FOH named preferred bidder

[ToYouToMe]

 

 

No problem with that but supporter ownership should be what it says on the tin. This is a business not a Charity.

 

It might not be a charity in law, but in terms of the affections and commitment of those giving it sort of is.

 

Sent from my GT-I9300 using Tapatalk 4

 

 

[Boab Mugabe]

If we get the club free of debt for the price of three years direct debits, I'd be delighted. Did anyone think that was possible over a year ago?

 

Would be brilliant. Long way to go yet, but highly encouraging all the same.

[Big Slim Stylee]

 

 

So after being told for nine months there were no white knights, the club is to be bought by a still anonymous group of ... white knights. Amazing what leeway being "guid Hearts men" gives you.

 

I'm not usually given to random acts of violence but punching the screen every time I come across yet another one of your moaning Eeyore posts is proving rather satisfying.

[Zachearts]

 

 

 

 

Dont think he means you GF .

There is one particular poster who seems to be going out of his way to find negatives from positives.

He is one depressing so and so now where is that ignore function.

This in spades mate, certainly wasn't aimed at GF more aimed at FA.....becoming a pain in the arse.

[Gav M]

I would imagine pledges going forward could be used for 1 off payments like transfer fees, as long as the players wage is covered in a self-sustaining manner. That way any reduction in pledges doesn't effect the wages being paid but if we have enough in the ktty then the transfer fee can be paid without inhibiting the wage scale.

[JyTees]

 

 

As I understand it, and I may be wrong (of course!), but the FoH membership wouldn't be ratifying every Board decision.

 

Our ratification would essentially be when we elect the Board members i.e. their election by the membership gives them the authority to make the decision. If we don't like what they are doing, we elect someone else at the next elections.

 

But, as I say, I may be wrong.

 

This is certainly the way it works in other examples and I think the only way it would be sustainable. Can you imagine trying to get 7000 pledgers in agreement on what type of bog roll should be used in the away dressing room?

 

[frankbroxup]

 

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

 

 

Press release.

 

As I have been saying for weeks all that FOH or Now BIDCO need to confirm is that all the pledge money received will be recorded and eventually converted to shares. Iain Murray intimated this without saying it. If BIDCO confirm and/ or clarify this I think the Pledge Numbers would increase dramatically.

[Boris]

This is certainly the way it works in other examples and I think the only way it would be sustainable. Can you imagine trying to get 7000 pledgers in agreement on what type of bog roll should be used in the away dressing room?

 

The tracing paper stuff that we had at secondary school.

 

Next.....

[troonmaroon]

 

 

 

As I have been saying for weeks all that FOH or Now BIDCO need to confirm is that all the pledge money received will be recorded and eventually converted to shares. Iain Murray intimated this without saying it. If BIDCO confirm and/ or clarify this I think the Pledge Numbers would increase dramatically.

 

Shares in the name of us individual pledgers?? That's not the plan at all, as far as I understand it. The shares will be held by 'fanco' or whatever it's called. No?

 

Pledge gives you a vote but not a share.

[Gene Parmesan]

As I have been saying for weeks all that FOH or Now BIDCO need to confirm is that all the pledge money received will be recorded and eventually converted to shares. Iain Murray intimated this without saying it. If BIDCO confirm and/ or clarify this I think the Pledge Numbers would increase dramatically.

 

No, it's not shares it's a membership. All members are equal owners of FoH (fanco) and therefore equal owners of HMFC (once purchased back from bidco).

[frankbroxup]

 

 

 

Shares in the name of us individual pledgers?? That's not the plan at all, as far as I understand it. The shares will be held by 'fanco' or whatever it's called. No?

 

Pledge gives you a vote but not a share.

 

All shareholders have a vote. For every ?1 invested there should be a share issued. This would give the pledgers something tangible.

The implementation of this would give prospective pledgers more comfort and dramatically increase the uptake.The club should be owned by the 100,000 + that turned out 20/05/2013 whether they own 10 shares or 10,000. Frame the share Certificate and put it on the sideboard.

[JyTees]

 

 

Shares in the name of us individual pledgers?? That's not the plan at all, as far as I understand it. The shares will be held by 'fanco' or whatever it's called. No?

 

Pledge gives you a vote but not a share.

 

If that was the case, what will happen when Sheikh Mansour realises the potential and ploughs his billion pound fortune into buying a resurgent and rampant Heart of Midlothian? Who would buy the shares from and who would receive the money? Somebody has to own the shares surely!

 

[TheMaganator]

Very encouraged by this - but trying not to get too excited just yet.

[frankbroxup]

 

 

 

No, it's not shares it's a membership. All members are equal owners of FoH (fanco) and therefore equal owners of HMFC (once purchased back from bidco).

 

Not my interpretation. BIDCO are referring to Ownership not Membership.

[Boris]

If that was the case, what will happen when Sheikh Mansour realises the potential and ploughs his billion pound fortune into buying a resurgent and rampant Heart of Midlothian? Who would buy the shares from and who would receive the money? Somebody has to own the shares surely!

 

The Foundation will own the shares.

 

Pledging gives you the right to vote for 51% of the board membership.

 

(again, I could be wrong!)

[frankbroxup]

 

 

 

If that was the case, what will happen when Sheikh Mansour realises the potential and ploughs his billion pound fortune into buying a resurgent and rampant Heart of Midlothian? Who would buy the shares from and who would receive the money? Somebody has to own the shares surely!

 

Exactly that

[Boris]

Exactly that

 

The Foundation of Hearts would own the shares, no?

[frankbroxup]

 

 

 

The Foundation will own the shares.

 

Pledging gives you the right to vote for 51% of the board membership.

 

(again, I could be wrong!)

 

As far as I understand BIDCO will own the shares and sell them back to the supporters.

This is fine but it means that the BIDCO investors will get all of their money back.

The supporters will have to buy the shares but what happens to the pledge money do they give this back similarly ?

I know the levels of investment are hugely different but the principle is the same.

This is why every ?1 invested should attract a ?1 share whether you are a well off businessman or a Guy who scrapes to buy his season ticket.

[pettigrewsstylist]

So after being told for nine months there were no white knights, the club is to be bought by a still anonymous group of ... white knights. Amazing what leeway being "guid Hearts men" gives you.

 

theyve been persuaded to ''lend '' money it seems

[2NaFish]

As far as I understand BIDCO will own the shares and sell them back to the supporters.

This is fine but it means that the BIDCO investors will get all of their money back.

The supporters will have to buy the shares but what happens to the pledge money do they give this back similarly ?

I know the levels of investment are hugely different but the principle is the same.

This is why every ?1 invested should attract a ?1 share whether you are a well off businessman or a Guy who scrapes to buy his season ticket.

 

There's a huge disincentive to the man in the street to put his tenner in, knowing that it buys him zero say in the club. Moreover, large scale investors will be put off as they'll not want to invest in a holding company. Nevermind the fact that that they'd be too wise to put big money in us anyway. It's lose-lose.

 

You keep banging this drum, but it's not the way that things are set up and there appears to be no great interest in it. But how about you put this forward and it can be voted on by the members, rather than just narking.

[Gene Parmesan]

Not my interpretation. BIDCO are referring to Ownership not Membership.

 

I don't follow. Bidco buys the club, Fanco buys it back off them. We (fans) all are members/owners of Fanco.

 

Fanco/FoH is a private company limited by guarantee. It has no share capital or shareholders, it is owned by members who each have one *nominal* share in the company.

[pettigrewsstylist]

Gie what up..?

 

I don't think that either side making such unequivocal statements in public, as they've both now done, is either helpful, or professional.

 

I want this to work, and that means I want both sides to be as professional as possible, and do the haggling and negotiation in the boardroom - where it belongs.

 

Not an unreasonable position, I'd have thought.

 

mate he does not say what you said he said in your original post,, you missed several sentences out in between quotes ..yet you continued to push that line

 

not the standard of opinion and post ive come to expect and respect from you

 

thats all

[Guest Bilel Mohsni]

 

 

 

As far as I understand BIDCO will own the shares and sell them back to the supporters.

This is fine but it means that the BIDCO investors will get all of their money back.

The supporters will have to buy the shares but what happens to the pledge money do they give this back similarly ?

I know the levels of investment are hugely different but the principle is the same.

This is why every ?1 invested should attract a ?1 share whether you are a well off businessman or a Guy who scrapes to buy his season ticket.

 

Are you Andy Driver's dad?

[pettigrewsstylist]

Everything that i hear from the foh has been positive, why are the same people still trying to look for negatives ??

 

Because they didnt get involved and someone else is getting all the plaudits,

 

 

Anyway all these if and buts aside its another step forward that's whats pleasing the most of all today

 

nail,,, head,,,strike

[pettigrewsstylist]

If we get the club free of debt for the price of three years direct debits, I'd be delighted. Did anyone think that was possible over a year ago?

 

after 40 yrs of following the boys,,and all that time debt has been enemy number 1,,,,,,,,,,,, to think its poss in my lifetime is well........................really hard to beleive

[Guest Bilel Mohsni]

 

 

after 40 yrs of following the boys,,and all that time debt has been enemy number 1,,,,,,,,,,,, to think its poss in my lifetime is well........................really hard to beleive

 

Not done quite that length of service, but in my 20 odd years, I feel similar.

 

Id bite any *****'s hand off for that outcome, FFS!

 

[pettigrewsstylist]

To be fair a sceptical questioning voice acting as devil's advocate has been a useful, if irritating and repetitive, presence, as we collectively attempt to figure out what is going on and what is likely to happen.

 

 

 

But we've already got Geoff for that

so yeah you're right.

 

 

oooofttttt,,,,,,,,,,,, standing count required methinks

[topcat]

It might not be a charity in law, but in terms of the affections and commitment of those giving it sort of is.

 

In terms of law it's a "Community Interest Company".

 

Defined by https://www.gov.uk/set-up-a-social-enterprise as "A CIC is a special type of limited company which exists to benefit the community rather than private shareholders."

 

You could say it's half way between a charity and a normal company. It doesn't really fit into either category

 

Given that most football clubs are "not for profit" in practice more of them should be on paper.

[luckydug]

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.

 

 

 

I think people were complaining about big businesses based in Edinburgh who take plenty out of the city and put nothing back except perhaps to sponsor big rugby matches. This is a group of business people who are Hearts fans prepared to lend money to fund a CVA and working capital. Entirely different situation IMO.

[The Gasman]

 

 

 

I think people were complaining about big businesses based in Edinburgh who take plenty out of the city and put nothing back except perhaps to sponsor big rugby matches. This is a group of business people who are Hearts fans prepared to lend money to fund a CVA and working capital. Entirely different situation IMO.

 

To be fair, I think it was a bit of both.

[Watt-Zeefuik]

Dratted 5 hour time difference...

 

Gasman -- I didn't hear Murray's statement as "not a penny more" than a fixed figure. I heard it as "not a penny more" than three requirements: what FoH can afford, what's reasonable for the club, and what sets up the club for a sustainable future. Those are perfectly reasonable requirements IMO, and is exactly the hard line to take. It provides a bit of give in the numbers but sends a clear message to Ukio that FoH are not overly emotional, cash-soaked individuals who will pay whatever it takes to get the club.

 

Geoff -- I have no inside information but I would bet money that the provided for transfer from BIDCO to FANCO is effectively a slow and orderly transfer of shares and control from one organization to the other. BIDCO will of course know that the pledges are not binding, so will have a contingency plan. I would also bet money that in the result of a collapse of FANCO, BIDCO are left holding shares in the club. For them, financially, that effectively means they have security via the value of Tynecastle should the worst happen. To be clear I have every confidence that the scheme will work and that in 3-5 years we'll have 20k members of FoH.

 

Disposition of pledge funds -- My understanding from everything FoH have said is that the pledge dollars will be locked in to transferring control from BIDCO to FANCO, and after that it's up to us to elect board members to decide how those are dispersed. As I've said elsewhere, my personal preference would be that almost all of it be split between the youth development academy and a property fund, with probably twice as much going to property as to the youth fund. (There would of course need to be probably 10% to cover overhead for things like office staff, newsletters, membership swag, membership promotion, etc.) However, in the end, it would be up to us to decide.

[Rudy T]

Is this the deal then - BIDCO have a pot of cash which could be anything - from ?5m - ?10m, if we get the CVA for circa ?5m and a working capital of ?2m is required then ?7m is required to be paid back - presumably this can be fed back as the club realise income - Pledges, sponsorship, transfer fees - the new board will determine what is required to function as a competitive team and what is left over is paid to BIDCO - as FANCO pay the money back BIDCO will release the equivalent value of shares?

 

Now this is where I'm stuck - who then owns the club who are FANCO ??

[Boris]

 

 

Now this is where I'm stuck - who then owns the club who are FANCO ??

 

The Foundation of Hearts.

[Rudy T]

 

 

 

The Foundation of Hearts.

 

Ok, I'll leave it there or I'll start getting on "Francis Albert" and I guess its uncalled for at the moment.

[Watt-Zeefuik]

Is this the deal then - BIDCO have a pot of cash which could be anything - from ?5m - ?10m, if we get the CVA for circa ?5m and a working capital of ?2m is required then ?7m is required to be paid back - presumably this can be fed back as the club realise income - Pledges, sponsorship, transfer fees - the new board will determine what is required to function as a competitive team and what is left over is paid to BIDCO - as FANCO pay the money back BIDCO will release the equivalent value of shares?

 

Now this is where I'm stuck - who then owns the club who are FANCO ??

 

First, I'd be surprised if the CVA is ?5m. I think ?4-4.5m is a lot more likely.

 

Second, FANCO is member-controlled organization funded by pledges. It's not "owned" by anyone or anything -- it's an organization of fans with a membership fee and a democratic structure, like many non-profits or advocacy groups.

[Boris]

Ok, I'll leave it there or I'll start getting on "Francis Albert" and I guess its uncalled for at the moment.

 

As I understand it from Ian Murray's comments, that would mean that it would be the pledgers who would own Hearts, as if you pledge you are automatically part of the Foundation of Hearts.

 

Whether pledging would remain after the Bidco has been payed backed remains to be seen, or rather decided by the membership of the Foundation.

 

The interview on the recent Edinburgh Business thread showing the STV interview explains it all quite well, imo.

[sniffer]

Would pledges made after the capital repayment is made to bidco not be used by the board as they see fit? Thats what the board are there for.

 

Cant see why it couldnt go towards player purchase, salaries, youth development etc.

 

As for pledges dropping the club will still be on a more sustainable level of finance, pledges will always be extra.

I think (according to the Governance docs on the FOH website) the money is to be used for reasons that the members of the Foundation see fit, not the club board, which is separate. In other words, it's us the fans that will decide how the money is to be used. You are right though in a sense, the FOH could simply gift the money to the club and allow the Hearts board to determine how it might be used.

[sniffer]

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.

I agree. Not for profit probably means that the backers are looking for some sort of return on their investment, based on index linked interest rates. There is no profit to be made in that but there is no real loss either. It's what I would do if I had a spare ?2 or 3M to lend Hearts.

[Hartley Jambo.]

Is this the deal then - BIDCO have a pot of cash which could be anything - from ?5m - ?10m, if we get the CVA for circa ?5m and a working capital of ?2m is required then ?7m is required to be paid back - presumably this can be fed back as the club realise income - Pledges, sponsorship, transfer fees - the new board will determine what is required to function as a competitive team and what is left over is paid to BIDCO - as FANCO pay the money back BIDCO will release the equivalent value of shares?

 

Now this is where I'm stuck - who then owns the club who are FANCO ??

As much as like that repayment scenario, I can't see it happening.

 

My take for what it's worth.

There will be an agreed repayment schedule from Fanco (the pledges) to Bidco.

During the repayment period the club will be self sustaining with income from season tickets, sponsorship, tv, walk up sales etc. This starts season 2014/15

The board of the club will operate to a mandate from FoH, presumably via some AGM.

What happens to pledges after the payments are finished hasn't been stated.

What is the status of the stadium ownership during the repayment hasn't been stated.

I'd assume Bidco would reasonably want some form of security for the loan, I dont see this is an issue as long as repayments are maintained. No reason to doubt that.

 

It's vital the club is self sufficient all year round. By that we probably won't have an overdraft agreement or anything else to use as a guarantee for a commercial loan even for a short period of time.

We need to get back to a situation where season ticket money is used for summer player movement and funding for the next season.

This means FoH need to invest to keep the club running until next Aug for me.

[Craigieboy]

All sounds very, very promising.

 

Fingers crossed a CVA can be agreed within a relatively short period of time.

 

All hinges with the Liths.

[Paolo]

 

 

As I understand it, and I may be wrong (of course!), but the FoH membership wouldn't be ratifying every Board decision.

 

Our ratification would essentially be when we elect the Board members i.e. their election by the membership gives them the authority to make the decision. If we don't like what they are doing, we elect someone else at the next elections.

 

But, as I say, I may be wrong.

 

I think you are right Boris. The FoH Board and the Hearts Board will be different, with the latter being paid professionals, elected to their positions by shareholders at an AGM. If FoH have the majority of the shares, it is likely that the way they vote will decide any outcome, rather like previously with UBIG/UKIO. As members of FoH, I suspect we will vote on how they should vote, with the majority decison being followed by FoH. It will be the elected Hearts Board that will make the decisions, and if we do not like them, we will get the opportunity to vote out the Board at the next AGM, or possibly an EGM, via our FoH membership, or directly at the AGM/EGM, if like me, you own shares in your own right.

 

I also could be wrong, but pledging to FoH does not, and will not, make you a shareholder, at least not directly. I have still happily pledged though and hope more do so.

[Francis Albert]

 

 

 

And you have a problem with this why?!

I have no problem with it at all. I am slightly amazed that a simple statement of fact has brought forth accusations of negativity. I very much welcome the White Knights from the Edinburgh business community. The fact that they are not in it for themselves but are offering their cash to facilitate the Foundation's aims make them a particularly shining example of White Knights, as others expressions of gratitude for their generosity testify.

[Geoff Kilpatrick]

 

I have no problem with it at all. I am slightly amazed that a simple statement of fact has brought forth accusations of negativity. I very much welcome the White Knights from the Edinburgh business community. The fact that they are not in it for themselves but are offering their cash to facilitate the Foundation's aims make them a particularly shining example of White Knights, as others exp<b></b>ressions of gratitude for their generosity testify.

So why the dig at "guid Hearts men" and what did you mean by "leeway"?

[Francis Albert]

 

 

So why the dig at "guid Hearts men" and what did you mean by "leeway"?

Again, it was simply a statement that (quite understandably and rightly) they get away with things that other bidders wouldn't, at least not without questioning. On one trivial level it is being free to speak meaningless stuff like "provide multi-layered protection" without anyone questioning what on earth it means. There is also a level of secrecy and obscurantism which I find a bit inconsistent with the principle of fan funding and control. Until today my understanding of the model was that the Foundation would buy the club with funds provided by those "capitalising" the pledges, and would (subject to the obligation to repay and probably with security being provided in the form of a charge over the assets)gain immediate control over running of the club. Today's statement says that a separate entity Bidco will initially acquire the club and sell it over time to the Foundation (Murray in his interview clearly says Fanco is in essence the Foundation). The timescales, and how the club is run during what it seems could be a significant transition period are unclear. I repeat I have no problem with any of it, am very happy and not in the least bitter, but I stand by what I said as a simple statement of fact. Why others get so worked up by simple facts I have no idea.

[Beats]

Francis Albert

 

 

 

 

[Paolo]

 

Again, it was simply a statement that (quite understandably and rightly) they get away with things that other bidders wouldn't, at least not without questioning. On one trivial level it is being free to speak meaningless stuff like "provide multi-layered protection" without anyone questioning what on earth it means. There is also a level of secrecy and obscurantism which I find a bit inconsistent with the principle of fan funding and control. Until today my understanding of the model was that the Foundation would buy the club with funds provided by those "capitalising" the pledges, and would (subject to the obligation to repay and probably with security being provided in the form of a charge over the assets)gain immediate control over running of the club. Today's statement says that a separate entity Bidco will initially acquire the club and sell it over time to the Foundation (Murray in his interview clearly says Fanco is in essence the Foundation). The timescales, and how the club is run during what it seems could be a significant transition period are unclear. I repeat I have no problem with any of it, am very happy and not in the least bitter, but I stand by what I said as a simple statement of fact. Why others get so worked up by simple facts I have no idea.

 

It is a fair point to raise and question to ask, and the answers could alter my understanding I mentioned a few posts up from this one. I would therefore be interested in the answer.

 

The answer would not put me of pledging at all, but it could potentially change the concept, at least in the early stages, whether that is months or years. If it is years, I have no issue with this, especially if the outcome is Hearts are saved, which is the objective of us all. It would be nice to know though.

 

I do say, though, 'Carry on pledging'.

 

And thanks to BidCo, whoever you are.

[Francis Albert]

 

 

 

It is a fair point to raise and question to ask, and the answers could alter my understanding I mentioned a few posts up from this one. I would therefore be interested in the answer.

 

The answer would not put me of pledging at all, but it could potentially change the concept, at least in the early stages, whether that is months or years. If it is years, I have no issue with this, especially if the outcome is Hearts are saved, which is the objective of us all. It would be nice to know though.

 

I do say, though, 'Carry on pledging'.

 

And thanks to BidCo, whoever you are.

 

Agreed. And I am not in any hurry to know the answer.

[Rods]

 

 

Again, it was simply a statement that (quite understandably and rightly) they get away with things that other bidders wouldn't, at least not without questioning. On one trivial level it is being free to speak meaningless stuff like "provide multi-layered protection" without anyone questioning what on earth it means. There is also a level of secrecy and obscurantism which I find a bit inconsistent with the principle of fan funding and control. Until today my understanding of the model was that the Foundation would buy the club with funds provided by those "capitalising" the pledges, and would (subject to the obligation to repay and probably with security being provided in the form of a charge over the assets)gain immediate control over running of the club. Today's statement says that a separate entity Bidco will initially acquire the club and sell it over time to the Foundation (Murray in his interview clearly says Fanco is in essence the Foundation). The timescales, and how the club is run during what it seems could be a significant transition period are unclear. I repeat I have no problem with any of it, am very happy and not in the least bitter, but I stand by what I said as a simple statement of fact. Why others get so worked up by simple facts I have no idea.

Call me old fashioned but I would be happy to deal with semantics of the situation out of our current predicament

[frankbroxup]

 

 

 

There's a huge disincentive to the man in the street to put his tenner in, knowing that it buys him zero say in the club. Moreover, large scale investors will be put off as they'll not want to invest in a holding company. Nevermind the fact that that they'd be too wise to put big money in us anyway. It's lose-lose.

 

You keep banging this drum, but it's not the way that things are set up and there appears to be no great interest in it. But how about you put this forward and it can be voted on by the members, rather than just narking.

 

There is more incentive for everyone whether you are a ?50 or ?500,000 investor if there is something tangible exchanged ( in my opinion a ?1 share. Don't you worry the largest investors will absolutely require this. Why should the man on the terrace be any different.

There is no narking and I my comments maybe fuelled by the fact that I have a real and substantial investment proposal.

I agree with you it could be done retrospectively and reading between the lines this was possibly what ian Murray was referring to in his interview. If He came out and said it I am sure the number of pledgers would double.

 

 

 

[CJGJ]

Months ago (if people had bothered to read the posts) JKB was told what was happening.

 

It was clear there were people with funding who would purchase the club and then would be 'paid back' by the fans as they wanted overall control diluted into fan ownership.

 

All that has happened today is a description of how that will happen IF it comes to pass.

 

Despite all the work there seems to still be some who leave the impression that they will not be happy unles its all done in the exact manner they would like and who seem to want 100% answers to some questions that are dependant upon factors outwith the control of Bidco.

For example the purchase timescale will depend upon the number of pledgers, the purchase price and whether those pledging do so until purchase is completed some 3-5 years from now if we are lucky to have a CVA agreed. (never mind the costs involved if we are relegated)