Dons Trust chair Mark Davis explains a proposal that will be discussed by members soon.
Dons Trust members will either have received, or be about to receive, papers for our next special general meeting (SGM), which will be on Thursday 13 September. The SGM will be an opportunity for the board to update members on progress with the new stadium, including the work on refining the cost estimates and finalising a specification for the best stadium that we can realistically afford from day one.
But there is one particular issue that we will also be explaining to members at the meeting, ahead of seeking formal approval: to issue new shares in AFCW PLC, the holding company through which we own AFC Wimbledon.
“we are investigating the opportunity to raise additional money by issuing new shares in AFCW PLC”
The background is that we need to obtain funding for the new stadium. We are raising money through the sale of our current stadium to Chelsea and are due to receive a substantial contribution from Merton Catalyst, our development partner at Plough Lane. We also intend to borrow up to £7 million from a financial institution. However, we are also investigating the further opportunity to raise additional money by issuing new shares in AFCW PLC.
You may remember that we funded part of the purchase price of our current stadium, 15 years ago, through the sales of shares in AFCW PLC, whilst ensuring that the Trust always remained in ultimate control. That is what we are investigating doing again.
If we were to pursue this, we would issue the shares via a crowdfunding platform. This would give us the opportunity to access a wider audience whilst giving Dons Trust members, current shareholders and other AFC Wimbledon fans the first opportunity to get the shares.
“we think it will be helpful as we close in on finalising our stadium costs and opportunities”
The club is working with a couple of crowdfunding platforms and is preparing draft marketing materials to assist a launch. Crowdfunding has been used recently by other football clubs and we think it will be helpful as we close in on finalising our stadium costs and opportunities.
Any new shares issued in AFCW PLC will carry the same rights as existing shares, so people who subscribe to the crowdfunding won’t get any special rights that our current shareholders (including the Dons Trust) don’t enjoy. We will also make sure that the Dons Trust retains at least 75% of the votes in AFCW PLC. This is a level of shareholding that gives the Dons Trust strong control of the club, since we will have sufficient votes to approve resolutions and to block any resolutions put forward by minority shareholders. It is also the percentage that we agreed was appropriate when we first launched a share issue back in 2003.
“if you are a Dons Trust member then it is vital that you use your vote, when the time comes, to give us approval to proceed”
Any share issue won’t be ready for launch until later this year, so it isn’t yet time to decide whether you personally want to buy shares. However, if you are a Dons Trust member then it is vital that you use your vote, when the time comes, to give us approval to proceed. The reason for this is that the sale of shares in AFCW PLC is one of the Restricted Actions in the Trust’s constitution. As such, it needs at least: half of our members to vote; three-quarters of the votes to be in favour and 40% of our members to vote in favour. That is a high hurdle to jump. We have done it before, when you approved the sale of our current stadium to Chelsea, but we cannot afford to be complacent.
The SGM documentation sets out more information. If you’re a Trust member, please read it carefully and we hope to answer any questions you may have about it at the SGM on Thursday 13 September, before launching a formal vote very shortly afterwards.
Finally, it is essential that we have up-to-date contact details for members. If you don’t receive the SGM documentation very shortly, please contact secretary@thedonstrust.org (but check your spam folder first if you receive our communications via email).