Sunday, 8 August 2010

Summary of disposal of Charlton Letter

I received the letter from Sturat Butler Gaille regarding the management buy out of Charlton by Richard Murray, I have summarised as best I could but may have missed some or misinterpreted - new word of the day Novated - but hopefully for those that have not received the letter of who have not read it,it willgive you an idea of what its all about, constructive clarification of any points misinterpretted would be appreciated.

The disposal letter is a very boring document!
1. Over the last three years £14 + mill has been raised by the directors through Convertible corporate bonds, I addition £7m has been raised in working capital in Directors loans. Entitlement to be paid interest has continued to be deferred.
2. In addition, personal guarantees have been given in respect of the overdraft facility provided by a group of the directors.
3. Third parties have contacted the club regarding investment over the last 12 months and including during this summer, but this interest has proved fruitless.
4. On 14th August 2009 a consortium approached the club to purchase the full shareholding, however due diligence showed that the consortium did not have the financial funding to complete the purchase.
5. Richard Murray has agreed with his fellow directors and bondholders to effect a management buy out, which will enable him to provide further personal financial funding and time to seek further investment.
6. Murrays company will buy all shares for £2.00, with the discharge and or assumption of certain liabilities.
7. The holders of the Bonds (£14+m), have converted the bonds to £0.30 shares, removing the debt from the balance sheet. All rights to payment of accrued outstanding interest on the bonds has been waived.

This is where it gets complicated and uses big words I don’t know, so hopefully I have got it right.
8. The Directors loans have not been waived, however repayment terms are that no repayment will be made until such time as Charlton return to the premier League.

Interest on Director Loans will only be paid in the event that the club is competing in the Championship. Any interest accrued under the directors loans will be waived to the date of completion of the disposal..
9. The Directors are all in agreement.
10. The company formed by Richard Murray is BATON 2010 Ltd and the shareholders are Richard Murray, Andrew Murray and Hannah Murray.
11. Richard Murray is providing further working capital which is available to draw down during 2010/11 and has personally guaranteed £1m overdraft facility.
12. The company name will change from Charlton Athletic plc to CA plc.
13. A General Meeting to ratify the transfer will be held at the Valley on 23rd August at 11.00 am

Finally,in summary CA Plc is being wound up as it no longer has any assets or liabilities, which have been sold to Baton and all of its liabilities having been passed on.


Mark said...

Sounds like a fairly standard MBO, which leaves the club relatively debt free with Murray the only real creditor. Think we are very lucky to have him...

Anonymous said...

Charlton seem like the shares to buy and the management have done so! This will leave the club in a much better debt position than some of the major premier league clubs!