GMF

I personally find it interesting how some review / rewrite history some years down the line. For sure, Geoffrey acquired original acquired shares, what was then a minority 34% ownership, from Chase, but the need desperate need for cash resulted in working capital (loans) provided by D&M, most of which was subsequently converted into equity, as new shares. Fast forward almost 26 years, another minority share holding was acquired, much needed working capital has subsequently been injected by a minority shareholder, and, guess what, a couple of years later, those loans have been converted into equity, with a new majority shareholder. You really couldn’t make this 5h1t up. What goes around comes around, the numbers are just a lot bigger. OTBC

A quorum is defined within the Companies Act 2006, and the independent scrutinisers will verify whether there’s compliance, or not.

No, confirmation that the resolutions had been passed was announced the following day. The specific numbers came at the AGM, but the outcome was the relevant factor, much the same tonight really.

The stark choice is vote in favour of the resolutions, thereby convert £50m plus of debt into equity, or, vote against, the resolutions fail, and the existing debt will have to be refinanced, undoubtedly with a significant interest liability accruing. Not much of a choice really, but those who don’t vote can hardly complain about the outcome in the circumstances. Not that that will stop some from moaning! 😉

Depends on whether a certain shareholder is in attendance, asking numerous “what-about”questions. If so, the results will be some time in coming. Seriously, the votes will be subject to external verification. Last time we didn’t find out until the following day.

Exactly what we did in 2021 for the future Emi transfer instalments. There’s nothing wrong in principle accelerating further receipts, but it obviously helps if you spend the money wisely, as you can only spend it once!

Kieran Maguire often refers to Macquarie as “the vulture kangaroo!”

If you look at the notes in the 2022 accounts (page 68) under 19 Creditors Due after more than a year, that is exactly what we did, taken accelerated receipts against future parachute and transfer receivables. There’s a similar note in this year’s accounts against future transfer receivables.

I’m well aware that the thread relates to the 2024 accounts, not least because I started it! I also understand perfectly the concept of short term loans, but the genius of those came from external lenders in the summer of 2021, underwritten by future parachute and transfer fees. Those loan agreements were secured against future receipts - a standard practice in football. I have repeatedly said that the cash flow forecasts, following relegation back in 2022 would have been grim. D&M were a party to the shareholder agreement in the summer of 2022. This isn’t a recent decision, the direction of travel was set then. Norfolk have not only subsequently underwritten the external debt, but increased their provision of additional shareholder loans. If your question is could we have repaid them back at our of existing cash flows, either in the summers of 2023 or 2024, then the answer would be no, obviously. But, importantly, Norfolk were never going to foreclose on their loan agreements, so your suggestion that we were about to go bust becomes irrelevant in this context, hence my pushback. D&M are in exactly the same position as all other shareholders, their equity stake has been diluted. They’ve given nothing away, aside from majority control, so they won’t receive anything, not least because they still have all their shares. Whether they decide to keep them, or sell them in due course, is their prerogative. Your questions regarding the repayment of the short term loans in the 2024 accounts is a matter for the finance team at the Club, not me. In any event, the current general meeting paperwork gives us the answer, as a significant element of those are being refinanced via the debt for equity swaps, and the creation of D and E preference shares. This whole process isn’t being caused by a sudden inability to pay off the existing loans, as you suggested. It’s all carefully choreographed, right down to the exact £, so D&M will have 10% of the increased shareholding. How much control D&M had over the whole process is a matter for conjecture. But, personally, I’d rather have a new majority owner, with the ability to provide additional shareholder loans, or equity, than existed before. The NG are looking to build something here much bigger here, not destroy it. Let’s enjoy the ride. BTW, if you still disagree with this, let’s just agree to disagree on it. OTBC

All company directors have a fiduciary duty to shareholders, something that seems to have been somewhat overlooked, save for the waiver proposals, with both debt to equity conversions…

Leaving aside the fact that I was referring specifically to 2022 and you’ve subsequently edited your earlier post to include an extract from the 2024 accounts, the trend of shareholders loans is clearly upward, not least because the loan agreements have been refinanced (the two sets of general meeting papers confirm this, so no great surprise there.) I’ve stated refinancing as an option before, so quite why you think I need to reference you an explanation in the 2024 accounts is puzzling. As Michael Foulger stated at the time of his departure, the need for someone to provide additional working capital was a prerequisite of his decision. The subsequent increase in shareholder loans shouldn’t come as no surprise to anyone. Again, in case you missed it, D&M haven’t sold anything yet, quite why anyone would expect them to receive something is puzzling. (Although the messaging in the initial announcement was, shall we say, odd!) Shareholder loans are a the quickest way to inject money into a company, they’re a good proxy for shareholder equity. We’ve had two equity injections already (C-preference and the 195,000 ordinary shares conversion) with a third incoming. The original shareholder agreement, together with the subsequent conversion of debt into equity, was never a partnership of equals, despite the messaging at the time, as the NG have always had far more “skin-in-the-game” than D&M. The latest proposal just reaffirmed that. One final observation, if the situation was as dire as you’ve described, surely the auditors statements regarding be a going concern would have been more qualified.

By the way, I certainly agree with you on that. As for your final paragraph, I’ll not comment further. At least not yet. 😉

Without knowing the specifics around each loan repayment schedule, it’s impossible to know with certainty. The figures certainly looked grim in absolute terms in the accounts. However, the majority of the external debts back in 2022 related charges made against future guaranteed receivables; parachute payments and transfer receivables from the Emi transfer in the summer of 2021. Those future receivables, which would have exceeded the loan repayments due, aren’t included in each year’s accounts (other than as a note) but the loans already drawn against them are. Hence why the situation looked worse than reality. This is why I’m pushing back against a sweeping statement like, “we couldn’t repay our debt.”

I don’t disagree with any of that, but you previously stated. “It doesn't matter whose fault it was but the club had huge debts it couldn't meet and without that injection of funds it could have gone under.” It was that I don’t agree with, despite expressing it badly in my previous reply to you. Clubs are no different to companies, they don’t go under because of their accumulated debt position, they go into administration because either they can’t repay their debts when they fall due for repayment, or, alternatively, because they can’t refinance the debts when they are due for repayment. NCFC were neither of those. The relevant context here was the summer of 2022. At that point majority of the external debts related to borrowings against future receivables. In this instance, future player receivables (transfer instalments for Emi Beundia) and future parachute payment receivables. Fast forward to now and what’s happening is that NG are funding exactly the same thing (minus the parachutes of course) albeit as a related party.

Accrued charges in the P&L won’t appear in the cash flow statements, no?

I think you and I are on the same page, even if we’re reading the same words differently. When the recent announcement came out about the pending changes to Norfolk, the references to D&M not receiving any payments seemed misguided, if technically correct. D&M still own all their shares and that won’t change under the latest proposal. You don’t get paid for something you haven’t sold, after all. Your use of “debts” seems inappropriate to me. For sure, because of our Premier League season, we’d already committed to significant transfer fees and player contracts, which would have been challenging, especially following relegation, but not impossible to navigate, albeit with significant player sales then required in the summer of 2022, rather than the acquisitions of Sara and Nunez. I agree that the involvement of NG was almost certainly needed, as the cash flow forecasts would have looked grim, but to suggest that there’s no fault here is letting someone else off lightly, in my opinion.

That’s the essence of the situation. Whilst it was perfectly reasonable to highlight the £30m revenue loss due to COVID, shouldn’t have been taken literally as an excuse for the Club’s predicament, as was stated at last year’s AGM by a certain director. COVID’s revenue impact was for the tale end of the 2019-20 season, and the whole of 2020-21, which was mainly played behind closed doors, but resulted with promotion back to the Premier League in May 2021. By then the majority of COVID’s impact would have been known, with budget adjustments reflecting the reality of our circumstances at the time. However, this didn’t happen. Far too much faith was put in the perceived footballing wisdom behind that summer’s recruitment, which was prohibitively expensive and failed to deliver on the pitch. The cash flow forecasts would have undoubtedly looked grim following relegation in the summer of 2022, but, thankfully, one person realised the need for further working capital and acted accordingly. The majority shareholding, which was frequently messaged out as worthless, by its owners, was bypassed, with a minority shareholding becoming the catalyst for where we are now. Undoubtedly, the forthcoming AGM will feature some form of tribute video, to mark the formal “changing of the guard”, but the real thanks, in my opinion, should have been given two years ago.

You’re the Chartered Accountant, supposedly, you really should know the answer here without the need for the question marks!

It’s standard practice for all clubs to offer the best pricing deals to STH, with higher prices therefore charged to casual fans. It’s always been that way and it’s not going to change. And, contrary to your statement, there’s far more casual seats available in standard areas, with unrestricted viewing, than in the corner areas, although, of course, they generally tend to be purchased first. But you’re wrong to suggest that the unrestricted view seats always sell out (they don’t) and that younger fans are somehow only sold the poorer, restricted view seats. That’s yet another example of stick waving by you!

Put simply, had they not come on board in the summer of 2022, the course of action subsequently taken would have been remarkably different, and probably not for the better!

I was responding to the observation that the assets are exceeded by liabilities (which also deteriorated over the year). So, technically insolvent. However, the main debtor is the NG, and they’re not going to enforce the debts.

It’s technically correct, but it ignores the fact that most of the Club’s assets are intangible, namely the players. They’re showing up in the balance sheet at cost, less any amortisation already incurred. Academy players will be showing up at nil cost, so any player sales, such as Max or Andy O, last summer, will be all profit. Jonny Rowe is an interesting one, as he’s on loan this season, so, depending upon when the obligation to buy actually happens, could either be booked in the 24-25, or the 25-26 accounts.

That’s never likely to happen, as it would give other clubs a heads-up on who’s struggling to comply; which would have knock on consequences for potential player sales.

Are you basically saying that the STH should subsidise the casual fan who would otherwise be paying the casual seat price? This would be nonsensical if that’s what you are saying!

https://www.canaries.co.uk/content/norwich-city-publish-annual-report