Filing by BFC (2002) at Companies House

I am not sure that I totally understand this but according to a document submitted to Companies House the 1000 shares with a nominal value of £1 (£0.001 each) were sold for £6,288.07 each. That would make the selling price of the club, excluding land and buildings £6,288,070, much less than the £20m that has been touted about.

It also looks like the nominal share capital (the amount of shares available to purchase) has been increased by 2000 shares, so presumably our new owners intend to invest through share capital rather than loans.

As I say, I am not used to reading these forms so I may have got the interpretation wrong. Mr Cryne had also made a large loan to the club, and this may also have been repaid as a separate transaction after the new owners injected money into the club, or even out of previous transfer profits (those accounts are not made public until 28 February 2018).

 

I think that just about covers Barry’s biscuit bill

 

I'm guessing, but I presume one explanation would be that the remainder of the consideration could have been to pay off the considerable loan debt to the owner built up over Mr Cryne's tenure?

 

If so, then that gets to near the £20m bandied about.

So the business is sold through a share sale - the next step is the assets held by OCA.

Expensive do this.

 

The loan that Mr Cryne provided to BFC could equally have been provided by a bank. It is a debt of the company to the loan provider and is nothing to do with the worth of the company. If the ownership and the loan were through separate entities, you would not be tempted to add the two together in order to arrive at the company's worth, and that is the case here. The new owner pays Mr Cryne for his shares and the company repays, or perhaps repaid the loan out of transfer fees received.

 

Well, the fact that the loan exists intrinsically affects the value of the ownership doesn't it. The ownership in and of its own right would be worth more if there was no existing debt, and less with it. I would be surprised if the total consideration paid for everything totals the £6.3m; although it's quite possible I guess that the remainder of the consideration will come through in the OCA land and buildings element.

 

There may have been no loan. It could have already been paid off from transfer profits. In that case, cash at bank would also be lower. Thus, the loan has no effect on the value of the company.

You may be right. The balance of the £20m may be in the land and buildings, in which case, the council and Mr Cryne have had better value for their investment in the land than Mr Cryne had for his investment in the football club. Do not forget that as well as the price he originally paid for the club, he has had to pay in donations in order to reduce trading losses and keep us the right side of FFP regulations. Remember also that most of the land is in green belt, so the land does not currently have a land for building purposes valuation. The new owner has 6 months to decide on the purchase, and the eventual decision will say much about their long term plans for the club.

 

So where does the Cryne family 20% fit in with the 1000 shares ?

 

I thought about that after my original piece. There were only 1000 shares at the time of the transfer, and the value is attributed to 1000 shares. I wondered if Mr Cryne bought them for Cryne Junior out of the proceeds. but I do not really have a definitive answer.

 

Whats point guessing and speculating about **** u have no idea about

 

Isn't that what everyone does on here? No-one has any idea how we will line up on a match day, what the result will be, who we will sign or anything else but we still guess and speculate every day.

 

Why would he sell shares and then buy them back? Surely he would just sell 80% of the shares. Makes no sense to sell 100% and then immediately purchase back 20%.

 

All sounds plausible. Repayment of directors loans won't go via the company, but will be written off in return for an offer from the new owner.
Think Super Tyke's question is answered by saying there can be tax advantages on this, as it gives a clear share valuation.

 

My reasoning is based solely on the form, which I am not convinced I totally understand. My reasoning in the first post was that others look at the form directly and see what they make of it. Back to you.

 

Too much time on yer hands then.

 

It's nice to have a hobby. I work, volunteer for a charity, see friends, see family, read, cook, eat, sleep and still find time to talk about all things BFC.