Re: Green light for Community Ownership!

[comrade powell]

The feature on Radio Bristol this morning can be found here...

http://www.bbc.co.uk/programmes/p02kpzlp

01 - 54 - 45 in

[SteveS]

I think the circumstances are different this time. Previously Corporate Equity held a majority shareholding in the club and were in a position whereby they could name a price for their shares. They chose to ask 2.50 per share and gave first refusal to the Supporters Society with a time limit on raising the money. If the money was not raised in that time they would look to sell this majority shareholding elsewhere, most likely to a property   developer or similar. Supporters purchased shares at this price to avoid this happening.

Corporate Equity was a company that had no real interest in the club other than from a business point of view whereas now the shares are mainly in the hands of supporters who I would hope will be putting the future of the club first.

I have shares, including some that were purchased at 2.50, and am happy to transfer these into a community club at no cost. My hope is that others will feel the same way.

[Roman Mike]

Oliver, is there a schedule / sequence of events that you can share at this stage? I imagine there must be some be some key milestones by which certain things have to happen - not least of which, when does the £1.4M need to be raised by. It can't be indefinite. I am trying to get a sense of when we will know if this has succeeded or failed.

[OliverH]

Roman Mike -

No, it is not indefinite. The short answer is that we want the question settled by the start of next season.

The next step will be to develop a share offer prospectus and set up the delivery of the offer - this probably will take around 4 weeks.

We will almost certainly be looking to sell community shares online (as well as by cheque etc) and that will take time to set up - we are talking to microgenius.co.uk about this. Also draft rules & constitution for the new community owned club, etc. And apply to the tax authorities for Enterprise Investment Scheme (EIS) tax relief, which should allow people putting new capital into the club via community shares to claim up to 30% back off their personal income tax. Our business plan and financial projections need to be properly scrutinised by outside advisors. Supporters Direct will guide us through this process.

The launch will take place in early to mid-April - from this point people will be able to buy shares. (If you buy online via platforms like Microgenius, you authorise your debit/credit card for the amount but it is only deducted if and when the target amount is reached).

We expect the actual fundraising process to then last no more than 3 months - that is, it is likely to be a time-bound share offer that will expire. So no, it will not run and run! We need to take advice on this obviously but our current thinking would be an end-June to mid-July deadline.

[Major Icewater]

Still not clear as to what happens if an existing shareholder does not want to accept the nominal amount of £1 per share.

Surely those shares still have to remain in existence in some form and how can that situation  be accommodated.

Obviously it was simpler with the Bell as there was only one seller.  Also assume that seller wanted the pub/site's real value and not the  amount paid at time of  purchase.

I believe it was mentioned at the presentation evening that the community buyout needs to reach certain trigger points in percentage of existing shares bought out. This could lead to a situation when a handful of shares are still required to get over that level so those shareholders who have not sold could, in theory place a much higher selling price on their shares, as they become more crucial to the outcome of the project.

[Mark Tanner]

If the situation that Icewater is suggesting happens with people hanging on to their shares to the latest possible moment to get a higher price then these people really aren't fans of the football club.

If this community ownership model fails because of people being greedy what other options are on the table?

None!

So then the club folds due to not being able to pay the massive debts we have looming at the end of the April, which is in excess of half a million by all accounts. Or if it doesn't fold it will be forced to sell Twerton Park to pay the debts!

It's as clear cut as that in my mind, so lets all get behind this new venture and make as much money as we can before the start of next season.

[OliverH]

To clarify, we will pay no more than £1 a share to any shareholder. The £1.4m target figure does not include any provision for that. We also feel that all shareholders should receive the same offer - £1 a share, or the option to swap shares for community shares.

We will need to take control of 75% of the club's shares in order for Bath City FC to become a fully-controlled subsidiary of the community ownership vehicle, and therefore a community-owned club in the proper sense. If 26% refuse to sell at £1/share or transfer, then yes the bid will fail. But we are confident that we will reach at least 75% if not more.

EDIT: again, I want to stress that if the bid fails for any reason, anyone who has bought community shares gets their money back.

[Dave]

This is probably a stupid question as the answer seems obvious to me, but just to check... I have 50 shares, if I were to transfer them to community shares presumably they'd make up £50 of the amount I'd need to purchase one community share?

[OliverH]

We need to check exactly how the transfer process would work with Supporters Direct. I'll raise this in our next meeting with them.

My BEST GUESS is that each community share would be worth £1, but they would be sold in minimum lots of, say, 500. So if you had some existing shares you could swap them no matter how many you had, but to buy new shares would require a minimum investment.

Whatever the mechanics of it, we would seek a solution that made it as easy as possible for existing shareholders to transfer.

[OliverH]

The last post raises a question we'd like to put to you all. As reported in the Chronicle today, we have been leaning towards a minimum investment figure of £500 to buy community shares.

This is the same figure used by the Bell Inn. At our public consultation event, attendees filled in forms to say what they thought the minimum should be (less than £500, £500, £1000). It was evenly split between 'less than £500' and '£500'.

What do you think?

[Bristol Mike]

At the meeting it was suggested that finance options could be looked into. Is there any news on this as I would imagine a minimum of say 500 may be out of reach for many people but a small monthly direct debit may tempt far greater numbers

[OliverH]

Great point Bristol Mike, yes we are still looking at that. The most likely option would be 3 x £166.66 monthly payments, taken either before or after the deadline.

Also if we were to use the online share buying platform Microgenius, people could sign up in April to authorise a transaction in July - this would count towards the target but give enough time to save out of a monthly paycheck. Obviously there are always risks that people will not come through.

[2weirdtown]

I think a minimum £500.  I guess people could club together, say 2 paying £250 but obviously only one name on the share, or could they be in joint (or a made up) names (s)?

[kermit]

I'd say £500 minimum. I know that is possibly out of reach of many dedicated City supporters, but we need to reach out to a wider audience and if the start price is too low we will end up with lots of interest but not much money. I suspect that will upset a number of very important fans, but that is my view of it.

[OliverH]

Yes, if five people put in £100 each they have one share (or one lot of £500 worth of shares) between them - I don't think it could be a joint or made up name though, they'd just have to trust each other.

One suggestion was that local pubs popular with City fans could collect money and buy shares on behalf of punters, and act as a sort of informal co-op.

EDIT: Yes, Kermit essentially nails the dilemma. We don't want to exclude anyone, but on the other hand if the minimum is £200 and someone who could afford £500 only buys £200, we have work even harder to find other people. There is no easy answer, really.

[Dusty Lynfield]

After speaking up at the consultation meeting to consider a lower amount than £500, I am now thinking £500 is the sensible baseline. As Oliver mentioned, you could split this payment over three pay checks...this is what I'm planning to do.

[LB]

I assume that we really are at the "last chance saloon" - I fancy that if there was an alternative the board wouldn't have signed up to the idea.

What concerns me, and has been alluded to by others, is how such a large amount of money can be raised in such a short time. It appears that the board, as far back as the time when Geoff Todd said he would stand down as chairman if somebody came forward and put up a significant amount, has been looking for an investor. Presumably it is precisely because they haven't found one that we are where we are today, and I wonder why anybody would want to come forward now when their investment would give them less control than if they had done so previously. It is hard to see how the money can be raised otherwise.

I see from today's Chronicle that our previous chairman has come out of the woodwork saying that she supports the idea, but that it will only work if the ground is sold.

[Steve Whites Missus]

I'm still interested in the surplus funds required to survive year two.

Obviously raising the initial amount is a monumental challenge, but it would be a real shame after achieving that to be in a desperate position come season two.

I also agree with £500 as a baseline.

[OliverH]

Re: business plan and financial projections, that will all be in the community share prospectus.

We've identified some areas where we think revenue could grow, professional advisors have looked at our initial business plan and not laughed out loud, but we need to go back and take a closer look. It's probably not sensible for us to start putting forward business ideas on the forum until we're sure that they will go into the prospectus.

Re: general skepticism about whether we can raise the money in this timeframe, all I can say is that if enough people get behind us, we will succeed. I hope that investors big and small will see that we are offering something different than business as usual.

[Twerton Parker]

Regarding the position of those who can't afford £500 but would still like to be involved for a lesser amount, how about people applying to go on a "I can afford £xxx" list that are then made up into groups that between them can make the £500 for a share?

[OliverH]

That's a great idea Twerton Parker, let me pass it on to the group and ask Supporters Direct about past examples.

[SteveBradley]

I'd say £500 minimum.  I know that is possibly out of reach of many dedicated City supporters, but we need to reach out to a wider audience and if the start price is too low we will end up with lots of interest but not much money. I suspect that will upset a number of very important fans, but that is my view of it.

Also important to remember that there is a fixed cost to the club in managing every individual shareholding - e.g. handling paperwork, sending out certificates, sending out mailings every year etc etc. So the lower the minimum investment cost, the higher the percentage of it that is taken up by admin.

[bonzodog]

Well, at this current time it's out of my financial reach and I doubt I'm the only one.

[bonzodog]

I hope you intend to speak to Boots, Morrisons, Lidls, PCWorld, Co-op, McDonalds and William Hill all who have shops in the Twerton community.

[Bristol Mike]

This may be a silly question but where does this leave the society and it's members. Is the action group raising money for the society or is the society buying into the action group. By that I mean if 500 is out of people's reach they could still pay into the society.

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