RamsTrust and other supporters’ groups spoke with the club’s administrators, Quantuma, on 23/11/2021 to discuss the current position the club is in. The update was positive, and all details can be found below.
- How much detail have you seen or do you expect to see when it comes to the provenance of monies used as proof of funds as part of the Chris Kirchner bid? Are you comfortable with the extent of due diligence that has been completed by the club and the EFL?
We have performed thorough due diligence on the bid. We will do our level best to ensure the successful bidder will have sufficient funding and will be in the best interest of the club going forward.
- The EFL told us that they have already done some analysis into potential owners in order to help with the process. Chris Kirchner has indicated he has passed the initial tests – is there anyone else who has progressed to this stage? Has anyone failed these tests?
The only bidder who has been reviewed by the EFL so far has been Chris Kirchner – this was off his own back. He has passed the initial tests but there are more detailed reviews to be carried out. Other potential bidders are also close to this stage.
- How many potential buyers are still in the running – and how close are you to identifying preferred bidders?
There are 4 serious contenders and 1 or 2 on the periphery, but time may be against them. None have been put off by the EFL ruling.
- How many have access to the data room?
The 4 main bidders are all doing due diligence with access to the data room. There was engagement with them all yesterday and all are aware of the January target for completion.
- Carl said that you expect to identify a preferred bidder in 2-3 weeks – is this required? If a single bidder is selected, we are entirely at the mercy of that single bidder for timescales, rather than being a ‘race’ which may expedite the process quicker (as other clubs’ takeovers have been delayed once a single bidder is selected).
If a restructuring plan is required a preferred bidder has to be selected. We expect to select a preferred bidder in the next 2 weeks and this will be made public, with the intention to introduce them to supporters.
- Do you have a projected timetable up to completion of the takeover and exit from administration?
The target is to complete in January and exit administration. If we can agree a CVA the process will be quicker, a restructure could take a little longer if required.
- If the takeover is now anticipated to slip into late January, will you need to raise additional funds to reach this point?
We may do, but when the preferred bidder is selected they will need to provide a significant non-refundable deposit which will increase available funds. The delays have been largely due to negotiations with the EFL and the legal challenges from other clubs.
- How far have negotiations with HMRC progressed? Have you had direct discussions over the offer, or has it all been remote so far?
We hope to have agreement in the next 2 weeks, there have been sensible discussions – HMRC wants confirmation that nothing has been amiss in generating the debt and do understand the situation the club is in. We expect them to be sensible in negotiations as if the club was to be liquidated they would receive much less.
- Has anything in the Creditors report been unexpected?
- Have you been able to confirm the total debt figure buyers would need to cover?
Yes – depending on successful conclusion to discussions with HMRC.
- Have you confirmed the cost of the stadium buyers would need to include in the deal?
Yes – this is basically to cover outstanding debts against the stadium. MSD hold a debenture on the ground and have been supportive throughout the process.
- Have you looked into the implications of the Asset of Community Value status on Pride Park?
We do not believe this will cause any delays, but we do have a meeting with the local council where this will be discussed.
- Following the takeover, is the ground expected to be under direct ownership of the club, or will they still be owned separately?
All bidders are very keen that the club and ground are brought back together – potentially under a single holding company. To avoid possible excessive stamp duty costs this may be through buying the ground’s holding company shares rather than just Pride Park itself.
- Have you made any progress dealing with the legal claims from Middlesbrough and Wycombe? Why are the claims against the club rather than the EFL? Does this need to be resolved before the takeover can progress?
There are detailed discussions being held over these claims – which are against the club and not the EFL, though these have been discussed with the EFL.
- Do you feel the cost of the legal challenge to the Administration penalty was money well spent?
Yes, the appeal ensured a resolution was reached more quickly and avoided this dragging on delaying a takeover. The relationship with the EFL has improved since the beginning of the administration, and they are being supportive in the process of assessing potential bidders. The points penalties and potential financial penalties could have been much higher – and could have continued into future years without the negotiations.
- Did any of the potential buyers encourage the decision to accept the agreed penalty?
All bidders wanted a resolution as quickly as possible in order to move forward with the process.
- The EFL also indicated the Business Plan was agreed with the club and that they agreed not to discuss – so we should ask you. Can you confirm:- The Business Plan is in place to ensure the club stays within Profit & Sustainability rules for the current accounting period – so if it is not adhered to we could incur further penalties next season?
The Business Plan cannot be breached as the EFL will not sanction transfer payments or contracts outside the plan, so there will be no further penalties in future seasons. Revenues for this season are expected to be £7m lower than pre-COVID comparisons, but with the agreed business plan we will remain with Profit & Sustainability limits.
- Are we able to sign players again in January within the permitted player / Business Plan restrictions?
We are able to sign players within the restrictions, but we cannot pay transfer or loan fees this season.
- Whether an existing player, who isn’t a permitted player because he hasn’t made 3 league starts at the point of his last registration, can play for the first team? Under the agreement, academy players can play for the 1st team. We currently have 20 players who are considered ‘permitted players’. When a player makes their 3rd appearance, will they then be considered a ‘permitted player’ and then take one of the 25 squad slots?
Yes. This restriction only applies for League games (not the FA Cup).
- Now the points penalty is confirmed, have any decisions been made prior to the January transfer window? For example, will you move to offer players contract extensions (in line with the EFL’s agreed Business Plan) or agree who should be sold rather than leaving for free in the summer? Or will this be deferred until a new owner is in place?
Discussions are taking place now with Wayne Rooney planning for January and decisions will be taken when required.
- Have any discussions regarding the January window taken place with potential buyers?
No, not yet – contingency plans are being set but when a preferred bidder is selected they will be involved. We have already turned down bids for some of our players.
- Are any of the short-term player deals being renewed? Do Phil Jagielka’s and Sam Baldock’s contracts expire at the start of Jan or the end of the year?
These discussions are taking place as we speak.
- Is there anything we can do to help going forward?
All supporters should remain positive and encouraged that the process is moving forward as intended and the club will have a bright future. We are happy to meet with supporters’ representatives again soon.
- Concerns have been raised over payment of storage costs for club heritage items – can these be transferred to supporters if required to avoid the threat of losing them?
The club has now made arrangements for ongoing payment for storage costs, and we anticipate that new owners will want to continue with this arrangement to preserve the items. If there are further issues we will look at other options to ensure they are preserved.
- Will the club acknowledge the fantastic generosity of supporters in donating to St. John Ambulance to ensure they have not lost out as a result of administration?
The club are very happy to acknowledge and praise this gesture.
- Will the club explain Stephen Pearce’s continuing involvement with the club?
We do not want to comment on individual employees – all staff were assessed at the beginning of administration to identify those required at the club (particularly rather than paying higher fees for additional administration staff). Stephen Pearce has played a vital role in negotiations with the EFL and the appeal, and continues to have a role at the club. Some of those present suggested it would help SP to do a media interview, but the meeting understood reasons why he might not be able to. It was agreed chants which may threaten his family were out of order and should be spoken against where possible.