| Creating equity? 22:23 - Sep 4 with 4071 views | jackrmee |
What the hell does that mean and how is it done?
I read about Tan doing it for the scummers and now there's talk of the (alleged) moneysnatchers doing it for us. |  |
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| Creating equity? on 22:39 - Sep 4 with 3070 views | longlostjack |
I guess by issuing new shares to the 27 investors. Sounds like a veiled threat to the Trust as it would dilute the value of their shareholding. Maybe there are legal safeguards to stop that happening. Cue Lisa and Shaky. [Post edited 5 Sep 2018 9:44]
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| Creating equity? on 23:01 - Sep 4 with 3020 views | awayjack |
It’s fairly simple to issue new shares. The complexity is usually at what value and if other shareholders - in our case the Trust - take up any pre-emption rights. This is their ability to buy shares at same value, so not to dilute their 21% shareholding.
As an example - made up numbers just to illustrate:
Shareholders plan to raise £15m at £30m value.
Trust (should) have right to take up 21%, so put in £3.1m.
If the Trust don’t buy, their holding is diluted to circa 14%.
It’s a classic way for wealthier majority shareholders to dilute others at lower values. In our case the Trust doesn’t have much cash, so would need to raise money notwithstanding the mediation.
An even worst case scenario is when convertible debt / loans are issued. Again classic way for institutional investors to get larger share of equity if the company underperforms. Trust shouldn’t let the Yanks go anywhere near this. |  | | |
| Creating equity? on 23:03 - Sep 4 with 3008 views | pembsjack |
Surely if that's the case, that cant be done until the mediation between the trust and americans is completed? |  | | |
| Creating equity? on 05:36 - Sep 5 with 2841 views | Kilkennyjack |
| Creating equity? on 23:01 - Sep 4 by awayjack |
It’s fairly simple to issue new shares. The complexity is usually at what value and if other shareholders - in our case the Trust - take up any pre-emption rights. This is their ability to buy shares at same value, so not to dilute their 21% shareholding.
As an example - made up numbers just to illustrate:
Shareholders plan to raise £15m at £30m value.
Trust (should) have right to take up 21%, so put in £3.1m.
If the Trust don’t buy, their holding is diluted to circa 14%.
It’s a classic way for wealthier majority shareholders to dilute others at lower values. In our case the Trust doesn’t have much cash, so would need to raise money notwithstanding the mediation.
An even worst case scenario is when convertible debt / loans are issued. Again classic way for institutional investors to get larger share of equity if the company underperforms. Trust shouldn’t let the Yanks go anywhere near this. |
Thanks.
Why do this now though ?
Where does the new money in go ?
Can you explan - raise £15m at £30m value ? |  |
| Beware of the Risen People
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| Creating equity? on 06:15 - Sep 5 with 2811 views | peenemunde |
| Creating equity? on 05:36 - Sep 5 by Kilkennyjack |
Thanks.
Why do this now though ?
Where does the new money in go ?
Can you explan - raise £15m at £30m value ? |
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| Creating equity? on 07:55 - Sep 5 with 2662 views | Shaky |
| Creating equity? on 05:36 - Sep 5 by Kilkennyjack |
Thanks.
Why do this now though ?
Where does the new money in go ?
Can you explan - raise £15m at £30m value ? |
Awayjack's example is mechanically correct.
In his example. the club is valued at £30 million today.
Shareholders wish to raise £15 million in new money which goes to the club to be used for whatever purpose, in return for new shares.
That means after the hypothetical issue of shares the club will me worth £45 million, with the new shareholders owning £15m out of £45m = 33.3% of the club.
The problem here is that currently the club is not worth anything remotely in the region of £30m.
Another thread details how Barclays have been given the rights to the majority of the club's revenue for the next 2 years. What would you pay for a business where all the revenue for the next 2 years belongs to somebody else?
Not very much is the answer. Hard to say exactly how much it is worth without seeing a balance sheet that shows the precise level of debt, but £10 million is likely the best possible scenario currently. However, zero and even a negative value are absolutely possible depending on the Trust's course of action over the unfair prejudice claim.
BTW, as far as i recall the new articles of association have abolished preemption rights which means there is no obligation to offer any new shares sold to the Trust, merely to ensure that they are priced in a way that does not unduly disadvantage them |  |
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| Creating equity? on 08:33 - Sep 5 with 2594 views | awayjack |
| Creating equity? on 07:55 - Sep 5 by Shaky |
Awayjack's example is mechanically correct.
In his example. the club is valued at £30 million today.
Shareholders wish to raise £15 million in new money which goes to the club to be used for whatever purpose, in return for new shares.
That means after the hypothetical issue of shares the club will me worth £45 million, with the new shareholders owning £15m out of £45m = 33.3% of the club.
The problem here is that currently the club is not worth anything remotely in the region of £30m.
Another thread details how Barclays have been given the rights to the majority of the club's revenue for the next 2 years. What would you pay for a business where all the revenue for the next 2 years belongs to somebody else?
Not very much is the answer. Hard to say exactly how much it is worth without seeing a balance sheet that shows the precise level of debt, but £10 million is likely the best possible scenario currently. However, zero and even a negative value are absolutely possible depending on the Trust's course of action over the unfair prejudice claim.
BTW, as far as i recall the new articles of association have abolished preemption rights which means there is no obligation to offer any new shares sold to the Trust, merely to ensure that they are priced in a way that does not unduly disadvantage them |
Hadn’t picked up that pre-emption rights had been removed. That’s a warning sign in itself about motives and surely the Trust experts would have fought tooth and nail to stop this. Worrying times. | | | |
| Creating equity? on 08:36 - Sep 5 with 2581 views | omarjack |
A bit off topic, actually a lot off topic..
But why is the club being valued at around 10 m? I thought that's the value of our training facilities only. |  |
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| Creating equity? on 09:07 - Sep 5 with 2536 views | felixstowe_jack |
Note TAN has not created extra equity. He owns the Cardiff 100%. Cardiff did have £200m of debts which breaks both the Pl and EFL fair pay rules. He has written off £100m of the debt as he is allowed to do so under fair play rules. but he still has the same amount of equity 100%.
he has learned the lessons form the last time Cardiff gained promotion and gambled by signing a lot players on high wages which resulted in a huge loss for tan.
This season he has a championship squad on championship wages and when cardiff are relegated they will make a profit of at least £50m. With parachute payments it will mean Cardiff will make around £100m over the next three seasons and will be able to repay most of the money they owe to Tan.
A True equity increase would be if all the company asks to increase it's number of shares by say 50% and asks all shareholders to buy up their entitlement with any remaining shares put up for general sale. | |
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| Creating equity? on 09:37 - Sep 5 with 2485 views | Shaky |
| Creating equity? on 09:07 - Sep 5 by felixstowe_jack |
Note TAN has not created extra equity. He owns the Cardiff 100%. Cardiff did have £200m of debts which breaks both the Pl and EFL fair pay rules. He has written off £100m of the debt as he is allowed to do so under fair play rules. but he still has the same amount of equity 100%.
he has learned the lessons form the last time Cardiff gained promotion and gambled by signing a lot players on high wages which resulted in a huge loss for tan.
This season he has a championship squad on championship wages and when cardiff are relegated they will make a profit of at least £50m. With parachute payments it will mean Cardiff will make around £100m over the next three seasons and will be able to repay most of the money they owe to Tan.
A True equity increase would be if all the company asks to increase it's number of shares by say 50% and asks all shareholders to buy up their entitlement with any remaining shares put up for general sale. |
Nonsense. | |
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| Creating equity? on 09:51 - Sep 5 with 2448 views | Shaky |
| Creating equity? on 08:36 - Sep 5 by omarjack |
A bit off topic, actually a lot off topic..
But why is the club being valued at around 10 m? I thought that's the value of our training facilities only. |
Let's say you buy a car for your business at a cost of £10,000.
You are going to hammer it and so you estimate you will get 5 years worth of motoring out of it. That means you will depreciate the asset on your books by £2k each year, so after the end of the first year it has a Net Book Value of £8k.
But in reality you know that the market value of a new car drops by perhaps 40% as soon as you drive it off the dealer forecourt.
As such there is a mismatch between the book value in the accounts and the market value.
That happens all the time in business, and to far more complex degrees. Furthermore to get a sensible estimate of the value of the shares in a business - the ownership equity - you have to deduct all the debts.
And in the case of Swansea there are is quite a lot of that stuff in various shapes and forms. | |
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| Creating equity? on 09:52 - Sep 5 with 2448 views | A_Fans_Dad |
| Creating equity? on 07:55 - Sep 5 by Shaky |
Awayjack's example is mechanically correct.
In his example. the club is valued at £30 million today.
Shareholders wish to raise £15 million in new money which goes to the club to be used for whatever purpose, in return for new shares.
That means after the hypothetical issue of shares the club will me worth £45 million, with the new shareholders owning £15m out of £45m = 33.3% of the club.
The problem here is that currently the club is not worth anything remotely in the region of £30m.
Another thread details how Barclays have been given the rights to the majority of the club's revenue for the next 2 years. What would you pay for a business where all the revenue for the next 2 years belongs to somebody else?
Not very much is the answer. Hard to say exactly how much it is worth without seeing a balance sheet that shows the precise level of debt, but £10 million is likely the best possible scenario currently. However, zero and even a negative value are absolutely possible depending on the Trust's course of action over the unfair prejudice claim.
BTW, as far as i recall the new articles of association have abolished preemption rights which means there is no obligation to offer any new shares sold to the Trust, merely to ensure that they are priced in a way that does not unduly disadvantage them |
"as far as i recall the new articles of association have abolished preemption rights which means there is no obligation to offer any new shares sold to the Trust"
Is that
02 Nov 2017 Resolutions Resolution of adoption of Articles of Association
where it was signed by just Huw Jenkins as "Being the sole member of the company entitled to vote on the above resolution"
If so how can he possibly be the only member entitled to vote? | | | |
| Creating equity? on 10:07 - Sep 5 with 2419 views | Loyal |
So basically they are cnts then. |  |
| Nolan sympathiser, clout expert, personal friend of Leigh Dineen, advocate and enforcer of porridge swallows.
The official inventor of the tit w@nk. | | Poll: | Who should be Swansea number 1 |
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| Creating equity? on 10:12 - Sep 5 with 2407 views | Shaky |
| Creating equity? on 09:52 - Sep 5 by A_Fans_Dad |
"as far as i recall the new articles of association have abolished preemption rights which means there is no obligation to offer any new shares sold to the Trust"
Is that
02 Nov 2017 Resolutions Resolution of adoption of Articles of Association
where it was signed by just Huw Jenkins as "Being the sole member of the company entitled to vote on the above resolution"
If so how can he possibly be the only member entitled to vote? |
No.
It was done on the day of the takeover, at the holding company level above the company that actually formally owns the club. | |
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| Creating equity? on 10:32 - Sep 5 with 2363 views | Shaky |
| Creating equity? on 08:33 - Sep 5 by awayjack |
Hadn’t picked up that pre-emption rights had been removed. That’s a warning sign in itself about motives and surely the Trust experts would have fought tooth and nail to stop this. Worrying times. |
To be fair it is standard practice in the US. | |
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| Creating equity? on 12:49 - Sep 5 with 2241 views | A_Fans_Dad |
| Creating equity? on 10:12 - Sep 5 by Shaky |
No.
It was done on the day of the takeover, at the holding company level above the company that actually formally owns the club. |
So what is the November 2017 one about that could only be signed by Jenkins? | | | |
| Creating equity? on 14:14 - Sep 5 with 2174 views | Shaky |
| Creating equity? on 12:49 - Sep 5 by A_Fans_Dad |
So what is the November 2017 one about that could only be signed by Jenkins? |
There are 2 main companies:
The club itself is owned and operated by 'Swansea City AFC Ltd'
But that is in turn a 100% owned subsidiary of 'Swansea City 2002 Limited' which is the top holding company in the UK, in which the Trust and everybody else own shares.
The top level company changed it's articles of association and performed various other corporate stuff on the day the club was taken over, by a written resolution of all the non-Trust shareholders.
The bottom level AFC Ltd then changed its Articles last November, but given there is only one shareholder - the parent company - any changes really were a formality, legally speaking. | |
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| Creating equity? on 14:46 - Sep 5 with 2141 views | Badlands |
| Creating equity? on 05:36 - Sep 5 by Kilkennyjack |
Thanks.
Why do this now though ?
Where does the new money in go ?
Can you explan - raise £15m at £30m value ? |
Why do this now though ?
DC United developments are coming to a close so more time to focus on Swansea.
The reality of the debt mountain that had built up post Laudrup (as Jenkins has been saying since around that time and the reason to bring in new shareholders), the income fall from relegation, losses in the transfer market, payment of money not actually paid for players has hit home.
I would think the ability to borrow against assist in the form of players has been dented with the actual payments no where near our valuations.
Not having anything other than training facilities to act as collateral for borrowing.
This is the only way to raise capital as we can not reduce wages or get income from sales until January at the earliest.
Where does the new money in go ?
I suspect the new money would be used for debt management.
The usual suspect will whine that it is more profit for 'money grabbers' but iwe have been living beyond our means for a few years.
The fact is the owners are desperately trying to balance the books in order to secure our future. |  |
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| Creating equity? on 14:49 - Sep 5 with 2131 views | Loyal |
| Creating equity? on 14:46 - Sep 5 by Badlands |
Why do this now though ?
DC United developments are coming to a close so more time to focus on Swansea.
The reality of the debt mountain that had built up post Laudrup (as Jenkins has been saying since around that time and the reason to bring in new shareholders), the income fall from relegation, losses in the transfer market, payment of money not actually paid for players has hit home.
I would think the ability to borrow against assist in the form of players has been dented with the actual payments no where near our valuations.
Not having anything other than training facilities to act as collateral for borrowing.
This is the only way to raise capital as we can not reduce wages or get income from sales until January at the earliest.
Where does the new money in go ?
I suspect the new money would be used for debt management.
The usual suspect will whine that it is more profit for 'money grabbers' but iwe have been living beyond our means for a few years.
The fact is the owners are desperately trying to balance the books in order to secure our future. |
And theres. | |
| Nolan sympathiser, clout expert, personal friend of Leigh Dineen, advocate and enforcer of porridge swallows.
The official inventor of the tit w@nk. | | Poll: | Who should be Swansea number 1 |
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| Creating equity? on 14:54 - Sep 5 with 2114 views | longlostjack |
| Creating equity? on 14:46 - Sep 5 by Badlands |
Why do this now though ?
DC United developments are coming to a close so more time to focus on Swansea.
The reality of the debt mountain that had built up post Laudrup (as Jenkins has been saying since around that time and the reason to bring in new shareholders), the income fall from relegation, losses in the transfer market, payment of money not actually paid for players has hit home.
I would think the ability to borrow against assist in the form of players has been dented with the actual payments no where near our valuations.
Not having anything other than training facilities to act as collateral for borrowing.
This is the only way to raise capital as we can not reduce wages or get income from sales until January at the earliest.
Where does the new money in go ?
I suspect the new money would be used for debt management.
The usual suspect will whine that it is more profit for 'money grabbers' but iwe have been living beyond our means for a few years.
The fact is the owners are desperately trying to balance the books in order to secure our future. |
How very kind of them. | |
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| Creating equity? on 14:57 - Sep 5 with 2111 views | Shaky |
| Creating equity? on 14:46 - Sep 5 by Badlands |
Why do this now though ?
DC United developments are coming to a close so more time to focus on Swansea.
The reality of the debt mountain that had built up post Laudrup (as Jenkins has been saying since around that time and the reason to bring in new shareholders), the income fall from relegation, losses in the transfer market, payment of money not actually paid for players has hit home.
I would think the ability to borrow against assist in the form of players has been dented with the actual payments no where near our valuations.
Not having anything other than training facilities to act as collateral for borrowing.
This is the only way to raise capital as we can not reduce wages or get income from sales until January at the earliest.
Where does the new money in go ?
I suspect the new money would be used for debt management.
The usual suspect will whine that it is more profit for 'money grabbers' but iwe have been living beyond our means for a few years.
The fact is the owners are desperately trying to balance the books in order to secure our future. |
FWIW I don't believe you can actually mortgage players; isn't there some sort of FIFA prohibition against part/quasi ownership of players?
Other than that we are saying pretty much the same thing. Will you not please come clean and tell us who you are? | |
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| Creating equity? on 17:09 - Sep 5 with 2042 views | Ceejay |
I would have thought goodwill must have a significant value to the “company’s” worth. I can’t imagine too many businesses have 16,000 people committing £500 every December for a product that doesn’t even start to deliver until 8 months have passed. |  | | |
| Creating equity? on 21:07 - Sep 5 with 1918 views | ExiledJack |
Step 1 - Creative accounting to make the financial position look worse than it is.
Step 2 - Raise "critical" injection of capital through share issuance at the lowest possible valuation point. Dilute the Trust's holdings in the process.
Step 3 - Bring profits through and payout dividends, on the basis that far less than 21% needs to be paid to the Trust after the equity restructure. Sell everything that's not nailed down (noting despite the recent window that we still have players contracted to the club that could be sold for significant sums).
Could it happen? Are there safeguards in place to prevent this? | | | |
| Creating equity? on 21:28 - Sep 5 with 1894 views | Badlands |
| Creating equity? on 14:57 - Sep 5 by Shaky |
FWIW I don't believe you can actually mortgage players; isn't there some sort of FIFA prohibition against part/quasi ownership of players?
Other than that we are saying pretty much the same thing. Will you not please come clean and tell us who you are? |
Of course you can't 'mortgage players' but you can borrow against their worth - its a risk but clubs all take yah risk.
Me?
Swans fan living in mid-Wales.
First game and fan since 1959/60 season.
Season tickets holder since Sousa - always tickets available before that.
No connection to the club other than family and friends who work / have worked for Swans or Liberty.
Is what you want to know
But why the interest? | |
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| Creating equity? on 21:35 - Sep 5 with 1882 views | Shaky |
| Creating equity? on 21:28 - Sep 5 by Badlands |
Of course you can't 'mortgage players' but you can borrow against their worth - its a risk but clubs all take yah risk.
Me?
Swans fan living in mid-Wales.
First game and fan since 1959/60 season.
Season tickets holder since Sousa - always tickets available before that.
No connection to the club other than family and friends who work / have worked for Swans or Liberty.
Is what you want to know
But why the interest? |
You appear to have have inside information, which raises the natural question of what you are trying to achieve through your posts. | |
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