Albion Shares for Sale. £1 each.

[Creaky]

From what I can see, for Holdings, the Articles were last amended in July 2002; for the Football Club, they were last amended in Feb 1996, both according to Companies House. Unless I've missed a filing, that means that TB hasn't sought to change the Articles since his appointment, which I find somewhat surprising.

Given how long ago the Articles of both companies were amended (btw, anyone know which company's shares DK is apparently offering to sell?), who knows what pre-emption rights exist. I could easily check, but, tbh, I can't be bothered.

If the Articles do have pre-emption clauses that prevent DK selling his shares to people other than existing shareholders, I would anticipate that the club would make a statement at some point making potential new shareholders aware that there may be some considerable problem in them getting their hands on shares, even if they've paid money. If there aren't any pre-emption clauses in the Articles, then DK can sell his shares (providing they are fully paid-up, which I assume they are) to anyone he wants.

El Presidente is correct to say that, at this point, the shares are technically financially worthless. Liabilities far outstrip assets, and the business is loss-making, making it impossible to pay a dividend and also meaning that further dilution is inevitable.

I have no clue what DK's motives are, but if this does proceed there will be an additional administrative burden on the club, and therefore cost. The ability to influence any decision at the club, even if you owned all of DK's shares is precisely zero.

Of course, many might simply want to say that they are a shareholder in the club - fair enough, but do be aware that the opportunity to make money or have any say in decisions is non-existant, or as close to as makes no difference.

IF you were a shareholder you would know the answers to the questions you pose.

I think that is the point - changes such as you mention would be public knowledge - not dependant on spending more than the cost of a single share for a report from Companies House.

It is also not quite right to say that liabilities outstrip assets now that TB has converted much of his loan to equity and will probably convert yet more until the P&L sheet shows a positive bottom line.

 

[hans kraay fan club]

Can anyone explain for me please..

1. Would it be possible to buy, and receive the shares before xmas?
2. Can I buy some without buying the book? - can we get hold of the form?

 

[El Presidente]

It is also not quite right to say that liabilities outstrip assets now that TB has converted much of his loan to equity and will probably convert yet more until the P&L sheet shows a positive bottom line.

Eh? How can a capital conversion of zero interest debt affect P&L?

 

[Creaky]

Eh? How can a capital conversion of zero interest debt affect P&L?

Doesn't affect the P&L one iota but it does change the balance sheet which shows the capital 'value' of the club.

If you look at the Balance Sheet for BHA Holdings in simplified terms the position at the end of 2012 was

Fixed Assets - - £109.3 M
Current Assets - £16.0 M
Current Liabilities - (£13.3 M)

Total Current Assets less Liabilities - £112 M


Directors Loan Account - £125.3 M
Share Capital - £25 M
P&L A/C (£38.3 M)

Long term Liabilities - £112 M

However since those accounts were prepared £40 M has been moved from the Directors Loan Account to the Share Capital so instead of net assets, (excluding share capital and P&L account), over liabilities being a negative of approximately £13m this has swung round to a positive figure.

 

[Goldstone1976]

Eh? How can a capital conversion of zero interest debt affect P&L?

Having seen Creaky's reply, I think there's simply a misunderstanding of the word "until" in Creaky's original comment on my post. You interpreted as meaning that TB's conversion of debt to equity would directly affect the P&L, whereas I now think he meant a time span; i.e. TB will continue to convert debt to equity until such time as the P&L does show a profit (or b/even, maybe).

Creaky - I assume that you think this because you think that TB will want to show Net Assets rather than Net Liabilities?

 

[El Presidente]

Having seen Creaky's reply, I think there's simply a misunderstanding of the word "until" in Creaky's original comment on my post. You interpreted as meaning that TB's conversion of debt to equity would directly affect the P&L, whereas I now think he meant a time span; i.e. TB will continue to convert debt to equity until such time as the P&L does show a profit (or b/even, maybe).

Creaky - I assume that you think this because you think that TB will want to show Net Assets rather than Net Liabilities?

Without wanting to turn this into an accounting nerd out I can't see it makes a blind bit of difference. The Albion is not a viable business, has not been for the last 40 years at least, and is unlikely to be so in the future either, from a financial (rather than emotional) perspective.

 

[Goldstone1976]

Without wanting to turn this into an accounting nerd out I can't see it makes a blind bit of difference. The Albion is not a viable business, has not been for the last 40 years at least, and is unlikely to be so in the future either, from a financial (rather than emotional) perspective.

Agreed!

 

[Bozza]

By "administrative burden", the implication is "increased costs to the club".

So, none of the money is going to the club, but the club might have to spend more money. That's nice.

I'm not saying it is - as I said "I'm not sure of the obligation". But if there were, say, 5,000 new Albion shareholders the club would have to keep a record of that. They would have to have a process that records change of shareholder name, address and deaths etc - all the things that happen to people all the time. They'd need a mechanism to record change of ownership, even though the likelihood of supporters selling on their shares would be minimal.

(I work for a company that looks after registers of shareholders for thousands of companies, big and small.)

 

[easynow]

this time next year, we're gonna be millionaires!

 

[Man of Harveys]

Suggest you take those blue and white tinted spectacles off and take a step back. This has got nothing to do with the fans being shareholders. This is DK parting two fingered salute to TB and a very ordinary marketing ploy to the people who would probably have bought his book anyway.

Sounds great on all fronts. That's convinced me to want some.

 

[Eksman]

I'll buy a couple hundred quid worth!

 

[shaolinpunk]

(I work for a company that looks after registers of shareholders for thousands of companies, big and small.)

Maybe you should drop Paul Barber an email - they might need your services soon

 

[BBassic]

I was getting the book anyway but this is a very good marketing scheme on DK's behalf.

 

[Creaky]

Without wanting to turn this into an accounting nerd out I can't see it makes a blind bit of difference. The Albion is not a viable business, has not been for the last 40 years at least, and is unlikely to be so in the future either, from a financial (rather than emotional) perspective.

I think I agree with you on that point, (though I would temper that by saying that I do believe that TB's aim, quite rightly, is to make the Holding company a financially viable and profitable company).

What makes the shares attractive to me is not the financial aspect but having a share, literally, in the club I have supported over the years.

 

[cocamalia]

I think it is reasonable marketing for the book, if indeed you need to buy the book to become a shareholder.

But I don't think it's particularly cynical. If we were promoted to the promised land and a foreign investor wanted to invest, then I think the valuation of the takeover would far exceed (£10m - the value Dick Knight seems to be placing on the club in this sale). If the club is approach for sale, and I think there is a very strong possibility of this happening if it has not already, then he would stand to make far more than £1m.

Diversity of share ownership is good for any company, and a 10% fan ownership would ensure there are some (albeit not controlling) checks on the board.

How many individual shareholders are there in any FTSE 100 company..

 

[sparkie]

Would this be why Dick Knight didn't let the club see the book in advance?

ie so he could announce this, rather than the share sale be prevented behind closed doors?

By the way I've no idea, nor whether it's of any importance.

 

[Triggaaar]

I fully agreed with him that the Albion shouldn't ever again be majority owned by just one person, and I thought everyone did at that time. Therefore I have never really been sure why TB, a lifelong Albion fan, wouldn't be content with 49.5% of the shares.

Our club wasn't owned by just one person when Archer and Stanley tried to destroy it. Having two or more owners doesn't help much when they'd all scrap the club for some cash.

TB has put £150m+ into the club, and is continuing to put in more - if you wanted TB to own less than 50%, who else is going to put in over £75m?

 

[tinycowboy]

Without wanting to turn this into an accounting nerd out...

Spoilsport. Who wants to discuss how they're planning their year-end IFRS 13 disclosures with me? Anybody? Helloo? Hmmm.

 

[tinycowboy]

I'm not saying it is - as I said "I'm not sure of the obligation". But if there were, say, 5,000 new Albion shareholders the club would have to keep a record of that. They would have to have a process that records change of shareholder name, address and deaths etc - all the things that happen to people all the time. They'd need a mechanism to record change of ownership, even though the likelihood of supporters selling on their shares would be minimal.

(I work for a company that looks after registers of shareholders for thousands of companies, big and small.)

..plus, all shareholders have to be treated equally, so, as has already been mentioned (I think), agendas, legal notices, etc have to be mailed out and postage paid. If we went from a handful of shareholders to hundreds, it would cost the club, I would guess, a few thousand pounds.

 

[saafend_seagull]

Spoilsport. Who wants to discuss how they're planning their year-end IFRS 13 disclosures with me? Anybody? Helloo? Hmmm.

You mean their UK GAAP conversion accounts to the new FRS...