Since we published our initial documents, members have asked several questions and for clarification. Below are answers to some of the most frequent ones.
We also have several upcoming events and members are free to get in touch with their queries. Members can get in touch via contact@thedonstrust.org.
As new questions come in, we will be updating this Q&A on the Dons Trust website.
You can read more background here: https://thedonstrust.org/majority-rule/
Members might also want to listen to some of the following podcast interviews that have covered the topics:
Official Podcast with Graeme Price (DTB and AFCW PLC board member)
Same Old Wombles with Graeme Price
Same Old Wombles with Kris Stewart and Charlie Talbot (both ex-DTB and PLC board members)
What safeguards and protections are in place if these votes pass?
There are several safeguards in place in both the rules of the Dons Trust and the articles of AFCW PLC, they include:
- We would still need a category B restricted action vote of the members of the Dons Trust to pass to be able to issue shares beyond the 6% or so that we have permission from members to sell now
- The Dons Trust (DT) would still own the majority of shares and voting rights on the PLC – the articles say at least 50.01% of the voting rights
- The DT representatives on the AFCW PLC (PLC) board have the power to block a vote and make sure that the right decisions are referred to the Dons Trust board (DTB) and then on to DT members where appropriate
- The DT representatives can appoint directors to the PLC board and we appoint the PLC chair, who reports to the Dons Trust regularly.
REMINDER: If the vote passes, then the DT would still need to pass a category B restricted action to issue any shares
Why are we doing this now, when and not waiting until we have an investor lined up to then do the Restricted Action votes?
At the moment, no potential investors are waiting in the wings. This action is being taken to prepare the ground for any investor who is interested in AFC Wimbledon.
The change in rules would mean we can go to investors with total clarity on how much equity we have and what that means, meaning everyone can do their due diligence work without operating in the dark. The protections of DT members’ approval and percentage limits mean that we will still get to vote on any investors that emerge.
Does the DT membership get to approve any new investors (and if so at what percentage of equity/voting rights)?
The DT would need to pass a category B restricted action to issue any shares over the c6% we are allowed to issue at the moment and therefore members could either approve or disapprove any investor that comes forward.
What about Plough Lane, we’ve built this fantastic community asset, how do we ensure we never lose it?
You can read more about our protections here:
https://thedonstrust.org/2024/09/13/dons-trust-asset-ownership-how-we-can-ensure-protection-of-plough-lane/
Would this make AFC Wimbledon more vulnerable to losing fan ownership?
No, because of the high (and unchanged) threshold to pass any restricted action. This means that unlike other clubs owned by fans who have sold out to private owners in English football, we have extra protection and reassurance to ensure we remain so. This is especially important because we don’t have the kinds of special protections in football or law, as some other countries where fan ownership is normal, for example, Germany or Sweden.
We also believe that giving the club greater financial flexibility for the future while protecting fan ownership should allow us to continue to grow and generate more income – and that sporting and financial success is the best way to protect our status.
What do I do if I disagree with this proposal?
You can cast your vote against it, abstain or not vote at all. We are all proud of our democractic processes and part of that is choosing to participate or not. However, as a board we would love to have the views, either way of as many people as possible, through their votes.
The boards understand that for some people 75% ownership and the additional shareholder rights that level of ownership guarantees are a red line.
But if this proposal does not pass, the club will face a more uncertain financial future, will need an even higher number of bondholders to consider rolling over their investments at no increase in interest rate to keep borrowing costs even at their current levels and almost certainly have to explore other routes to financing with a resultant impact on budgets going forward.
Why are we voting on this now and not when there is an investor ready?
This is not a vote in favour or against a specific investor. This proposal has been put forward for two reasons. The first is that we currently have a level of debt (to bond holders) which will need to be re-paid.
But it would not be wise to assume that we will always have the profit available to cover the debts. That is why we need a back-up option – the ability to sell a limited amount of equity to an investor (or investors) to raise capital whilst not risking majority fan ownership or control of our main asset – the ground.
Secondly, we are planning for the future. For the club to be sustainable in higher divisions, we will need more income. The money we raise from investors will allow us to pay down debt, reduce our interest burden and invest to grow. All of which helps our playing budget.
Why do we have to drop down to 50.01%? Why can’t we just sell a little more equity and drop to 65% or 60%
In reality, there is very little difference between the Trust owning 50.01% and any other amount up to 75%. Company law gives specific protections at these two levels, but additional protections aren’t given for any amount in between.
That is why we have chosen the 50.01% level. However, that doesn’t mean that any new investor would automatically take the Trust’s level of control down to 50.01%.
We already have a provision that means that no single third-party investor can own more than 15% of the voting shares.
And new investors might make an offer (which DT members would get to approve) for an amount they choose – up to 15%. So if new investors do come forward, we might see the DT holding drop to a figure between 50.01% and 75%.
What is a Special Resolution?
A special resolution is a type of formal decision made by a company’s shareholders (in this case the Dons Trust and the other minority shareholders).
It requires a higher level of approval than a normal decision, known as an ordinary resolution. Specifically, at least 75% of the shareholders who vote must vote in favour of the special resolution for it to pass.
Special resolutions are used for significant decisions that could have a major impact on the company. Some examples of decisions that typically require a special resolution include:
- Changing the company’s name
- Amending the company’s articles of association
- Reducing the company’s share capital
- Winding up the company
- Approving a merger or acquisition
In essence, a special resolution is a safeguard to ensure that major decisions affecting the company are made with the support of a significant majority of shareholders.
If we reduce our ownership to under 75% share of the voting rights, we would need the DT and some of the minority shareholders to vote in favour.
Minority shareholders could never pass a special resolution on their own.
If minority shareholders formed a block that owned over 25% of the voting rights they could block special resolutions from being passed. The DTB and PLC boards believe that this is an unlikely situation and the trade-off is worth it for the financial opportunity.
Members can see where we have used special resolutions in the past on companies’ house and they include the following:
Amending the articles of association of AFCW PLC (including in 2003, ‘22 and ‘24)
Issuing new shares (including in 2003, ‘04, ‘06, ‘13, ’14, ’15, & ’20)
Changing the number and rules around the appointment of directors (including in 2022 and ‘24)
What happens in the future if fans want to sell the club? Is this possible?
It would of course still be possible for members to decide to sell the club at some point in the future – but this would remain a restricted action with exactly the same high barriers to passing as before. Based on all board consultations and fan surveys on the subject – this is not something that the vast majority of members want to consider.
All the current board members are strongly opposed to this as an option.