that the club is not viable as a going concern, however, most fans will have bought their shares when the initial share scheem was set out at the end of 1993. At that time we had an average attendance of 7,005 and were starting to run Target 10,000 the average crown claimed at the time as required to run a viable squad in tier 2. Given that we are still achieving well over 10,000 (at considerably higher ticket prices) I don't see the reason for the share gift to Mr Murray.
I am fairly sure there must be something I am missing but from the information released I can't see what it is.
Any suggestions?
We aren't giving our CA PLC shares to RM. He's buying for £2 from CA PLC all of the shaes of CAFC and CAH which are subsidiaries of CA PLC (until the deal is formalised on 23 Aug).
Reason we get nothing it that CA PLC is effectively insolvent and CA PLC shares are worthless. Even the main creditors of CA PLC (the bondholders - who rank ahead of shareholders in a winding up) are getting nothing.
Step 1. All bonds get converted to shares (very good for the club)
Step 2 All loans get defered until back in Premiership (Excelent for the club)
Step 3 Now the club is able to run virtually debt free we all give our shares to Mr Murray (Why?)
There must be some reason for us all giving our shares to the Murray family but I can't see what it is. The only argument I can see is that the club is not viable as a going concern, however, most fans will have bought their shares when the initial share scheem was set out at the end of 1993. At that time we had an average attendance of 7,005 and were starting to run Target 10,000 the average crown claimed at the time as required to run a viable squad in tier 2. Given that we are still achieving well over 10,000 (at considerably higher ticket prices) I don't see the reason for the share gift to Mr Murray.
I am fairly sure there must be something I am missing but from the information released I can't see what it is.
Any suggestions?
We aren't giving our CA PLC shares to RM. He's buying for £2 from CA PLC all of the shaes of CAFC and CAH which are subsidiaries of CA PLC (until the deal is formalised on 23 Aug).
Reason we get nothing it that CA PLC is effectively insolvent and CA PLC shares are worthless. Even the main creditors of CA PLC (the bondholders - who rank ahead of shareholders in a winding up) are getting nothing.
That is my question if the the debt and Bondholders have been removed why is Charlton Athletic PLC (CA PLC does not yet exist) insolvent.
Step 1. All bonds get converted to shares (very good for the club)
Step 2 All loans get defered until back in Premiership (Excelent for the club)
Step 3 Now the club is able to run virtually debt free we all give our shares to Mr Murray (Why?)
There must be some reason for us all giving our shares to the Murray family but I can't see what it is. The only argument I can see is that the club is not viable as a going concern, however, most fans will have bought their shares when the initial share scheem was set out at the end of 1993. At that time we had an average attendance of 7,005 and were starting to run Target 10,000 the average crown claimed at the time as required to run a viable squad in tier 2. Given that we are still achieving well over 10,000 (at considerably higher ticket prices) I don't see the reason for the share gift to Mr Murray.
I am fairly sure there must be something I am missing but from the information released I can't see what it is.
Any suggestions?
We aren't giving our CA PLC shares to RM. He's buying for £2 from CA PLC all of the shaes of CAFC and CAH which are subsidiaries of CA PLC (until the deal is formalised on 23 Aug).
Reason we get nothing it that CA PLC is effectively insolvent and CA PLC shares are worthless. Even the main creditors of CA PLC (the bondholders - who rank ahead of shareholders in a winding up) are getting nothing.
That is my question if the the debt and Bondholders have been removed why is Charlton Athletic PLC (CA PLC does not yet exist) insolvent.
It will be insolvent when all it's assets are sold to Baton 2010 so it will be wound up.
What no prepaid postage on the Proxy form ? Slags !!!! May I be the first to complain about something on the first day of the season? I am sure I wont be the last even if we win....
Step 1. All bonds get converted to shares (very good for the club)
Step 2 All loans get defered until back in Premiership (Excelent for the club)
Step 3 Now the club is able to run virtually debt free we all give our shares to Mr Murray (Why?)
There must be some reason for us all giving our shares to the Murray family but I can't see what it is. The only argument I can see is that the club is not viable as a going concern, however, most fans will have bought their shares when the initial share scheem was set out at the end of 1993. At that time we had an average attendance of 7,005 and were starting to run Target 10,000 the average crown claimed at the time as required to run a viable squad in tier 2. Given that we are still achieving well over 10,000 (at considerably higher ticket prices) I don't see the reason for the share gift to Mr Murray.
I am fairly sure there must be something I am missing but from the information released I can't see what it is.
Any suggestions?
We aren't giving our CA PLC shares to RM. He's buying for £2 from CA PLC all of the shaes of CAFC and CAH which are subsidiaries of CA PLC (until the deal is formalised on 23 Aug).
Reason we get nothing it that CA PLC is effectively insolvent and CA PLC shares are worthless. Even the main creditors of CA PLC (the bondholders - who rank ahead of shareholders in a winding up) are getting nothing.
That is my question if the the debt and Bondholders have been removed why is Charlton Athletic PLC (CA PLC does not yet exist) insolvent.
It will be insolvent when all it's assets are sold to Baton 2010 so it will be wound up.
I know. If I were to sell my house and Car to Batton for £2 I would be insolvent too. The question is why would I want to do it.
Your house and Car have a market value ie you could realistically sell them for £££.
The Shares are effectively worthless. Even if you could find a mug to buy the shares off you they would be worth £0.0001p or similar.
My understanding is that the £20 is just a nominal amount. There is no benefit to shareholders other than it frees up Murray's capital to be spent elsewhere ie on players.
As a shareholder myself I'm losing out in two ways. The money I spent is gone but personally I didn't ever expect to see that back. More importantly imho I and every other shareholder lose access to the accounts and the AGMs.
Is CA being wound up? My reading is that CA PLC will continue to exist and is the company that owns the freehold to the Valley and the training ground. The Directors have effectively exchanged their bonds for shares in this freehold. I would be surprised if Barton obtained the freehold to the Valley and the training ground for £2!
[cite]Posted By: Red_in_SE8[/cite]Is CA being wound up? My reading is that CA PLC will continue to exist and is the company that owns the freehold to the Valley and the training ground. The Directors have effectively exchanged their bonds for shares in this freehold. I would be surprised if Barton obtained the freehold to the Valley and the training ground for £2!
peanuts will correct me but my understanding is that yes, CA PLC is to be wound up.
The assets of CAFC and CAH, including the training ground and Valley, will be transferred to Baton 2010.
yes they are getting it all for £2 (thought it was £20 but not important) but have to take on all the liabilities (bank loans) and running costs (players wages, rent, rates etc) plus pay the directors back if we get to the prem.
Bit like buying an old car for £5 but then having to pay for tax, insurance, repairs, petrol, new furry dice etc. It cost you £5 but you spend a lot more than that on it.
[cite]Posted By: Red_in_SE8[/cite]Is CA being wound up? My reading is that CA PLC will continue to exist and is the company that owns the freehold to the Valley and the training ground. The Directors have effectively exchanged their bonds for shares in this freehold. I would be surprised if Barton obtained the freehold to the Valley and the training ground for £2!
peanuts will correct me but my understanding is that yes, CA PLC is to be wound up.
The assets of CAFC and CAH, including the training ground and Valley, will be transferred to Baton 2010.
yes they are getting it all for £2 (thought it was £20 but not important) but have to take on all the liabilities (bank loans) and running costs (players wages, rent, rates etc) plus pay the directors back if we get to the prem.
Bit like buying an old car for £5 but then having to pay for tax, insurance, repairs, petrol, new furry dice etc. It cost you £5 but you spend a lot more than that on it.
Technically Charlton Athletic PLC will be voluntarily struck off the Companies Register (i.e. wound up) as it will no longer have any assets or liabilities, having sold its assets to Baton and all of its liabilities having been discharged (in various ways).
Actually its not the assets of CAFC and CAH being transferred to Baton. The shares in CAFC and CAH (until now owned by CA PLC) are being sold to Baton. That means all of the assets and liabilities of CAFC and CAH will henceforth be Baton's. However, the loans (not bond obigations) due to directors by CA PLC are also being transferred to CAFC as part of the deal but will only be serviced as to interest in the Championship and as to capital and interest in the Prem.
Comments
Rude.
Part one
Dear Shareholder,
Charlton Athletic plc (the “Company”)
Proposed Disposal of Charlton Athletic Football Company Limited (“CAFC”) and
Charlton Athletic Holdings Limited (“CAH”)
Background
Over the past three years, your board has worked tirelessly to provide the Charlton Athletic Group (the
“Group”) with the financial resources to secure its long term future success in the hugely difficult
environment of rapidly declining revenues, mounting losses and the worst global recession for decades.
During this period your board conducted a strategic review that led, in March 2008, to the creation and issue
of 48,880,367 Convertible Corporate Bonds of 30 pence each (the “Bonds”), which effectively raised
£14,664,110 from certain directors of the Company. In addition, Richard Murray, Robert Whitehand,
Derek Chappell, David Sumners, David White and David Hughes, together with former director Sir
Maurice Hatter, have continued to provide much needed working capital finance as and when required by
the Group, in a further aggregate amount of £7,000,000 (the “Directors Loans”). These directors and
bondholders have continued to defer their entitlement to be paid interest under the Bonds and the Directors
Loans. Further financial support has been provided by Richard Murray, Derek Chappell, Robert
Whitehand, David Sumners, Martin Simons and David White in the form of personal guarantees in respect
of the Group’s overdraft facility with HSBC Bank plc.
Following a full season in the third tier of English football, in which we reached the Play-off Semi Finals, we
suffered a further overall reduction in revenues and an operating loss. We forecast a further reduction and
loss for the forthcoming season, despite continued efforts to reduce overheads for the fourth consecutive
year. Against this background, your board has been engaged in a lengthy process to seek to identify a future
investor and funder of the football club. After further fruitless approaches by interested third parties to buy
the football club throughout the whole of last season and again this summer, I am writing to you today in
my capacity as the independent non-executive director on your board, to confirm that the Company has
entered into a binding contract for the sale of the entire issued share share capital in each of CAFC and
CAH to Baton 2010 Limited (the “Purchaser”), a company controlled by Richard Murray and his family
(the “Disposal”), subject to approval of the Disposal by ordinary shareholders at a general meeting of the
Company, details of which are set out below. It is a condition of the Disposal that all inter-company
indebtedness owed by each of CAFC and CAH to the Company (which at the date of this letter totals in
aggregate £18,910,800) is written off by the Company (the “Waiver of Inter-company Debt”).
The purpose of this letter is to:
(i) provide further details of the Disposal and the Waiver of Inter-company Debt;
(ii) explain why the directors of the Company consider the Disposal and the requisite Waiver of
Inter-company Debt would be most likely to promote the success of the Company for the benefit of its
members as a whole and, in particular, the creditors and employees of the Group; and
(iii) seek your support for, and approval of, the Disposal, as a substantial property transaction involving a
director or a person connected to a director and the Waiver of Inter-company Debt.
Reasons for the Disposal
On 16 August 2007 the Company announced that it had engaged the services of Seymour Pierce Limited to
assist it in connection with a strategic review with the aim of securing a sale of, or an investment in, the
Company. On 10 October 2008, the Company announced that it had received an indicative cash offer from
Zabeel Investments, a Dubai based investment company, for the shares in the Company. Within a matter of
weeks of this announcement this offer was withdrawn, for reasons connected with the then state of the
global economy. As previously stated, the ultimate outcome of this strategic review was the issue of the Bonds.
The Valley
Floyd Road
London SE7 8BL
6 August 2010
CHARLTON ATHLETIC PLC
Since that date, your board has continued to seek an investor or potential successor through a sale of the
shares in the Company and it appointed NM Rothschild & Sons Limited in this respect. As part of this
process it became clear that interest in purchasing the shares in the Company did not exist and that it would
be necessary to consider a sale structure that preserved the continued existence of CAFC and CAH through
the sale of the shares in these companies, but that ultimately resulted in the dissolution of the Company.
To this end on 14 August 2009, your board received an indicative offer for the entire issued share capital of each
of CAFC and CAH from a consortium introduced by an intermediary. Unfortunately, in the course of detailed
due diligence and legal negotiations it became clear to your board that the consortium had insufficient funds to
complete a transaction. As a direct result of the collapse of these negotiations, certain of your directors
refinanced the Group in September 2009, with support from Lombard North Central plc (“Lombard”) and
HSBC Bank plc (“HSBC”), in an aggregate amount in excess of £10,000,000 (which included the Directors
Loans). Notwithstanding further financial consolidation and extensive cost cutting exercises, including
securing revenues from player sales in a very difficult transfer market, the Group needs certainty of funding to
continue to trade. To this end, Richard Murray has agreed terms with his fellow directors and bondholders to
effect a management buy-out of CAFC and CAH. This will enable him to provide further personal financing
to the Club for the 2010/2011 season and to allow time to seek to secure further investment.
As a condition to the continued support of CAFC and CAH by Lombard and HSBC following the Disposal,
each such bank requires the Waiver of Inter-company Debt to take effect from the passing of the resolutions
proposed at the general meeting of the Company referred to below. In the light of this condition to the Sale
and having regard to the steps taken to date to secure interest in a sale of the shares in the Company, it is your
board’s view that it cannot identify any viable alternative to proceeding with the Waiver of Inter-company
Debt.
Your board has retained the services of Calimere Point Risk Advisory to advise it on the terms of the
Disposal and has been advised that in the current market for football club shares, a disposal of the shares in
CAFC and CAH based on the terms set out below is the most effective way of securing the future success of
those companies whilst fully satisfying the liabilities of the Company allowing it to be struck off voluntarily.
The Company has also secured approval to this approach from the Football League.
Proposal terms and conditions of the Disposal
The shares in CAFC and CAH will be sold by the Company to the Purchaser for a total cash consideration
of £2.00 together with the discharge and/or assumption of certain liabilities of the Company (the “Cash
Consideration”).
The holders of the Bonds have converted the entire debt represented by the Bonds (totalling £14,880,367)
into an equivalent number of £0.30 each ordinary shares in the Company. This has effectively removed this
debt from the balance sheet of the Company. The holders of the Bonds have also waived all accrued rights
to be paid interest on the Bonds up to and including the conversion date, which took place on 5 August 2010.
The Directors Loans will be novated from the Company to CAFC and CAH immediately prior to
completion of the Disposal. The terms of the Directors Loans will then be amended so that no repayments
will be made until such time as the Club returns to the Premier League. Further amendments will be made
relating to payment of interest only if the Club is competing in the Championship. The Lenders under the
Directors Loans will also waive any and all interest accrued under those Loans to the date of completion of
the Disposal and will release the Company from the security granted by it to such lenders.
CAFC and CAH are being sold:
(i) subject to the term loans, totalling in excess of £6,800,000, outstanding to Lombard as at Completion;
(ii) subject to the prior Waiver of Inter-company Debt; and
(iii) subject to all trade creditors and liabilities in each of CAFC and CAH existing as at Completion.
All liabilities and obligations of the Company to each of Lombard and HSBC, including associated security,
will be released, as will all liabilities and obligations of the Company and associated security granted by it in
respect of the Bonds and the Directors Loans.
The existing cash reserves in the Company will be sufficient to enable the Company to meet its trade
creditors as and when they fall due (including meeting the costs of the Disposal and its striking off)
following Completion until the Company is able to apply for a voluntary striking off pursuant to Section
1003 of the Companies Act 2006, which is required to be completed by 31 March 2011.
The Disposal is conditional upon the passing of an ordinary resolutions approving the Disposal (including as
a substantial property transaction under Section 190(1) of the Companies Act 2006) and the Waiver of
2
Inter-company Debt by shareholders attending a general meeting of the Company in person or by proxy, who
hold more than fifty per cent. of the equity shares being voted at that meeting. The Share Sale and Purchase
Agreement relating to the Disposal shall terminate if this condition is not met by 30 September 2010.
The Company has received irrevocable undertakings from directors and other shareholders of the Company
to vote in favour of such resolutions to approve the Disposal and the Waiver of Inter-company Debt in
respect of a total of 47,533,899 ordinary shares of £0.50 each and 46,713,700 ordinary shares of £0.30 each
in the Company representing in aggregate 83.57 per cent. (eighty three point five seven per cent.) of the
issued ordinary share capital of the Company.
Information on the Purchaser
Baton 2010 Limited is a newly formed company of which Richard Murray, Andrew Murray and Hannah
Murray are directors and shareholders.
Richard Murray is personally guaranteeing a £1,000,000 overdraft facility to be made available by HSBC to
CAFC on completion of the Disposal. Richard Murray is also providing further working capital facilities to
CAFC and CAH which are available for draw down during the 2010/2011 season.
Change of Company Name
As a condition of the Disposal, the shareholders of the Company are required to change the name of the
Company to CA plc from the date of completion of the Disposal until the date of strike off, from the
register held at Companies House, of the Company.
General Meeting
Set out at the end of this document is a notice convening a general meeting of the Company to be held in the
Millennium Suite, The Valley, Floyd Road, London SE7 8BL on 23 August 2010 at 11.00 a.m. At the
General Meeting:
(i) an ordinary resolution will be proposed to be approve the Disposal and to authorise your board to give
effect to the Disposal and to approve the Waiver of Inter-company Debt;
(ii) an ordinary resolution will be proposed to approve the Disposal as a substantial property transaction
involving a connected party of a director of the Company under Section 190(1) of the Companies Act
2006;
(iii) an ordinary resolution will be proposed to verify the allotment by your board of the 14,880,367
ordinary shares of £0.30 each in the share capital of the Company that took place on 5 August 2010 in
connection with the conversion of the Bonds; and
(iv) a special resolution will be proposed to alter the name of the Company from Charlton Athletic plc to
CA plc.
Recommendation
Your board has received financial advice from Calimere Point Risk Advisory in relation to the proposed
Disposal. In giving its financial advice to the board, Calimere Point Risk Advisory has relied on the
directors’ commercial assessment of the proposed Disposal.
In the current difficult economic conditions for football clubs outside of the Premier League and having
regard to the significant drop in revenues experienced and continuing to be experienced since the football
club’s relegation from the Premier League and then subsequently from The Championship, your board
considers that the Disposal, the Waiver of Inter-company Debt (expressed as a condition of the Disposal)
and the ultimate voluntary dissolution of the Company is the option open to it most likely to promote the
future success of the Company and that of each of CAFC and CAH, having regard to the interests of the
employees of the Group, its suppliers, customers and creditors and having regard to the Company’s and the
Group’s position in the community and to good business practice.
Yours faithfully
STUART BUTLER-GALLIE
Non-Executive Director
Directors effectively writing off ALL of their bond investments (almost £15m).
CA PLC getting £2 for sale of Club and The Valley so nought for shareholders.
New company 100% owned by Murray family.
Will take on liability of directors loans but no payments due at all in League 1, interest-only serviced if club in Championship and capital repayable only if gets back to Prem.
RM is paying virtually nothing up-front and so his cash (eg the funds raised by loan secured on Avesco shares - referred to eslewhere in thread) will presumably be available as working capital to club, supporting some (probably modest) squad strengthening.
Shareholders get to ratify deal at EGM on 23 Aug but done deal as board committed to deliver 83% in favour.
Thank you Mr Murray
Thanks to ALL of the directors
Cheers Peanuts. Makes more sense now.
Anyone see the 4 x100m relay?
And everyone else whos made this possible, some big losses will have been suffered by some, lets hope it's all worth it.
COME ON YOU ADDICKS!
Yes big thank you to all the directors to walk away from the bonds etc.
Still begs the question of how the club is fundined passed this season
And we can forget about sainsbury.
There is something I'm not getting.
Step 1. All bonds get converted to shares (very good for the club)
Step 2 All loans get defered until back in Premiership (Excelent for the club)
Step 3 Now the club is able to run virtually debt free we all give our shares to Mr Murray (Why?)
There must be some reason for us all giving our shares to the Murray family but I can't see what it is. The only argument I can see is that the club is not viable as a going concern, however, most fans will have bought their shares when the initial share scheem was set out at the end of 1993. At that time we had an average attendance of 7,005 and were starting to run Target 10,000 the average crown claimed at the time as required to run a viable squad in tier 2. Given that we are still achieving well over 10,000 (at considerably higher ticket prices) I don't see the reason for the share gift to Mr Murray.
I am fairly sure there must be something I am missing but from the information released I can't see what it is.
Any suggestions?
Well said.
We aren't giving our CA PLC shares to RM. He's buying for £2 from CA PLC all of the shaes of CAFC and CAH which are subsidiaries of CA PLC (until the deal is formalised on 23 Aug).
Reason we get nothing it that CA PLC is effectively insolvent and CA PLC shares are worthless. Even the main creditors of CA PLC (the bondholders - who rank ahead of shareholders in a winding up) are getting nothing.
I can do a good deal for you : - )
That is my question if the the debt and Bondholders have been removed why is Charlton Athletic PLC (CA PLC does not yet exist) insolvent.
Of course those directors could demand their money now.
How greedy of them to wait for something that might never happen or not for many years. : - (
Yeah but by the tiem we get back you get 1.4 Billion per team so the money for the directors will be insignificant...
It will be insolvent when all it's assets are sold to Baton 2010 so it will be wound up.
So much in only two years time? ; - )
I know. If I were to sell my house and Car to Batton for £2 I would be insolvent too. The question is why would I want to do it.
The Shares are effectively worthless. Even if you could find a mug to buy the shares off you they would be worth £0.0001p or similar.
My understanding is that the £20 is just a nominal amount. There is no benefit to shareholders other than it frees up Murray's capital to be spent elsewhere ie on players.
As a shareholder myself I'm losing out in two ways. The money I spent is gone but personally I didn't ever expect to see that back. More importantly imho I and every other shareholder lose access to the accounts and the AGMs.
peanuts will correct me but my understanding is that yes, CA PLC is to be wound up.
The assets of CAFC and CAH, including the training ground and Valley, will be transferred to Baton 2010.
yes they are getting it all for £2 (thought it was £20 but not important) but have to take on all the liabilities (bank loans) and running costs (players wages, rent, rates etc) plus pay the directors back if we get to the prem.
Bit like buying an old car for £5 but then having to pay for tax, insurance, repairs, petrol, new furry dice etc. It cost you £5 but you spend a lot more than that on it.
Technically Charlton Athletic PLC will be voluntarily struck off the Companies Register (i.e. wound up) as it will no longer have any assets or liabilities, having sold its assets to Baton and all of its liabilities having been discharged (in various ways).
Actually its not the assets of CAFC and CAH being transferred to Baton. The shares in CAFC and CAH (until now owned by CA PLC) are being sold to Baton. That means all of the assets and liabilities of CAFC and CAH will henceforth be Baton's. However, the loans (not bond obigations) due to directors by CA PLC are also being transferred to CAFC as part of the deal but will only be serviced as to interest in the Championship and as to capital and interest in the Prem.