Sale and Leaseback - EGM

Following the Public Meeting to discuss the proposed Sale and Lease Back of Dean Court on June 16th, AFC Bournemouth called an EGM of Shareholders to formally present the Sale and Lease Back to the Shareholders.

In an often-heated discussion, here is an account of what happened.

Starting just after 6pm, Tony Swaisland outlined the current position of the Football Club and how the S&L of Dean Court would alleviate the problems being faced by the Club.

To start Tony Swaisland stated that all present were all in agreement that we want the Club to succeed and be a profitable business, that we have a fantastic new stadium, but the Club needs a huge injection of cash and that it needs to be run much better than it is today.

So what to do?
Having explored many other avenues, with out success, because the terms being offered were not attractive, as well as the huge uncertainty surrounding football at the moment, mainly because of the collapse of ITV Digital, trying to get additional finance is very difficult for all Clubs, not just AFC Bournemouth. As a result the Sale and Lease back of Dean Court is seen as the only viable option left open to refinance the Club.

The partner in the deal, revealed for the first, is London and Henley Property Investments of London, with John De Stefano as Chairman and MD.

The deal would mean that L&H would look to exploit the stadium to its full potential. Any additional revenue streams would be split between AFCB and L&H, but catering and banqueting profits would remain the AFCB. To this end, the Board believe that the arrangement would work and benefit both parties.

It was also announced that L&H would be down in Bournemouth this week (w/b 15 July) to meet fans representatives to discuss the deal, and to allay any fears.

Other points of clarification:
It would not be possible for AFCB to buy back the Lease at anytime, but we would have first refusal if L&H decided to sell Dean Court, or if they were to go out of business.
When asked, Tony Swaisland and Stanley Cohen were both keen to stress that neither of them have any links with L&H.

This was followed by a most impressive presentation by Peter Philips, who put together an excellent presentation of the projected cash flows given 5 scenarios:
1. S&L, with all creditors being repaid immediately
2. S&L, with creditors being paid over a period of time (if agreeable).
3. No S&L, but Matty Holland being sold by Ipswich, netting £1.8 million.
4. S&L and Matty Holland being sold.
5. No S&L, no Matty sale.

With all 5 scenarios, some assumptions were made:

With all these base assumptions (no matter what you think of them), the Club will end up back at square one in 10 years. With scenario 2 it would take 5 years, and scenarios 3 & 4 would see the Club back were they are today in less than 3 years. What was interesting that out of all the assumptions, only the adjustment of average ticket prices (up by £2) would see all 5 scenarios returning a positive cash flow in 10 years time. The presentation made one thing was clear, the Club is close to being profitable, but as is so often the case, so near, but so far.

Next to speak was Trevor Watkins for the Trust Fund. He was clear that the Trust could not make a final decision on the night given that the projected cash flows had only been made available less than 48 hours earlier (not enough time to assess), as well as the suspicions of the fans. Just as importantly, the Trust Fund wanted to make sure that the S&L is done on the right terms. Effectively the trust could not give its unconditional backing for the S&L deal.

The comment about the late availability of the figures triggered Stanley Cohen in to a furious outburst, which took the meeting by total storm. He stated the figures had been provided (“what more did the Trust Fund want?”) and that L&H would walk away from the deal on Monday (15th July), the Club were about to receive a winding up order, and didn’t have enough cash for this months wages (we need £120k + £45k for PAYE), and that the Club had debts totalling £6 million. Cohen made it clear that we had to sign up to the S&L there and then.

This comment brought up roar as a furious debate started about why the seriousness of the Clubs finances had not been brought to light earlier, together with the attendees not liking the idea that a gun was being held to their heads to vote in favour, or face the consequences.

A new resolution was put forward by the AFCB Board, which meant that the S&L would go ahead, following a chance of the Trust Fund having the information they requested in June, with having 7 working days to respond. With this the Trust adjourned for 20 minutes to digest the new resolution.

The motion was carried with 24 in favour (including the Trust Fund), 6 against and 6 abstentions.

The AFC Bournemouth Exiles Club and Cherries International abstained because Andy Burton, who represented both, as well as acting as proxy for a number of individual share holders, did not have a mandate for the resolution, or had time to take advice from Exiles/CI Trustees, or individuals.

The EGM closed after 2.5 hours at 2030.