official club news Norfolk Holdings to to enable majority control of club

[Soldier on 286]

8 minutes ago, essex canary said:

What is the comparator? It is about twice the rate of inflation compared to Neil Doncaster for, on the face of it, a much narrower range of responsibilities. Query also the underlying professionalism as in signing off this document.

Surely any comparison has to be with clubs of a similar size ? Game has moved on a long way since Neil Doncaster 

[essex canary 611]

1 minute ago, Soldier on said:

Surely any comparison has to be with clubs of a similar size ? Game has moved on a long way since Neil Doncaster 

Perhaps fair enough. We should still be expecting the quality though.

[essex canary 611]

1 hour ago, PurpleCanary said:

I have got as far as the end of the letter from the “independent” Zoe Webber. Still a lot to read on Norfolk itself.

At a rough glance some things stood out:

The EGM is scheduled for October 23 and the issuance of the new preference shares the day after.
There are four US companies listed, details of which may be in the bit I haven’t yet read. They are:

Orchard, incorporated in Delaware

Canaries Ventures, incorporated in Wisconsin

Canary Management, incorporated in Delaware

Footloose, incorporated in Delaware

As expected S&J as now properly regarded as being in a concert party with Norfolk.

The capitalisation of the D preference shares is put at $17,379,413. They are valued at $7.05, and from March 1 2025 can be converted into 2,456,165 of the controlling Ordinaries.
The capitalisation of the E preference shares is put at $56,023,908.

As would seem necessary, new articles of association for the company will be drawn up.

As of August 31 2024 the total principal debt is put at $73,403,321.

The one Rule 9 waiver, as expected, is in effect the one before. So when the D prefs are converted into Ordinaries Norfolk does not have to make an offer to buy out any minority shareholder who wishes to sell.

As expected, there will be a vote to scrap the usual right of minority shareholders to buy into the two new classes of Preference shares.

The real accountants out there will be more reliable than me on the details of the debt, so I am leaving that well alone, but it seems there is to be a new payment in kind loan of $3,993,046.

There will – potentially – be an 11 per cent dividend on the E prefs.

A loan from S&J of £1,038770 in August 2022 for stadium refurbishment will be repaid.

Now this is fun. Once the third US director is appointed Norfolk will have a 3-2 majority. But if one or two of them cannot be there to vote then the remaining US director(s) will have extra votes. In effect they will always have a majority.

If everything is passed then Norfolk and S&J (given that they are regarded as acting in concert) will have a touch over 95 per cent of the controlling Ordinaries.  The situation is mooted that were either Norfolk or S&J buy more Ordinaries they might then have to do what the Rule 9 waivers have and will prevent until then, and be forced to offer to buy out the remaining minorities. What is not mentioned is the 90 per cent rule, which I need to look up again, whereby Norfolk and S&J have the right to buy out the remainers whether the latter like it or not.

Thanks.

The only real surprise is new shares issued at around £5.30. I had expected £1.

E Preference Shares etc. could therefore attract £5 million in interest, a significant hit for the Budget equivalent to about half the gate money.

 

[GMF 1,006]

1 hour ago, shefcanary said:

Still strange that the button was pushed on the email before the press embargo had passed. 🤷‍♂️

Yes, you would have thought that it would be website first, with the emails going out shortly afterwards. 

[shefcanary 2,939]

6 minutes ago, GMF said:

Yes, you would have thought that it would be website first, with the emails going out shortly afterwards. 

Purple has hacked in then?

JOKE! JOKE!

[NewNestCarrow 290]

58 minutes ago, PurpleCanary said:

Webber's basic salary is £432,490 (which doesn't seem to me excessive), rising to £525,000 on promotion to the Premier League, and staying there if we stay up. Plus other bonuses for unspecified targets.

This information (in essence) was also in the documents circulated to shareholders in September last year.

Quite incredible that people who claim to be familiar with numbers (let's call them 'accountants') didn't notice at the time. Maybe they didn't carefully read & process the materials that were sent out?  Maybe they just aren't as smart & incisive as they think they are?

[Soldier on 286]

24 minutes ago, essex canary said:

Thanks.

The only real surprise is new shares issued at around £5.30. I had expected £1.

E Preference Shares etc. could therefore attract £5 million in interest, a significant hit for the Budget equivalent to about half the gate money.

 

Have Norfolk Holdings taken any interest/dividend out of the business to date ? Or do we have to wait for the accounts ?

[essex canary 611]

11 minutes ago, NewNestCarrow said:

This information (in essence) was also in the documents circulated to shareholders in September last year.

Quite incredible that people who claim to be familiar with numbers (let's call them 'accountants') didn't notice at the time. Maybe they didn't carefully read & process the materials that were sent out?  Maybe they just aren't as smart & incisive as they think they are?

Of course I read it last year when other posters made the point on here too. 

[essex canary 611]

12 minutes ago, Soldier on said:

Have Norfolk Holdings taken any interest/dividend out of the business to date ? Or do we have to wait for the accounts ?

Their first tranche of C Preference Share Interest was accrued for last year though not paid. Explanations were offered that it would never be paid. Things have moved on though and quite simply why accrue for something with no intention of paying it? It may open up the possibility that it will be settled if and when returning to the Premier League.

[GMF 1,006]

2 hours ago, PurpleCanary said:

The capitalisation of the D preference shares is put at $17,379,413. They are valued at $7.05, and from March 1 2025 can be converted into 2,456,165 of the controlling Ordinaries.
The capitalisation of the E preference shares is put at $56,023,908.

These loans aren’t just random amounts, they have been very carefully structured with future debt to equity conversions in mind.

I’m guessing that is why the split between D-pref and E-pref is determined, if the former was any higher, the buy-out requirements would have been immediate?

I would assume that the dividend provision on the E-pref reflects the loan interest rates on the relevant loans, some of which may have been rolled-up, hence the increase in total debt. However, that’s largely guesswork on my part, and I’ll have to wait for the documents to see if any guidance, or clues is forthcoming.

[Midlands Yellow 4,682]

Exciting times ahead. Just remember the mater plan only a few years ago. Tom Smith could have been the future!! 

[GMF 1,006]

1 hour ago, essex canary said:

The only real surprise is new shares issued at around £5.30. I had expected £1.

Why did you presume that they would be issued at the notional value (other than that the C-preference shares were) as any modicum of basic mathematics would have indicated that to be highly unlikely?

Anyway, does that make the new benchmark £5.30? Maybe you should have tried selling when you had the chance! 😉

[PurpleCanary 6,366]

3 hours ago, PurpleCanary said:

 

The real accountants out there will be more reliable than me on the details of the debt, so I am leaving that well alone, but it seems there is to be a new payment in kind loan of $3,993,046.

 

To be more precise:

Relevant NCFC Debt and Relevant Norfolk Credit;

Norfolk has provided significant debt financing to the Company since September 2022. The majority of this is in the form of a line of credit dated 30 June 2023 (as amended from time to time) and a master loan note dated 20 February 2024 (as amended from time to time and which is expected to be amended to extend the maturity date thereunder from 15 September 2024 to 29 November 2024) (the “Master Loan Note”)) (the “Relevant NCFC Debt”).

As of 31 August 2024, the Relevant Loan Principal was US$73,403,321 and the aggregate accrued interest was US$9,293,573 (the “Accrued Loan Interest”), of which US$3,993,046 constitutes interest accrued up to 31 December 2023 (the “Pre-2024 Accrued Interest”) and US$5,300,528 constitutes 2024 Accrued Interest.

As of 31 August 2024, the Relevant Loan Principal and the Accrued Loan Interest amount to, in aggregate, US$82,696,894 (the “Relevant Norfolk Credit”).

Norfolk has also provided other debt financing to the Company in an aggregate amount equal to, as of 16 September 2024 (the latest practicable date prior to the publication of this document), US$7,050,000 (the “Further Norfolk Credit”). See section 7.1 of Part II of this document for a summary of the key terms of the Further Norfolk Credit.

Following discussions between the Company, Delia Smith and Michael Wynn-Jones and Norfolk, it is proposed that Norfolk will refinance the Relevant Norfolk Credit by: (i) converting the Pre-2024 Accrued Interest into a new loan on the terms described below (the “New PIK Loan”);

(ii) leaving the 2024 Accrued Interest outstanding on the same terms as the Master Loan Note;

and (iii) capitalising the Relevant Loan Principal into two new classes of preference shares in the capital of the Company (being the D Preference Shares and the E Preference Shares and in each case as defined below) and to be issued to Norfolk on the terms described below (the “Proposed Capitalisation” and, together with the proposals in (i) and (ii) above, the “Proposed Refinancing”).

For the avoidance of doubt, only the Relevant NCFC Debt is subject to the Proposed Refinancing and the Further Norfolk Credit (along with any further debt financing that Norfolk may provide to the Company from time to time) will not form part of the Proposed Refinancing and will remain outstanding.

Terms of the Proposed Refinancing New PIK Loan.

In satisfaction of the Company’s obligations to repay the Pre-2024 Accrued Interest, it is proposed that the Pre-2024 Accrued Interest will be converted into the New PIK Loan, which will be a new US$ denominated loan in an amount of US$3,993,046 from Norfolk as lender to the Company as borrower.

The New PIK Loan will have a maturity date of 1 March 2025 (unless extended by agreement between Norfolk and the Company) and an interest rate of 11 per cent. per annum (compounding monthly). The specific terms of the New PIK Loan are set out in the PIK Loan Agreement. See section 7.4 of Part II of this document for a description of the PIK Loan Agreement. The 2024 Accrued Interest will remain outstanding on its existing terms, including to accrue interest at the current rate.

Edited September 25 by PurpleCanary

[essex canary 611]

1 hour ago, GMF said:

Why did you presume that they would be issued at the notional value (other than that the C-preference shares were) as any modicum of basic mathematics would have indicated that to be highly unlikely?

Anyway, does that make the new benchmark £5.30? Maybe you should have tried selling when you had the chance! 😉

£1 a share would have taken the overall equity outlay to around £10 million which broadly accounts to S&J's outlay.

Perhaps I was being a little cynical but 7.05 dollars or £5.30 takes them only to around £20 million. Why wouldn't it serve as the new benchmark?

Would I have wanted to rip off other fans? Frankly I think my shares ought to be settled on the same basis as MF then I would have sufficient in the bank to pay for my seat going forward with no longevity risk.

[PurpleCanary 6,366]

A few extra points which I think are correct:

Norfolk can (and almost certainly will) trigger the conversion of the D preferences it is acquiring into Ordinaries, but S&J can also trigger that conversion.

Zoe Webber is designated as an independent director because she is not part of the concert party formed by S&J and Norfolk. Of course this is a nonsense. She is a paid employee of the club who presumably was at the heart of the negotiations that produced this new deal. In no business universe is she independent. Hardly worth bothering this time to try to get her disbarred, though. At least they didn't try to resurrect Tom Smith.🤩

On top of the addition of a third US director, and the voting sleight of hand by which Norfolk will always have a majority, it will have the right to make further boardroom changes in the future. Truthfully, of course it would.

Norfolk will have in effect the first right of negotiation if S&J decide to sell some or all of their shares.

The voting-in-tandem deal between S&J and Norfolk, which runs until January 19, 2026, will be terminated then.

Edited September 25 by PurpleCanary

[Parma Ham's gone mouldy 2,448]

I would suggest focusing on the why, rather than the what. 

In the very near future nobody will have any meaningful say or input into the running of Norwich City Football Club as it becomes a private company, run for the benefit of its Norfolk shareholders. That’s Norfolk Delaware et al, not Norfolk Norfolk of course. 

There will be no open AGM’s, nor votes on the articles, amendments nor any scrutiny of the financial vehicle it has become. 

Any further hollowing out of playing staff will be to prove the investor model and to encourage wider shareholder input from SSG and beyond. Higher level success will be welcome (and would trigger some pleasing early cash out payments)  though not really required in the grand scheme of things. The buy in was so cheap anyway, the overall strategy is not affected. 

One day it will all be sold at a significant profit to a bigger multi-sport group and the purpose from the outset will be revealed and cashed in.

In the meantime some cheap no-risk novelty fun as the global market for limited sports assets  inexorably rises. Just get on the train. Either at the top end if you can, leverage it if you can get away with it, or even (more fool you) cash if you have it in the bank to waste , cheaply is great, or via distressed even better if you can charm-wangle-act your way in, just get on board with the game: 

All the money is in America for this game. And now we are part of it. 

Their game is bigger than our game. Our game is just one of their games. 

Parma 

[Soldier on 286]

18 minutes ago, Parma Ham's gone mouldy said:

I would suggest focusing on the why, rather than the what. 

In the very near future nobody will have any meaningful say or input into the running of Norwich City Football Club as it becomes a private company, run for the benefit of its Norfolk shareholders. That’s Norfolk Delaware et al, not Norfolk Norfolk of course. 

There will be no open AGM’s, nor votes on the articles, amendments nor any scrutiny of the financial vehicle it has become. 

Any further hollowing out of playing staff will be to prove the investor model and to encourage wider shareholder input from SSG and beyond. Higher level success will be welcome (and would trigger some pleasing early cash out payments)  though not really required in the grand scheme of things. The buy in was so cheap anyway, the overall strategy is not affected. 

One day it will all be sold at a significant profit to a bigger multi-sport group and the purpose from the outset will be revealed and cashed in.

In the meantime some cheap no-risk novelty fun as the global market for limited sports assets  inexorably rises. Just get on the train. Either at the top end if you can, leverage it if you can get away with it, or even (more fool you) cash if you have it in the bank to waste , cheaply is great, or via distressed even better if you can charm-wangle-act your way in, just get on board with the game: 

All the money is in America for this game. And now we are part of it. 

Their game is bigger than our game. Our game is just one of their games. 

Parma 

Whilst you may well be right have we seen any suggestion that they want to take us private ?  Shouldn’t they be buying up minority shareholdings and D&M’s shareholding if that’s the aim ????

[nutty nigel 7,897]

When they buy me out I’m going to reinvest in a random baseball team in America…

 

[essex canary 611]

The buy out price for a similar percentage of WBA with half our gate money was reported as £60 million. Curious then that our equivalent appears to be £21.2 million. That includes £3 million plus to the Foulger and Jimmy Jones families. The rest of the financing then attracts high interest returns with other shareholders not being treated equally. 

Aside from the Zoe Webber eligibility issue, how can this been seen as equitable and transparent?

 

[essex canary 611]

1 hour ago, PurpleCanary said:

 

Zoe Webber is designated as an independent director because she is not part of the concert party formed by S&J and Norfolk. Of course this is a nonsense. She is a paid employee of the club who presumably was at the heart of the negotiations that produced this new deal. In no business universe is she independent. Hardly worth bothering this time to try to get her disbarred, though. At least they didn't try to resurrect Tom Smith.🤩

 

I believe she will be up for re-election at the AGM so why not  raise that issue in connection with the relevant Agenda item. Happy to do it.

[PurpleCanary 6,366]

1 hour ago, Parma Ham's gone mouldy said:

I would suggest focusing on the why, rather than the what. 

In the very near future nobody will have any meaningful say or input into the running of Norwich City Football Club as it becomes a private company, run for the benefit of its Norfolk shareholders. That’s Norfolk Delaware et al, not Norfolk Norfolk of course. 

There will be no open AGM’s, nor votes on the articles, amendments nor any scrutiny of the financial vehicle it has become. 

Any further hollowing out of playing staff will be to prove the investor model and to encourage wider shareholder input from SSG and beyond. Higher level success will be welcome (and would trigger some pleasing early cash out payments)  though not really required in the grand scheme of things. The buy in was so cheap anyway, the overall strategy is not affected. 

One day it will all be sold at a significant profit to a bigger multi-sport group and the purpose from the outset will be revealed and cashed in.

In the meantime some cheap no-risk novelty fun as the global market for limited sports assets  inexorably rises. Just get on the train. Either at the top end if you can, leverage it if you can get away with it, or even (more fool you) cash if you have it in the bank to waste , cheaply is great, or via distressed even better if you can charm-wangle-act your way in, just get on board with the game: 

All the money is in America for this game. And now we are part of it. 

Their game is bigger than our game. Our game is just one of their games. 

Parma 

It is useful for people to know the what of itself, for information. But the what often also indicates the why.

Edited September 25 by PurpleCanary

[NewNestCarrow 290]

5 hours ago, essex canary said:

Of course I read it last year when other posters made the point on here too. 

If you had read & understood the papers then you wouldn't have been ignorant of the identity of "Alfred (sic) Thomas Botton Jones"

 

 

[GMF 1,006]

12 hours ago, essex canary said:

£1 a share would have taken the overall equity outlay to around £10 million which broadly accounts to S&J's outlay.

Perhaps I was being a little cynical but 7.05 dollars or £5.30 takes them only to around £20 million. Why wouldn't it serve as the new benchmark?

Would I have wanted to rip off other fans? Frankly I think my shares ought to be settled on the same basis as MF then I would have sufficient in the bank to pay for my seat going forward with no longevity risk.

Why would you want parity on the overall equity outlay? Surely, purely from an accounting perspective, it’s more logical to have a higher share equity stake in the Club as possible?

As for your final paragraph, since when did you become a paragon of virtue? You spent the majority of last autumn bemoaning MF for, in your opinion, underselling his holdings, but now you want parity with him? I hate to break it to you but that option wasn’t available last time, not least because shareholders voted in favour of the waiver, it’s not on the table this time around, and it’s highly unlikely to happen in the near future.

[Bobzilla 207]

15 hours ago, essex canary said:

Their first tranche of C Preference Share Interest was accrued for last year though not paid. Explanations were offered that it would never be paid. Things have moved on though and quite simply why accrue for something with no intention of paying it? It may open up the possibility that it will be settled if and when returning to the Premier League.

Because accounting standards require it because the prefs are redeemable.

[GMF 1,006]

23 minutes ago, Bobzilla said:

Because accounting standards require it because the prefs are redeemable.

Showing up my lack of accounting knowledge here, I was curious as to why the C-prefs were showing (I think) as redeemable after 1 to 2 years in the last accounts, when they are scheduled for redemption in 2029? I appreciate that accountants are required to make assumptions, but this one seems odd to me.

[essex canary 611]

30 minutes ago, Bobzilla said:

Because accounting standards require it because the prefs are redeemable.

Exactly. Because the Accounting Standards have determined the most appropriate treatment for Accountability and Stewardship.

[essex canary 611]

12 minutes ago, GMF said:

Showing up my lack of accounting knowledge here, I was curious as to why the C-prefs were showing (I think) as redeemable after 1 to 2 years in the last accounts, when they are scheduled for redemption in 2029? I appreciate that accountants are required to make assumptions, but this one seems odd to me.

Well there is a 64,000 dollar question at least for the £565,000 (being the 629 minus the 64). The £64,000 is a standard entry in that it is accrued in the year and paid the next January (albeit in the event it wasn't this time). But why if there isn't intention to pay the interest on the C Pref Shares did they mark it as payable within 1 year?

Smoke and mirrors as always.

[wcorkcanary 4,753]

All investors should be aware that the value of shares can go down as well as up. The rest is fluff.  

[essex canary 611]

40 minutes ago, wcorkcanary said:

All investors should be aware that the value of shares can go down as well as up. The rest is fluff.  

Where is the Helium?

[Fen Canary 1,454]

44 minutes ago, wcorkcanary said:

All investors should be aware that the value of shares can go down as well as up. The rest is fluff.  

That’s news to me! Are you suggesting my shares in Woolworths aren’t worth as much as I paid for them all those years ago?