FC EGM – 6th November 2006
November 10, 2006
On the 6th November 2006 the Board of Bristol Rovers 1883 Ltd. held an Extraordinary General Meeting (EGM) to vote on a proposed ‘Rights Issue’ to raise new investment for the football club.
There were the 3 following resolutions:-
1. Increase authorised share Capital
2. Authorisation of Directors to allot shares
3. Dis-apply statutory pre-emption rights
Resolutions 1 & 2 were sought to increase the share capital from £1,750,000 to £2,000,000 by the creation of 2,500,000 new ordinary shares and authorise the Directors to allot and issue these ordinary shares. These are ordinary resolutions requiring a vote of 50% + 1 share to be passed. Under this ‘Rights Issue’ offer, shareholders, including the Supporters Club, will be able to buy one share at 50p to match the existing number of shares they hold. The Supporters Club currently have 149,970 shares (110,970 through the share scheme) so therefore we will be able to buy that number again.
Resolution 3 was sought to disapply statutory pre-emption rights. This is a special resolution requiring a vote of 75% of the shares to be passed. Resolution 3 will allow the Board to give the Supporters Club special dispensation to take up the allotted ‘Rights Issue’ shares over the period of the share scheme agreement as opposed to 21 days that other share holders have. It will also allow the share scheme to continue to buy shares under the existing share scheme agreement in the future.
The current directors are committed to paying £551,262, to obtain their allotted ‘Rights Issue’ shares, which will be much needed new investment. If all other share holders commit to purchasing their allotted shares it will raise marginally under £1M of much needed new investment into the club.
The Chairman, Geoff Dunford, opened the EGM and asked the company solicitor to explain the rationale behind the ‘Rights Issue’. Geoff Dunford also explained that the normal protocol was to ask for a show of hands for voting purposes but that any member could ask for a vote based upon shareholding held.
There was some debate from the shareholders as to the purpose of the ‘Rights issue’, the rationale behind each resolution, and the current trading position of the Football club. Geoff Dunford explained that losses projected at the start of the financial year are likely to increase to circa £650K, the additional shortfall being mainly as a result of lower than anticipated gate receipts, although he hoped this could be turned around if current improved performances on the pitch can be maintained and improved. Geoff Dunford explained that the Board are committed to supporting Paul Trollope and Lennie Lawrence in strengthening the team to help achieve these better results.
All resolutions were passed on a show of hands. Resolutions 1 & 2 were carried without opposition. Resolution 3 was narrowly carried. Shareholders now have until the 27th of November 2006 to take up their shares under the ‘Rights Issue’, so we will soon see how much new investment has been raised. As explained above, the Supporters Club will have approximately 2 years to take up its allotted shares under the ‘Rights Issue’.