FOH named preferred bidder

[Don Dan]

BIDCO?s purpose is to deliver fan ownership and will therefore not seek to make any personal gain on

this agreement with FANCO.

 

 

This is a pleasing statement from my point of view.

[Geoff Kilpatrick]

One question springs to mind - if there is a binding arrangement between the parties, then if the membership of fanco reduces for whatever reason are the remaining members of fanco expected to cover the lapses of fanco?

[Harry Palmer]

http://progress-sc.com/wp-content/uploads/2013/08/Media-Release-Foundation-of-Hearts-19th-August-2013-Web.pdf

 

 

 

OUTLINE DETAIL OF FOUNDATION OF HEARTS PROPOSAL EXPLAINED

 

Key headlines:

? Structure of Foundation of Hearts backed bid announced

? FANCO, controlled by Foundation of Hearts, will enter binding contract with BIDCO to deliver ultimate

fan ownership

? BIDCO funders will not make any personal gain out of the agreement with FANCO

? Partnership will ultimately deliver supporter ownership

 

The Foundation of Hearts is today (19th August) pleased to confirm the outline of its bid for control of Heart of

Midlothian Football Club.This involves two companies entering into a binding partnership with each other, ?BIDCO? and ?FANCO?, both of

which are Special Purpose Vehicles (SPV).

 

1. The bid was submitted by the Foundation of Hearts? bid team under the company title BIDCO

2. BIDCO is backed by Edinburgh business who will provide the vast majority of the capital required for

the to be proposed Creditors Voluntary Agreement (CVA)

3. This binding partnership between BIDCO and FANCO will deliver ultimate fan ownership over a fixed

period of time

4. BIDCO?s purpose is to deliver fan ownership and will therefore not seek to make any personal gain on

this agreement with FANCO

 

 

At this stage a period of comprehensive due diligence and further negotiations begin. It is important to note that

the process is far from complete and is likely to take significant time working to achieve, as identified by BDO. At

that point more detail will be released.

 

Ian Murray MP, chairman, Foundation of Hearts said:

?The bid team working on behalf of the Foundation will set up BIDCO to provide the capital resource to buy the

club, backed by Edinburgh business.

?On agreeing contractual terms with BDO to acquire the club, the BIDCO/FANCO partnership will be created to

deliver fan ownership in a controlled fashion. Doing so allows the club?s finances to be stabilised, and for there

to be an orderly and calm transition to supporter ownership.

?The BIDCO/FANCO partnership delivers multi-layered protection both now and for the future of Hearts. It?s a

win-win situation.

[topcat]

http://progress-sc.c...st-2013-Web.pdf

 

 

Press release.

 

 

Shit just got more real

[Don Dan]

Geoff it's up to us to ensure it doesn't we need to keep calm over the payback period as the following paragraphs says,

 

?On agreeing contractual terms with BDO to acquire the club, the BIDCO/FANCO partnership will be created to deliver fan ownership in a controlled fashion. Doing so allows the club?s finances to be stabilised, and for there to be an orderly and calm transition to supporter ownership.

?The BIDCO/FANCO partnership delivers multi-layered protection both now and for the future of Hearts. It?s a win-win situation.?

One question springs to mind - if there is a binding arrangement between the parties, then if the membership of fanco reduces for whatever reason are the remaining members of fanco expected to cover the lapses of fanco?

Are you up for it?

[topcat]

4. BIDCO?s purpose is to deliver fan ownership and will therefore not seek to make any personal gain on this agreement with FANCO

 

Looks like we've effectively got interest free credit on this

 

Buy now pay over 36 easy instalments

[Geoff Kilpatrick]

Geoff it's up to us to ensure it doesn't we need to keep calm over the payback period as the following paragraphs says,

 

?On agreeing contractual terms with BDO to acquire the club, the BIDCO/FANCO partnership will be created to deliver fan ownership in a controlled fashion. Doing so allows the club?s finances to be stabilised, and for there to be an orderly and calm transition to supporter ownership.

?The BIDCO/FANCO partnership delivers multi-layered protection both now and for the future of Hearts. It?s a win-win situation.?

 

Are you up for it?

I get that but if there is a defined time period for payback and it isn't met/cannot be met, is there scope to increase the period, do fanco members bear liability to bidco or do bidco assume ownership of the outstanding percentage?

 

I'm curious either way especially since the direct debits are non-binding.

[Harry Palmer]

Interview with Murray will be on the website (free) today as well as stuff on TV with him and Birch (BDO).

[Don Dan]

I would imagine all these scenarios have been looked at remember there are no Greens or Whytes involved but Hearts minded people hence the no gain terms.

 

I get that but if there is a defined time period for payback and it isn't met/cannot be met, is there scope to increase the period, do fanco members bear liability to bidco or do bidco assume ownership of the outstanding percentage?

 

I'm curious either way especially since the direct debits are non-binding.

[JamboAl]

One question springs to mind - if there is a binding arrangement between the parties, then if the membership of fanco reduces for whatever reason are the remaining members of fanco expected to cover the lapses of fanco?

While that could be a fair point, I imagine it would be up to the remaining members of Fanco whether they stick or twist. If they too decided to jump ship then I suppose the club would be in the hands of the Bidco members who would have a choice of whether to hold or sell the club.

[pettigrewsstylist]

Whilst im happy for them to do so,,, surely they have no idea if they an get a CVA agreed for exisiting company structure to exit admin ,,or have to go down newco route and buy assets ( if they can raise cash). In that instance, why are they then drawing down direct debits in less than 2 weeks? ( bearing in mind they delayed already from Aug drawdown due to similar reasons?)

 

I would be tempted to think if drawing down 02 Sep ,,,hurrah deal is done, If it wasnt for comment ref extensive due diligence staring now and long process yet!! ( is this an old document only just released to public domain?)

 

Hope so. also if true that nearly 1k more pledgers since last week , superb news

[2NaFish]

 

Interview with Ian Murray

[pettigrewsstylist]

I get that but if there is a defined time period for payback and it isn't met/cannot be met, is there scope to increase the period, do fanco members bear liability to bidco or do bidco assume ownership of the outstanding percentage?

 

I'm curious either way especially since the direct debits are non-binding.

 

In order to save the club Geoff i think we will have to ''accept'' a certain amount of ''loose ends''. Doubt we can get away from it at this time.

[topcat]

6.700 have set up direct debits.

 

At an average of ?16-?20 month that's ?4-?5 million over three years although some of the early payments are going to go into the short term funding gap.

 

Realistically we could have this paid off by the end of 2016

[Allowayjambo1874]

One question springs to mind - if there is a binding arrangement between the parties, then if the membership of fanco reduces for whatever reason are the remaining members of fanco expected to cover the lapses of fanco?

 

It's a fair enough question Geoff and I have no answer to it but to be frank if this does happen and the membership of fanco reduces to the point that 'we' cannot pay Bidco then we don't deserve to have a club anymore. This is a once in a lifetime opportunity for the fans to own the club, if we cannot make it happen then every hearts fan should hang their head in shame. Given the level of financial support the fans have given in the last 6 months I am confident that this won't happen and in fact think that there may be an increase in pledges now that it's all being laid out in black and white.

[Socrates]

Whilst im happy for them to do so,,, surely they have no idea if they an get a CVA agreed for exisiting company structure to exit admin ,,or have to go down newco route and buy assets ( if they can raise cash). In that instance, why are they then drawing down direct debits in less than 2 weeks? ( bearing in mind they delayed already from Aug drawdown due to similar reasons?)

 

I would be tempted to think if drawing down 02 Sep ,,,hurrah deal is done, If it wasnt for comment ref extensive due diligence staring now and long process yet!! ( is this an old document only just released to public domain?)

 

Hope so. also if true that nearly 1k more pledgers since last week , superb news

 

Because they always said that they would not take money until they were in a position to buy the club. They now feel that, as the preferred bidder, they are relatively likely to be able to complete a deal, so they're starting to draw down the money.

 

Also, not sure why you think FoH wouldn't know whether a CVA is likely or not. They'll know how much the administrators in Lithuania are asking for, and how much they can pay and so on, so they should know whether a CVA can be achieved. It's not like nobody talks to each other about things like this.

[Geoff Kilpatrick]

 

 

It's a fair enough question Geoff and I have no answer to it but to be frank if this does happen and the membership of fanco reduces to the point that 'we' cannot pay Bidco then we don't deserve to have a club anymore. This is a once in a lifetime opportunity for the fans to own the club, if we cannot make it happen then every hearts fan should hang their head in shame. Given the level of financial support the fans have given in the last 6 months I am confident that this won't happen and in fact think that there may be an increase in pledges now that it's all being laid out in black and white.

I'm confident it won't happen either, don't get me wrong. My curiosity arises from how involved bidco members want to be in the Foundation itself. As topcat says, it is an interest free loan with no apparent commitments, which is phenomenally generous.

[jambostevo]

IMO bidco would have an agreement to take a % of monthly pledges as repayments, continuing till all money is repayed with no time limit specified.?

[2NaFish]

IMO bidco would have an agreement to take a % of monthly pledges as repayments, continuing till all money is repayed with no time limit specified.?

 

That's one way of doing it. I guess we'll only know once the club has been bought.

[pettigrewsstylist]

good interview , i thought it was clear and understandable

[Guest Bilel Mohsni]

It would be such a waste for the fans - fanco to pay back half of the amount, and then not get the club because the number of pledges dropped. Surely that alone would stop many people cancelling?

 

Obviously there are the things like job losses which will mean unavoidable cancellations, but hopefully that can be balanced off against New pledges who's financial position has improved.

[Rudy T]

 

IMO bidco would have an agreement to take a % of monthly pledges as repayments, continuing till all money is repayed with no time limit specified.?

 

They may also get a % of any transfer fees?

[The Gasman]

It makes me more than a little bit nervous that Ian Murray states that the Foundation will not pay a penny more than their current bid, a bid that has already been rejected by Ukio's administrator.

[topcat]

It's a fair enough question Geoff and I have no answer to it but to be frank if this does happen and the membership of fanco reduces to the point that 'we' cannot pay Bidco then we don't deserve to have a club anymore. This is a once in a lifetime opportunity for the fans to own the club, if we cannot make it happen then every hearts fan should hang their head in shame. Given the level of financial support the fans have given in the last 6 months I am confident that this won't happen and in fact think that there may be an increase in pledges now that it's all being laid out in black and white.

 

It's also worth remembering that while the risk of Direct Debits drying up partially is significant it's massively unlikely that it's going to dry up completely.

 

The real risk being run by Bidco is late payment as opposed to non-payment and that's going to be far less scary for the likes of Budge or whoever is sticking up money.

[Allowayjambo1874]

I'm confident it won't happen either, don't get me wrong. My curiosity arises from how involved bidco members want to be in the Foundation itself. As topcat says, it is an interest free loan with no apparent commitments, which is phenomenally generous.

 

Can only think they'll want on the board until ownership transferred. I am not sure they want the hassle and stress of owning the club full stop for years and would like it transferred soon as possible. Sounds in interview that these are people with money who are 100% fans and will want the club secure for the future. I may be in the minority but one of the things I would do would be to get George Foulkes back in the board room given his past experience and knowledge on how the football club could/should be run. Given that Ian Murray is a sitting MP I am not sure how much time he can devote to Hearts.

[jambostevo]

It makes me more than a little bit nervous that Ian Murray states that the Foundation will not pay a penny more than their current bid, a bid that has already been rejected by Ukio's administrator.

i think what he said was they would not pay a penny more than is appropriate for the club, that's how I head it anyway

[Socrates]

This would also seem to explain why FoH didn't need funding from the McKie grouping. If they have interest-free financing from other sources, it would be an entirely rational decision to knock back McKie.

[Geoff Kilpatrick]

It makes me more than a little bit nervous that Ian Murray states that the Foundation will not pay a penny more than their current bid, a bid that has already been rejected by Ukio's administrator.

If Ukio want to play hardball in public, why shouldn't FoH do the same?

[pettigrewsstylist]

Because they always said that they would not take money until they were in a position to buy the club. They now feel that, as the preferred bidder, they are relatively likely to be able to complete a deal, so they're starting to draw down the money.

 

Also, not sure why you think FoH wouldn't know whether a CVA is likely or not. They'll know how much the administrators in Lithuania are asking for, and how much they can pay and so on, so they should know whether a CVA can be achieved. It's not like nobody talks to each other about things like this.

 

You try hard to make your speculation sound authoratative socrates ,,but my point , i think remains, if FOH were not confident enough to drawdown DD's at original August date and cancelled, what has changed in order to embolden them to do so now?

 

Because one has not been presented to creditors to vote on.

 

Its reassuring to know people are talking about these things though

[Socrates]

It makes me more than a little bit nervous that Ian Murray states that the Foundation will not pay a penny more than their current bid, a bid that has already been rejected by Ukio's administrator.

 

Well, he would say that, wouldn't he, in the same way that the UKIO administrator is always going to say that it will take more money. I wouldn't necessarily take it at face value.

 

Is there a transcript of the interview anywhere - I can't watch it at work and I'm interested in exactly what was said.

[Allowayjambo1874]

They may also get a % of any transfer fees?

 

No I think that they will be in the 'normal running of the club', it sounded like it's basically an interest free loan which will need paying up a regular basis, the only question is whether payments will be made monthly, yearly or somewhere in between.

 

What will be interesting is who will be on the board making the decisions on things like transfer fees and contracts.

 

The best thing is that whoever it is, they will be first and foremost fans and given where we got to I cannot see anyone agreeing to crazy deals (in or out!)

[Francis Albert]

Wow. Statement for me raises a lot more questions than it answers. But since we are not allowed to ask them can I just ask if can anyone knows what "multi-layered protection" means.

[pettigrewsstylist]

I'm confident it won't happen either, don't get me wrong. My curiosity arises from how involved bidco members want to be in the Foundation itself. As topcat says, it is an interest free loan with no apparent commitments, which is phenomenally generous.

 

Im genuinley amazed also Geoff, but without knowing the ''binding'' details then we shall have to guess for know. If that is the case it is tremendous and the best news possible.

 

The fact remains regarding BIDCO capital tho that we are geussing X amount of pledges = X amount of capital ( not that i except bid to be compromised to satisfy my curiosity at this stage).Nevertheless if true then all pledges count, including those yet to be made.

[redm]

Forgot my ear thingies today, what's the gist of the interview other than the hardball not-a-penny-more comment? Yikes.

 

How does hardball work in these situations? If we submit a final offer, does it really have to be final or if we discover that the Lithuanian contingent are serious about the extra 1m will we then get an opportunity to revise it? As in, does our final offer really have to be final?

[The Gasman]

I'm confident it won't happen either, don't get me wrong. My curiosity arises from how involved bidco members want to be in the Foundation itself. As topcat says, it is an interest free loan with no apparent commitments, which is phenomenally generous.

 

Not for profit does not mean interest free - though I fully agree that it is very generous, and one in the eye for those who've been whining about Edinburgh business people not doing anything for Hearts.

[pettigrewsstylist]

It would be such a waste for the fans - fanco to pay back half of the amount, and then not get the club because the number of pledges dropped. Surely that alone would stop many people cancelling?

 

Obviously there are the things like job losses which will mean unavoidable cancellations, but hopefully that can be balanced off against New pledges who's financial position has improved.

 

SWR.... i for one truly believe one/if FOH get Hearts the pledges will pick up momentum over next 12 mths . Once the name is above the door and all that people will want a slice

[redm]

Not for profit does not mean interest free - though I fully agree that it is very generous, and one in the eye for those who've been whining about Edinburgh business people not doing anything for Hearts.

 

Assuming there's actually members and not just one member.

Which may well be the case.

[pettigrewsstylist]

It makes me more than a little bit nervous that Ian Murray states that the Foundation will not pay a penny more than their current bid, a bid that has already been rejected by Ukio's administrator.

 

Is that what he said GM? I thought he said a penny more that we can afford and our current bid is realistic and reasonable etc...play on words ill grant you but different none the less.

 

If he said that tbh,, we are f****

[2NaFish]

Not for profit does not mean interest free

 

Not had my cup of tea yet gasman, can you expand on that. Obviously not the specifics as - clearly - none of us know them, but what it could mean.

[pettigrewsstylist]

Wow. Statement for me raises a lot more questions than it answers. But since we are not allowed to ask them can I just ask if can anyone knows what "multi-layered protection" means.

[Socrates]

Not had my cup of tea yet gasman, can you expand on that. Obviously not the specifics as - clearly - none of us know them, but what it could mean.

 

I'd guess that you could have interest of the rate of inflation or less without it being profit-making.

[hughesie27]

Over 6700 converted direct debits set up.

Lockes email gained another 500.

 

Good news at an average of around ?19 that is just shy of ?1.8 million a year I think.

[Socrates]

Is that what he said GM? I thought he said a penny more that we can afford and our current bid is realistic and reasonable etc...play on words ill grant you but different none the less.

 

If that's what he said, then that's not really worrying at all. That's pretty much exactly what I'd expect him to say.

[The Gasman]

i think what he said was they would not pay a penny more than is appropriate for the club, that's how I head it anyway

 

5:15 in, Ian says that there is an existing bid on the table, then mentions that the foundation "will not pay a penny more".

 

I fully appreciate that there are negotiations ongoing, but it makes me nervous for a public statement to be made that is as categorical as that, when that bid has already been said to be unacceptable by Ukio's administrator.

[Don Dan]

They may have put in another bid that not in the public domain

It makes me more than a little bit nervous that Ian Murray states that the Foundation will not pay a penny more than their current bid, a bid that has already been rejected by Ukio's administrator.

[pettigrewsstylist]

If that's what he said, then that's not really worrying at all. That's pretty much exactly what I'd expect him to say.

 

indeed

[hughesie27]

5:15 in, Ian says that there is an existing bid on the table, then mentions that the foundation "will not pay a penny more".

 

I fully appreciate that there are negotiations ongoing, but it makes me nervous for a public statement to be made that is as categorical as that, when that bid has already been said to be unacceptable by Ukio's administrator.

That isn't how I heard it. He says that their priority is the ensure that the bid is for the whole clubs and assets and that it is a realistic figure and not a penny more. He didn't however say that the current bid is their final price.

[pettigrewsstylist]

5:15 in, Ian says that there is an existing bid on the table, then mentions that the foundation "will not pay a penny more".

 

I fully appreciate that there are negotiations ongoing, but it makes me nervous for a public statement to be made that is as categorical as that, when that bid has already been said to be unacceptable by Ukio's administrator.

5:15 in, Ian says that there is an existing bid on the table, then mentions that the foundation "will not pay a penny more".

 

I fully appreciate that there are negotiations ongoing, but it makes me nervous for a public statement to be made that is as categorical as that, when that bid has already been said to be unacceptable by Ukio's administrator.

 

oh GM,, come on now,, youre better than that,,,gie it up mate

[Special Agent Dale Cooper]

I would presume there would have to be a low level interest levied to cover inflation etc, no? I am no economist but I presume the backers wouldn't want to actively lose money.

[The Gasman]

If Ukio want to play hardball in public, why shouldn't FoH do the same?

 

I don't think carrying out these processes in public is professional, or helpful, and can often just end up with positions becoming more polarised, and opinions becoming more crystalised. Just because one side does it, does not mean the other has to follow suit (two wrongs do not make a right, as the old saying goes) and as it is the very future of Hearts that are being gambled for here, I'd far rather both parties act as professionally as possible, leave the negotiations to the board room where they belong, and stop publicly making unhelpful and unequivocal statements such as that.