What next for 1883
by Scott Thornberry - 23rd February 2012
As has been reported, Darlington FC 1883 has reached its initial target of £250,000 through a shares scheme. The company is now pressing ahead with the next phase of its quest to take the football club out of administration and complete its transition into a community owned club. Securing a long term, sustainable future for Darlington FC remains the overarching objective of everyone involved in the project.
Karen Glencross, a member of the Darlington FC 1883 Ltd interim management board, comments:
“We have been hugely encouraged by the public’s response to the shares scheme. Not only have hundreds of people and businesses been buying shares on www.buydarlo.org, but we have also been processing loads of requests in the Dolphin Centre. We have reached our first target much faster than we expected, which reinforces our belief that we can succeed in our aims.
“The interim management board really appreciates the faith that people have invested in what we are trying to do and it is vital that we complete the job and justify that. Many people have been very generous, but we need to push on and raise the next £500,000 as soon as possible.
“At the same time, we understand the need to be transparent about how the initial £250,000 will be used, so we will be as open as possible in letting people know about what happens next. Meanwhile, we will also continue to develop our longer term business plan, designed to deliver a long term future for Darlington FC. And alongside all of this, the manager and team need our support more than ever, starting with the crucial home game on 3rd March.”
To follow are answers to some of the questions that have most frequently been put to the interim management board.
Questions and answers:
What is this money to be used for?
- Paying the football creditors in full;
- Working with our corporate recovery advisor, Andrew Cawkwell, head of special situations at Muckle LLP, and the administrator to secure the agreement of the non-football creditors under a Company Voluntary Arrangement to pay them in full over 3 years;
- Providing working capital to help fund DFC 1883 through until the end of the season
- Ensuring the League and Conference rules for transferring the right to play football in the Blue Square Bet Premier League to Darlington Football Club 1883 Limited;
- Completing the acquisition of the business and assets of Darlington Football Club 2009 Limited from the administrator, Harvey Madden;
When will the money be passed over to DFC 1883?
- The money won’t be committed until agreements with DFC 2009's creditors are in place
- Until then the £250,000 will be held in our solicitor’s client account
- If there are problems that emerge before the money is passed to DFC 1883 then investments can be returned (i.e. while money is still held by Crowd Cube before final share capitalisation takes place)
What are the next steps?
- The legal structures that govern the operation of DFC 1883 can now be finalised
- Practical matters can now be advanced with the administrator on the timetable to implement the CVA and complete the sale and purchase;
- The process to settle with creditors can be started
- Financial work can be completed on the cashflow forecast to the end of the season and the baseline financial plan for next season.
How long will this take?
- Clearly we are constrained by the process outlined and the need to be diligent, but we are hopeful a timetable that we can work towards may emerge in the coming week.
- The desire to expedite the steps above in order to relieve the pressure on the team and manager are recognised, but this must be balanced against the need to be financially prudent and diligent. The next home game will be a massive chance to show our backing for Craig and the team - this will speak volumes when compared to anything we can say or write.
Why is the next £500,000 important?
- The first £250,000 clearly does not provide sufficient funds for the ongoing financial sustainability of DFC 1883
- Meeting the next two targets of share issue is vitally important in order to cover cashflow until the start of next season and to provide a significant injection of working capital for the club to operate on a competitive basis going forward.
Why was the first £250,000 offered on a two for one basis?
- The first £250,000 was issued in this way to reflect the increased risk profile to investors’ money committed to the first phase of the life of DFC 1883
- It is encouraging that the first phase was taken up by so many supporters and supporters’ groups and it right that fan engagement and support is rewarded through the two for one offer
What if I missed out on the two for one offer?
- There is still another £500,000 to be raised and these remaining shares offer exactly the same benefit and rights as the first £250,000, but from now on £100 of investment buys £100 of shares.
When will I get my shares?
- Share certificates will be made available before the first AGM of DFC 1883 in the summer
- The process by which shares will be issued and made available will be announced later in the season.
To invest in Darlington FC visit www.buydarlo.org.