Share offer could provide £1.7m fund
THE new Blues boss could have a fighting fund of up to £1.7m if a new share issue is successful.The additional money is the maximum allowed to be raised under Ipswich Town's plans to ask its supporters and existing shareholders to increase their stake-holding and if the full amount is taken up then that would represent a third of the club's issued share capital.
By Derek Davis
THE new Blues boss could have a fighting fund of up to £1.7m if a new share issue is successful.
The additional money is the maximum allowed to be raised under Ipswich Town's plans to ask its supporters and existing shareholders to increase their stake-holding and if the full amount is taken up then that would represent a third of the club's issued share capital.
But all the monies raised should go to the new manager after final details of the rescheduling of the debt to the club's major lenders became clearer.
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Instead of repaying interest on the £27m debt to bondholder Norwich Union, who provided the capital to build the North and South Stands, for the next two years, Ipswich Town are allowing the insurance giant to take an almost 10% stake in the company.
This effectively means Norwich Union have invested £3m into Ipswich Town in return for 10% of the club. The deal makes the club's major lender an interested party to the Blues achieving promotion to the Premiership, which in return means a far greater likelihood of getting its money back.
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Norwich Union have also shown their faith in the current board by not insisting on having a director of their own in place, although they have been entitled to have one since the CVA was agreed.
Blues chairman David Sheepshanks was last night delighted to confirm the move and said: “It is fantastic news for the club and represents great value for us. It indicates Norwich Union's commitment and support for what we are trying to do and for that we are very appreciative.”
An extraordinary general meeting has been called for June 5 to pass the motions allowing the share issue and to ratify Norwich Union's agreement, although with the amount of shares held by the board and the majority shareholders, that is expected to be a formality.
The share issue launch, which chairman David Sheepshanks last month revealed to the EADT was going ahead, is designed to raise cash for the new manager to use to strengthen the squad for a two-year assault on promotion to the Premiership.
A maximum of 170,130 ordinary shares will be issued at 25p each, a provision made to allow Norwich Union to take up a 4.99% stake this September, followed by a further 4.99% next September and allow for an issue of the remaining £840,000 of convertible loan notes.
The board are also seeking permission to have the discretion to limit where appropriate the accumulation of shares greater than 15%.
Currently, director Holly Bellingham and shareholders Michael Spencer and Kevin Britton, hold between 10 and 15% each, worth almost £2m.