Special General Meeting - Update & Briefing Note
We have the Special General Meeting of the Trust coming up next week. Thank you to all members who called-in to our drop-in session before the Barrow match, or stopped us around the stadium, and to those who have emailed in.
Please see below a briefing note for Trust members on the new ownership model for the football club. We have based this on the questions and queries we have had coming in. We hope that you find this useful.
Please remember that we have another drop-in session in the marquee near the entrance to the Bisley Stand at the Bradford City match on Saturday. We will be there from 1.30 to 2.45 p.m. Please do call in and see us.
More information on the preferred bidder will be following later this week.
Newport County AFC: The future ownership model
Explaining the situation and process
Produced by the Newport County AFC Supporters’ Trust
The importance of the Newport County AFC Supporters’ Trust: The Trust is a Community Benefit Society with a membership of around 1200 supporters of Newport County AFC. The Trust is very important to the football club because, since 2015, the Trust has been the majority shareholder in the club and holds 78.8% of the 269,000 shares issued to date. The remaining 21% of shares are owned by around 600 supporters, the majority of whom hold a small number each dating back to the formation of the new football club in 1989.
The purpose of the Special General Meeting of the Trust: The special meeting has been called to consider and vote on a proposal to sell a majority shareholding in the football club to a new investor and owner in the club. The football club needs significant new investment to deal with its creditors and to get the club back onto a sound financial footing. The financial position of the football club, and the background, has been explained at the series of meetings held over the summer. This information was also published in the local press.
Potential investors in the football club: Following a number of initial enquiries, two separate bidders have come forward. Their identities will be revealed later in the process. The bidders have been invited to come forward and make their own proposal to both invest in and then run and direct the club in return for a majority shareholding.
Working with the bidders: The two bidders have worked closely with the Board of Directors of the football club in developing their proposals and in completing their own due diligence. The bidders have been given extensive information about the football club and its finances, budgets, and leases and contracts. The Board is evaluating the two bids and will recommend their preferred bidder. The preferred bidder will be invited to attend, present their proposal, and answer questions from the floor. The Board is responsible for running the football club; this extends to working with the bidders and making a recommendation to the Trust membership which is in the best interests of the club and Trust. The process being followed has been agreed with the national Football Supporters Association (FSA).
Presenting the preferred bidder: An outline of the proposal of the preferred bidder, and confirmation of their identity, will be sent to Trust members closer to the time of the meeting. The reasons why one bidder is to be recommended over the other will be explained at the meeting.
The current Board members: The current Board of Directors of the football club is made-up of five members directly elected by the Trust (Joe Crocker, Mike Everett, Bob Herrin, Shaun Johnson and Paul Marks) and three co-opted directors (Mark Crook, Peter Madigan and Jon Pratt).
Advice the Board has been receiving to help it in this task: The Board has relied upon an independent voluntary person (Colin Everett) to lead this process on their behalf. They have acted as both an advisor to the Board, and to potential and actual bidders. The Board is also receiving advice and support from the Football Supporters Association (FSA) and a legal advisor recommended by the FSA. We have closely followed the advice of the FSA in this whole process.
Date of the Special General Meeting of the Trust: The meeting will be held on Thursday 28th September at Rodney Parade at 7.00 p.m.
Entitlement to attend the Special General Meeting: Only Trust Members (16 years of age and older) can attend. To be eligible to attend you must have joined the Trust no later than 11th September this year and still have an active membership on the day of the meeting. A notice of the meeting was sent to Trust members on Wednesday 13th September.
Arrangements for attending the Meeting: Attendance is in person as per the rules of the Trust. Members who cannot attend can appoint a proxy voter to attend and vote on their behalf. Details of how proxy voting works were included in the notice of the meeting. The meeting will not be streamed live.
How the meeting will be run: At the meeting we will explain the process of how we have engaged with bidders who have come forward to invest in the club. We will present the preferred bidder who will outline their proposal and take questions from the members. A ballot will then be held on a set of resolutions to sell a majority shareholding to the preferred bidder on the terms as set out in their proposal.
How the ballot will work: The ballot will be run using ballot papers and not by a show of hands. The ballot paper will ask members to vote for or against the proposal to sell a majority shareholding (from within the Trust shareholding) using the wording of the resolutions published in the notice of the meeting. The result will be declared before the members. The vote will be made on a set of extraordinary resolutions; this means that at least 75% of the votes cast must be in favour of the resolutions for them to be passed.
Extraordinary resolutions: under the current rules of the Trust these resolutions could have been presented as normal resolutions – meaning that only a majority of those voting in the ballot would have to be in favour for the resolutions for them to be passed. We have decided, in this particular case, to class these resolutions as ‘extraordinary’. As this is such a big decision for the future of the football club, we would like to see a large majority to be in favour of the direction we take as a body of Trust members and supporters.
Financial benefits: all of the funds being offered by the new investor will be invested direct into the football club. There will be no opportunity for community shareholders with the Trust (that is the members who contributed to the purchase of the club by the Trust back in 2015) to sell back their community shares or receive a dividend. There will be no financial benefit to any director of the football club.
What happens next: If the resolutions are approved then the owner elect will need to complete the EFL process for the acquisition of the football club (‘Acquisition of Control Guidance’). This extensive process will involve the bidder, the club and the EFL and could take around 8 weeks to complete. Whilst this is taking place, the Board and the bidder will work on a share acquisition agreement or contract based on the terms of the proposal which was presented to Trust members at the special meeting. Once all of this work is completed satisfactorily, the new owner will take over the club. If the resolutions are not approved then the Trust will need to consider its options. These options would include renegotiating with the current bidders, inviting new bids, and raising its own funds to retain the ownership of the football club as is.
A handover between the Board and the new owner: Once the new owner has taken over then the current Board of Directors will stand down from the football club as one. The current directors and volunteers will offer whatever help and support they can to the new owner for them to settle-in. The Trust Board will continue in place to oversee the work of the Trust itself.
The future for the Trust: The Trust will continue and will be an important partner with the new owners. The Trust will remain as a Community Benefit Society as is the case with trusts who are minority shareholders in other football clubs in the EFL and the non-league pyramid. Both bidders see an important and ongoing role for the Trust and will offer it representation on the Board. The current Trust membership stands at around 1200 and the Trust aims to continue to raise a minimum of £100.000 a year to support the football club. The Trust will publish an update on its current membership and finances shortly.
Composition of the Board of Directors under a new owner: It will be down to the new owner to decide who they appoint to the Board to work alongside them. However, if the share acquisition agreement makes provision for one or more Trust members to be appointed as directors, then the Trust will be represented on the Board going forward. How the Trust chooses to elect or appoint its own directors will be down to the Trust itself, and should be done according to its own constitution and rules.
If you need more information: Please make contact with the Trust using the special email address sgm2023@ncafctrust.org
