|EGM CALLED FOR 6th JULY
(Friday 19th June 2009)
Steve Hayes' aspirations to take full control of Wycombe Wanderers Football Club will rest on the outcome of a PLC EGM called for Monday 6th July 2009, coupled, more importantly, with a Founder Shareholders' Meeting set to take place on the same evening.
Notice of the EGM arrived with shareholders of Wycombe Wanderers Football Club plc on the same day that the news was broken via the local press. The covering letter says the Club is losing on average £1.4m per year and that the solvency of the Club is due, in the main, to the support of Steve Hayes. The letter claims, "Without Mr Hayes' support the Club would, in all probability, need to enter a formal insolvency arrangement due to the lack of other sources of financing and would soon find itself unable to meet it debts. Mr Hayes has indicated he will continue to financially support the Club and indeed has outlined a recapitalisation plan which will significantly strengthen the Club's balance sheet subject to the shareholders passing the Resolutions..." The letter goes on to add, "Without the support of the shareholders Mr Hayes has informed the Board he will withdraw his support for the Club immediately should there be a negative decision in relation to the changes proposed."
Hayes has already met with Board of the Supporters' Trust to outline his proposals and knows that he must gain a majority vote from the 500 Founder shareholders, 152 of which are controlled by the Trust members, to change the critical 25% threshold on shareholdings in the PLC. Hayes is also proposing that the restriction contained in the current Articles of Association preventing the disposal of Adams Park or a substantial asset of the Company, without approval from the Founder Shareholders, is also removed.
If the changes are approved. Hayes has agreed that he will increase his own personal investment in the Club by converting £3m worth (out of £6.8M) of his outstanding loan notes, into 'voting shares' in the Company. This would give Hayes 100% of the voting shares in the Company and according the PLC notice, "enable him to drive the Club forward through League One and beyond".
The complexity of the changes run to several pages and explain that existing Shareholders (Ordinary or Founder) would become non-voting shareholders. The two Trust Directors would also become 'non-voting associate directors', although it is indicated that Hayes would be willing to offer the Trust Directors a vote should the Trust Board make a 'formal recommendation' to its members that the resolutions be passed.
The other significant point in the proposals is the lifting of the restriction of having to refer to the Founder Shareholders for the 'disposal of any interest in Adams Park or the disposal of any substantial asset of the Company'. The notice explains, "We all want the football club to perform at the highest level possible but any growth must be sustainable. As you may be aware, the Club has been exploring the possibility of a new purpose built stadium in order to, increase revenues coming into the Club and to give supporters, staff and players the state of the art facilities which they deserve for the future. The Board believe that the restrictions contained in the Current Articles which prevent the disposal of Adams Park or a substantial asset of the Company have to be removed to enable any future stadium development and the Board to be able to secure the continued growth of the Club and to attract the investment required to sustain this growth."
Hayes will present his proposals to interested shareholders on Wednesday 24th June with the Trust speaking to their members the following evening. The fall out from this has already been the resignation of Trust PLC reps Dave McGee and Ian Mather, as those two aim to avoid any conflict of interest. From the PLC side, it's clear that they aren't afraid to deliver the highest level of scare tactics, adding in their meeting notice, "The alternatives to rejecting the Resolutions are stark and deeply concerning for the Club...If Mr Hayes ceased his funding, the Club will not be in a position to carry on trading without the need to consider a formal insolvency procedure such as administration." The notice goes on to suggest that new player contracts will be 'severely compromised' and that the playing squad will 'regress from last season'. The 'gun to head' approach concludes by saying, "The anticipated player budget will, without Mr Hayes' funding, be negligible and will serious prejudice the Club's ability to compete in League One and the danger of relegation next season would be considerable (especially in the event that points are deducted if the Club were to enter into administration)"
How the debt has risen since the formation of the PLC.
August 2004 - £2.2m (no loan notes)
June 2005 - £2.2m (including £395K in loan notes to Steve Hayes)
June 2006 - £4.6m (including £2.9m in loan notes to Steve Hayes)
June 2007 - £5.7m (including £4.1m in loan notes to Steve Hayes)
June 2008 - £7.2m (including £5.8m in loan notes to Steve Hayes)
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