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Town Set for Share Issue
Town Set for Share Issue
Monday, 3rd Apr 2006 00:01

Chairman David Sheepshanks has written to Town's loan note holders and large shareholders to gauge opinion on a new share issue tentatively scheduled for the summer.

The club announced that a new share issue was being considered at last year's AGM and have held meetings with shareholders over the last few months where new investment ideas have been discussed.

The Blues are not planning another general issue of shares like the one held in 2003/04 due to the large cost involved, although the possibility has not been ruled out for the future.

Town have outlined two new schemes, the first involving new investment from 100 of the larger shareholders, while the second would see all 3,300 existing shareholders given a chance to increase their investment in the club up to €2.5 million (£1.75 million), the point at which under law the club would have to go to the vast expense of producing and distributing a prospectus.

A third option, which could run along with either of the other two, is the issue of further convertible loan notes up to the value of £600,000 at an interest rate of 7%.

Sheepshanks says that the cash raised will be invested in Joe Royle's squad ahead of next season's expected promotion challenge. The club are keen to receive a response to the letter before the end of April so they will have time to strengthen the squad in the close season.

Town's financial position has improved significantly in recent months with chief executive Derek Bowden renegotiating the terms of the club's debts to its three main lenders (Norwich Union, Barclays and the Bank of Scotland). The agreement involves a virtual interest holiday for the next two seasons which will save the club £2 million a year.

Photo: Action Images

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