Question on the potential debt to equity swap

I've been harping on for a while about looking forward to this one day happening but when I've had a good think about it I'm confused to what it actually means.
In my head I was thinking that VT would wipe out the £83 million plus worth of debt, and in return would get a greater stake of the clubs shareholding. Could someone confirm if this is actually how it works??

The reason I ask I was wondering where the extra shares would actually come from??

Here's what I mean (all these ownership percentages are just made up for illustration of my question)

VT owns 55 % of ccfc
PMG owns 15%
Borley owns 5%
Sam owns 10 %
Others own 15% ( as I said those names and figures are totally made up)

So if the swap happens and the £83 million plus is wiped were does the extra shares for VT come from if all shares in the club are already distributed (assuming they are) ?????

Can someone help me understand this??

they just issue more shares, so that each share in issue effectively becomes worth less.

they just issue more shares, so that each share in issue effectively becomes worth less.

So the other shareholders effectively lose out?? But maybe only short term because the debt free status of the club drives the prices back up???

they just issue more shares, so that each share in issue effectively becomes worth less.

So the other shareholders effectively lose out?? But maybe only short term because the debt free status of the club drives the prices back up???

For this to happen tan needs to buy all the other shares.

From my understanding if tan raises his share capacity to 51% then he can force all other shareholders to sell their shares. This I believe he will do as it will making the swooping of debt to equity a lot easier.

Personally I feel he wants Sam's share and is trying to include them in the Langston deal. I could be off the mark but that would be a good move for him. That would take him close to the 51% and buying some other shares would then take him over that mark. That would result him in making a substantial saving buying everyone eles share.

they just issue more shares, so that each share in issue effectively becomes worth less.

So the other shareholders effectively lose out?? But maybe only short term because the debt free status of the club drives the prices back up???

For this to happen tan needs to buy all the other shares.

From my understanding if tan raises his share capacity to 51% then he can force all other shareholders to sell their shares. This I believe he will do as it will making the swooping of debt to equity a lot easier.

Personally I feel he wants Sam's share and is trying to include them in the Langston deal. I could be off the mark but that would be a good move for him. That would take him close to the 51% and buying some other shares would then take him over that mark. That would result him in making a substantial saving buying everyone eles share.

Yea,thats the gist of it I think.

they just issue more shares, so that each share in issue effectively becomes worth less.

So the other shareholders effectively lose out?? But maybe only short term because the debt free status of the club drives the prices back up???

There are two parts to share capital

Authorised - the total amount that can be issued without going back to the shareholders for permission to issue new shares

Issued - the amount of shares actually issued to date out of the total allowed.

At a previous EGM the shareholders approved a big increase in the authorised share capital , giving lots of "headroom" to issue new shares as and when the board saw fit.

From memory (I will have to look up the old paperwork to confirm) however , there was only enough increase to allow just under £40m of new shares to be issued and VT`s debt is already over that amount so a new EGM will have to be called to increase the amount further to allow all of VT`s debt to be converted into shares.

they just issue more shares, so that each share in issue effectively becomes worth less.

So the other shareholders effectively lose out?? But maybe only short term because the debt free status of the club drives the prices back up???

For this to happen tan needs to buy all the other shares.

From my understanding if tan raises his share capacity to 51% then he can force all other shareholders to sell their shares. This I believe he will do as it will making the swooping of debt to equity a lot easier.

Personally I feel he wants Sam's share and is trying to include them in the Langston deal. I could be off the mark but that would be a good move for him. That would take him close to the 51% and buying some other shares would then take him over that mark. That would result him in making a substantial saving buying everyone eles share.

Yea,thats the gist of it I think.

The "pull through" option only applies if a shareholder gets over 51% and then sells his shares to someone else. He can then force the other shareholders to sell their shares to that same buyer for the same price.
It is not there so that VT can force people to sell their shares to him. But there may be a loophole if VT were to sell his shares to another company he controls.

they just issue more shares, so that each share in issue effectively becomes worth less.

So the other shareholders effectively lose out?? But maybe only short term because the debt free status of the club drives the prices back up???

There are two parts to share capital

Authorised - the total amount that can be issued without going back to the shareholders for permission to issue new shares

Issued - the amount of shares actually issued to date out of the total allowed.

At a previous EGM the shareholders approved a big increase in the authorised share capital , giving lots of "headroom" to issue new shares as and when the board saw fit.

From memory (I will have to look up the old paperwork to confirm) however , there was only enough increase to allow just under £40m of new shares to be issued and VT`s debt is already over that amount so a new EGM will have to be called to increase the amount further to allow all of VT`s debt to be converted into shares.

If tan brought those shares with his outstanding debt would that take him to 51% or over?

they just issue more shares, so that each share in issue effectively becomes worth less.

So the other shareholders effectively lose out?? But maybe only short term because the debt free status of the club drives the prices back up???

There are two parts to share capital

Authorised - the total amount that can be issued without going back to the shareholders for permission to issue new shares

Issued - the amount of shares actually issued to date out of the total allowed.

At a previous EGM the shareholders approved a big increase in the authorised share capital , giving lots of "headroom" to issue new shares as and when the board saw fit.

From memory (I will have to look up the old paperwork to confirm) however , there was only enough increase to allow just under £40m of new shares to be issued and VT`s debt is already over that amount so a new EGM will have to be called to increase the amount further to allow all of VT`s debt to be converted into shares.

If tan brought those shares with his outstanding debt would that take him to 51% or over?

Easily.

There are currently £10.1m of shares in issue of which VT holds £3.4m or 34%. If another £40m were issued to him , that would take him up to £50.4m out of £60.5m or 83%. By coincidence , that is the same percentage as Sam Hammam`s company Rudgwick used to have before he was forced out of the club.