As is shown in the annual accounts for the football club and now confirmed in the consolidated accounts for Chesterfield FC Community Trust, the football club owes the Trust more than £10m. This sum comes from the debt owed to Mr Allen that he donated to the Trust as part of the purchase in 2020.
The Trust has made it clear that it did not intend to call in the loan; effectively it is money owed from a subsidiary company to the parent company. The debt does not reflect the accepted value of the football club and means the Trust accounts have been skewed this year.
As part of the recent investment in the club, it is intended to capitalise this debt by turning it into shares. It has been proposed that the Trust treat the obligation to repay the loan as released and discharged in full in consideration of the issue of five million Ordinary Shares. This effectively means that the number of shares in CFC 2001 Ltd will double and the Trust’s holding will go from 84% to 92% of the company.
While all other shareholders will see their share of the club halve, that club will be worth significantly more without the debt that is to be cancelled. Despite the Trust having an overwhelming majority of shares, the decision to increase the share capital is one for all members. This means a copy of the resolutions to issue the shares, with the appropriate right to cast a vote, is being sent to all shareholders’ addresses.
As the timescale is short, any votes not returned will be deemed to oppose the resolutions. Returns can be done by email, but the closing date is Friday. Using email will also allow the capture of that information for further communications.