Lundinsponytail
Active member
- Joined
- 24 Dec 2017
- Messages
- 322
Very good read.
Could someone explain what the last bit of the chairman section about strengthening the capital base means in simple terms ?
Yes, broadly it means strengthening the underlying financial support for a company.
It usually applies to struggling firms who apply to their shareholders or banks for more funds, either by means of a rights issue (more shares, diluting the holding of anyone who does not take part) or an increase in debt.
I suspect in this case that you will see a 'porting of debt' to Tiger, a rights issue to start the process of wiping out the small shareholders and then an injection of debt from Tiger to fund the club (currently losing 150k a month).
The key figure to watch will be total debt. DE 'bought ' 4 million of Ian Lenagans debt for 1 pound. He then promised to wipe out any further debt accrued on his watch. So the maximum amount of debt 'ported ' to Tiger should be 4 million (And ideally nothing, as the club will not owe anybody anything, in moral terms, other than the 2.5 million that Lenagan lost and he is long gone).