Hearts AGM

[Footballfirst]

Looking back through the various agreements and accounts of FOH and BIDCO, I've found contradictory statements of how the Bidco loan will be repaid.

 

From the recent FOH Accounts:

From June 2016, the Foundation will start to make payments to Bidco (1874) Ltd to acquire a corresponding stake in the senior loan advanced to Heart of Midlothian plc. The Foundation will pay ?800,000 each year for a three year period. By 9 May 2019, the Foundation will own the whole of the senior loan. Heart of Midlothian plc will owe ?3.8m under the subordinated loan and ?2.4m under the senior loan directly to the Foundation.

 

From the BIDCO / FOH Funding agreement

11.2 Subject to clause 12, beginning on 1 June 2016, the Foundation shall ensure that it utilises 95 per cent of Fan Contributions collected by it each month during each subsequent year of the Term to acquire Participations in the Senior Loan at a minimum of ?200,000 per quarter until such time as the Bidco Proportion of the Senior Loan is zero.

 

So it looks like FOH believes it will repay the loan element at ?800,000 per annum over three years. However, Bidco seems to expect that 95% of the pledges will be used to repay the loan, with a minimum of ?200,000 a quarter.

 

The difference is timescales between the two expectations could be as much as a year, with a corresponding reduction in how much the fans will ultimately contribute before fan ownership is achieved..  I sense that another emailed question may be required.

[Drewboy]

I am not ignoring running costs. Just clarifying the contribution to them FoH is obliged to make as a pre-condition in the agreement which provides for FoH then to pay a further ?2.5m plus interest to buy shares. I really don't think that's my "take on it" but a statement of fact. If the vast majority of fans think differently then they are wrong.

But without the cash injection there would be very little prospect of a successful football club and in two years FoH, if the pledges were still coming in, would probably be buying a 2nd or 3rd division club with very little prospect for a successful team!

 

 

Sent from my iPhone using Tapatalk

[portobellojambo1]

Looking back through the various agreements and accounts of FOH and BIDCO, I've found contradictory statements of how the Bidco loan will be repaid.

 

From the recent FOH Accounts:

From June 2016, the Foundation will start to make payments to Bidco (1874) Ltd to acquire a corresponding stake in the senior loan advanced to Heart of Midlothian plc. The Foundation will pay ?800,000 each year for a three year period. By 9 May 2019, the Foundation will own the whole of the senior loan. Heart of Midlothian plc will owe ?3.8m under the subordinated loan and ?2.4m under the senior loan directly to the Foundation.

 

From the BIDCO / FOH Funding agreement

11.2 Subject to clause 12, beginning on 1 June 2016, the Foundation shall ensure that it utilises 95 per cent of Fan Contributions collected by it each month during each subsequent year of the Term to acquire Participations in the Senior Loan at a minimum of ?200,000 per quarter until such time as the Bidco Proportion of the Senior Loan is zero.

 

So it looks like FOH believes it will repay the loan element at ?800,000 per annum over three years. However, Bidco seems to expect that 95% of the pledges will be used to repay the loan, with a minimum of ?200,000 a quarter.

 

The difference is timescales between the two expectations could be as much as a year, with a corresponding reduction in how much the fans will ultimately contribute before fan ownership is achieved..  I sense that another emailed question may be required.

 

 

Maybe I am missing something fairly straightforward or logical here FF, and if I am I apologise. But I have looked at the above, and it appears the amount of money in question is ?2.4 million, the senior loan

 

From the FOH accounts this is shown as a figure to be paid over as ?800,000 per annum for a period of three years, a total of ?2.4million

 

From the funding agreement it appears that money will be paid across from FoH to Bidco at a minimum of ?200,000 per quarter, i.e. ?800,000 per annum, for said period, to ensure the loan figure of ?2.4 million is met. However, lets say 95% of the amount raised per quarter is actually ?250,000, just for example purposes, and FoH are therefore actually transferring a total of ?3 million to the club per annum, a differential of ?600,000.

 

My interpretation, and it is only mine, is that the loan amount remains at ?2.4 million, and the additional money moving, under the 95% figure, from FoH to Bidco would then be used for the general running of the club, rather than sitting in FoH's bank account. The loan amount will already be subject to some form of trust agreement I'd imagine, and written in stone, i.e. the repayment figure will have been signed off and be legally binding on both sides, and problems would only arise if FoH were not able to meet the minimum amount.

 

In the example I gave of the 95% being ?250,000 per quarter, if it transpired that the differential of ?600k eventually ended up going back to Ann Budge, via Bidco, I wouldn't so much as raise an eyebrow, I would class that as money very, very, very, well spent.

[Footballfirst]

PJ1 - My interpretation is that Bidco expects 95% of the funds raised from fans to pay down the loan until the balance is zero.  FOH expects to pay ?800,000 per annum for three years.

 

If pledges are maintained at current levels then it should be possible to pay down the loan under Bidco's terms in under two years (including interest)

In FOH's terms it would be three years, with an excess of funds collected, after interest, of around ?1.2M. 

 

It may be that FOH intend that the excess funds will be used as working capital or for some other purpose.  It isn't clear from the FOH statement in their accounts.

[JamboAl]

you may well be right though i think your examples were pay now buy now, where what is bought is a voucher or discount for future purchases. That's the trouble with analogies - you end up discussing the merits of the analogy!

You're getting yourself tied up with your pseudo argument about analogies which are red herrings.

You pay NOW for a voucher and buy LATER whatever you want within a specified time limit.

[Francis Albert]

You're getting yourself tied up with your pseudo argument about analogies which are red herrings.

You pay NOW for a voucher and buy LATER whatever you want within a specified time limit.

Fine. You win on the analogy front if that's what matters to you.

[Footballfirst]

I got an answer to my email from Ian Murray

 

 

 

Dear Mr Footballfirst,

Many thanks for your email.

Both statements are correct. The FoH accounts reflect the BIDCO 1874 agreement that FoH has.

The senior loan is the monies used by BIDCO 1874 to deliver the CVA. This has to be paid back to BIDCO from FoH from years 3-5 of the deal.

FoH are contractually obliged to pay ?800,000 in each of these years to clear this loan. The shares in the Club will then transfer to FoH at the conclusion of the agreement. It was thought that this was the best way forward to have a timeframe attached and the amount is merely divided by the number of years. Any agreement that was for a shorter timeframe, say 2 years, would have put too much onus on FoH to raise much more.

The legal and formal accounts reflect that contractual obligation.

The actual BIDCO 1874 agreement says the same thing. That FoH is contractually obliged to pay a minimum of ?200,000 per quarter (?800,000 a year) to meet the requirements of repayment of the senior loan.

If FoH has more resources and pays over 95% of those resources the senior loan will be paid back quicker.

If the Club require some additional working capital in that time the Members of FoH can agree for it to be used for those purposes but that would be up to the members.

If we carry on the same trajectory we will pay off the loan faster than the contractual minimum.

I hope that explains the situation.

Merry Xmas,

--
Ian Murray MP
Chair
Foundation of Hearts

 

What I take from the email is that it will be a choice for FOH members to make down the line whether or not to pay off the loan sooner, if finances permit, or to contribute additional working capital to the club during the repayment period.  I still think that Bidco could insist on the 95% contributions rather than the ?200,000 a quarter though.

[Mikey1874]

still think the key will be that the supporter ownership model is developed fully so everyone is happy we are ready for it and it can happen smoothlt

 

agree finances are relevant eg the question of a major drop in direct debits or above point re paying off sooner, working capital etc etc

 

but the time helps to get it right

[Footballfirst]

Final lot of emailed questions answered.

 

http://www.heartsfc.co.uk/news/4063

[Francis Albert]

The answer to Q7 is so misleading that if one of the Rangers directors had given it at the AGM yesterday they would be ridiculed. The purchase of the shares at a pittance only happened because of the wider arrangement whereby Ann pays ?2.4m and gets it all back with interest while FoH pays ?6.3m and never sees a penny of it again.

 

There is quite a bit of spinning going on in some of the other answers too, which I'll come back to.

 

And the answer to Q8?

[Malinga the Swinga]

The answer to Q7 is so misleading that if one of the Rangers directors had given it at the AGM yesterday they would be ridiculed. The purchase of the shares at a pittance only happened because of the wider arrangement whereby Ann pays ?2.4m and gets it all back with interest while FoH pays ?6.3m and never sees a penny of it again.

You really have a bee in your bonnet about the whole shareholding transaction. If you are so unhappy, why not just cancel d/d and complain direct to Mrs Budge, or else carry d/d on and stand for election to FOH with this as your main campaign point.

 

Other than this, it just comes across as nit picking on the highest order.

[SUTOL]

And the answer to Q8?

 

 

http://www.qltr.gov.uk/  

 

HTH. 

[Franco Fascione]

Ann Budge bought the shares via the open offer, they belong to her. She can do what she wants with them.

 

I'm happy that our direct debits are initially going on improvements to the club/stadium and to provide financial stability, whilst AB's business plan is implemented, which I'm sure will make us an economically viable business, which we haven't been for a very, very long time.

 

I believe in accountability. I reckon AB and the board have given us more info in the last six months than Robinson or Romanov ever did. I'm sure I read somewhere AB was reluctant to get involved in buying Hearts at first - I can understand that due to fickleness of supporters.

 

We do have the right to ask questions however some folk on JKB never seem to be happy with the answers given and I don't think they ever will. So, what is it that some folk are actually trying to achieve?

 

Accountability? (See above).

The truth? (Whatever that is).

The answer they want to hear so they can say: I told you so.

Jealousy?

Every decision made by the board on a daily basis put up for their approval?

Be divisive?

 

Ann Budge had the money to save our club. She appeared to be the only person able and willing to do so. She's a successful business woman. I think we are very fortunate to have her in charge. Just look at other clubs and their owners.

 

The Bidco/FOH/supporters deal is what it is and we still have a club to follow.

[Francis Albert]

Ann Budge bought the shares via the open offer, they belong to her. She can do what she wants with them.

 

I'm happy that our direct debits are initially going on improvements to the club/stadium and to provide financial stability, whilst AB's business plan is implemented, which I'm sure will make us an economically viable business, which we haven't been for a very, very long time.

 

I believe in accountability. I reckon AB and the board have given us more info in the last six months than Robinson or Romanov ever did. I'm sure I read somewhere AB was reluctant to get involved in buying Hearts at first - I can understand that due to fickleness of supporters.

 

We do have the right to ask questions however some folk on JKB never seem to be happy with the answers given and I don't think they ever will. So, what is it that some folk are actually trying to achieve?

 

Accountability? (See above).

The truth? (Whatever that is).

The answer they want to hear so they can say: I told you so.

Jealousy?

Every decision made by the board on a daily basis put up for their approval?

Be divisive?

 

Ann Budge had the money to save our club. She appeared to be the only person able and willing to do so. She's a successful business woman. I think we are very fortunate to have her in charge. Just look at other clubs and their owners.

She didn't.

[Franco Fascione]

She didn't.

Okay she didn't, so what?

 

I reckon Ann Budge is the best things to happen to Hearts, in a business sense, in twenty years. I'll print off and literally eat my words on paper if it turns out she isn't!

[Clerry Jambo]

Ann Budge bought the shares via the open offer, they belong to her. She can do what she wants with them.

 

I'm happy that our direct debits are initially going on improvements to the club/stadium and to provide financial stability, whilst AB's business plan is implemented, which I'm sure will make us an economically viable business, which we haven't been for a very, very long time.

 

I believe in accountability. I reckon AB and the board have given us more info in the last six months than Robinson or Romanov ever did. I'm sure I read somewhere AB was reluctant to get involved in buying Hearts at first - I can understand that due to fickleness of supporters.

 

We do have the right to ask questions however some folk on JKB never seem to be happy with the answers given and I don't think they ever will. So, what is it that some folk are actually trying to achieve?

 

Accountability? (See above).

The truth? (Whatever that is).

The answer they want to hear so they can say: I told you so.

Jealousy?

Every decision made by the board on a daily basis put up for their approval?

Be divisive?

 

Ann Budge had the money to save our club. She appeared to be the only person able and willing to do so. She's a successful business woman. I think we are very fortunate to have her in charge. Just look at other clubs and their owners.

 

The Bidco/FOH/supporters deal is what it is and we still have a club to follow.

 

[Francis Albert]

Okay she didn't, so what?

 

I reckon Ann Budge is the best things to happen to Hearts, in a business sense, in twenty years. I'll print off and literally eat my words on paper if it turns out she isn't!

 

I agree with your second sentence.

 

However I think the answer to Q7 (whoever wrote it) was evasive and misleading. And I think Ann getting just over 13% of the shares (and ownership) for ?20k when all 8000 of the rest of us get a total of 75.1% for ?6.3m is indefensible. Which maybe explains the answer to Q7.

[Franco Fascione]

I agree with your second sentence.

 

However I think the answer to Q7 (whoever wrote it) was evasive and misleading. And I think Ann getting just over 13% of the shares (and ownership) for ?20k when all 8000 of the rest of us get a total of 75.1% for ?6.3m is indefensible. Which maybe explains the answer to Q7.

Okay, I guess we won't agree on everything. I don't grudge her the 13% shareholding one little bit. Whether she keeps it for 'sentimental' reasons as a legacy/inheritance for her family. Or, she sells it at some point for a profit. I don't care. She saved the Jam Tarts and I for one don't feel hard done by, I don't feel deceived or misled. Each to their own.

[Disco Dave]

Ann Budge bought the shares via the open offer, they belong to her. She can do what she wants with them.

 

I'm happy that our direct debits are initially going on improvements to the club/stadium and to provide financial stability, whilst AB's business plan is implemented, which I'm sure will make us an economically viable business, which we haven't been for a very, very long time.

 

I believe in accountability. I reckon AB and the board have given us more info in the last six months than Robinson or Romanov ever did. I'm sure I read somewhere AB was reluctant to get involved in buying Hearts at first - I can understand that due to fickleness of supporters.

 

We do have the right to ask questions however some folk on JKB never seem to be happy with the answers given and I don't think they ever will. So, what is it that some folk are actually trying to achieve?

 

Accountability? (See above).

The truth? (Whatever that is).

The answer they want to hear so they can say: I told you so.

Jealousy?

Every decision made by the board on a daily basis put up for their approval?

Be divisive?

 

Ann Budge had the money to save our club. She appeared to be the only person able and willing to do so. She's a successful business woman. I think we are very fortunate to have her in charge. Just look at other clubs and their owners.

 

The Bidco/FOH/supporters deal is what it is and we still have a club to follow.

Great post.

 

With regards to Ann making a profit on her shares..... who cares.  The club is well on the road to being saved, we should come back stronger and in a better position than we've been financially in my lifetime.  

 

Ann will make a fair return on the capital invested up front and if she keeps a few shares at the end when FOH take control, then I personally don't grudge her them one bit.  I didn't see anyone else coming up with a viable alternative.  Don't forget that she is not drawing a wage either.  I would assume that those in control at other clubs our size are taking 6 figures out annually in pay, perks, bonuses, pension contributions etc.  

[Disco Dave]

The answer to Q7 is so misleading that if one of the Rangers directors had given it at the AGM yesterday they would be ridiculed. The purchase of the shares at a pittance only happened because of the wider arrangement whereby Ann pays ?2.4m and gets it all back with interest while FoH pays ?6.3m and never sees a penny of it again.

 

There is quite a bit of spinning going on in some of the other answers too, which I'll come back to.

 

And the answer to Q8?

 

Comparing Budge to that shower is a bit harsh is it not?  She hasn't exactly stumped up the cash risk free either.  There was a very real risk that as soon as the club was perceived to be "saved", that people might start cancelling their direct debits, not bother buying season tickets in big numbers, buying merchandise etc. What would have happened to her investment in that situation?

 

Budge has been nothing but open and (as far as I can see) honest with the running of the club, she is trying to get us back on the right moral footing with the community and with the poor employees who have been through the mill with their colleagues being made redundant, wages unpaid etc.  To compare her to any of the clowns running Rangers is unfair to say the least.

[Francis Albert]

Comparing Budge to that shower is a bit harsh is it not?  She hasn't exactly stumped up the cash risk free either.  There was a very real risk that as soon as the club was perceived to be "saved", that people might start cancelling their direct debits, not bother buying season tickets in big numbers, buying merchandise etc. What would have happened to her investment in that situation?

 

Budge has been nothing but open and (as far as I can see) honest with the running of the club, she is trying to get us back on the right moral footing with the community and with the poor employees who have been through the mill with their colleagues being made redundant, wages unpaid etc.  To compare her to any of the clowns running Rangers is unfair to say the least.

I was talking about one answer to one question. Of course I am not comparing Ann to the Rangers spivs in any more general sense.

 

I think the risks you talk about are exaggerated (the worst that could happen was she would end up with an asset worth more than her investment, though I suppose with quite a large

moral quandary about realising that asset). The rest of the 8000 of us risk collectively paying millions without getting a single share - a risk I am happy for us to

take.

[Disco Dave]

I was talking about one answer to one question. Of course I am not comparing Ann to the Rangers spivs in any more general sense.

 

I think the risks you talk about are exaggerated (the worst that could happen was she would end up with an asset worth more than her investment, though I suppose with quite a large

moral quandary about realising that asset). The rest of the 8000 of us risk collectively paying millions without getting a single share - a risk I am happy for us to

take.

She would go from a nice well earned retirement to having protests aimed at her (or worse if recent history is considered) when the family silver is being sold and us presumably packing off to murrayfield or wherever. I'd say the risk to Budge is not insignificant at all. Of course it doesnt look that way now with everything being relatively rosey on and off the park but hindsight is a wonderful thing.

[Footballfirst]

Comparing Budge to that shower is a bit harsh is it not?  She hasn't exactly stumped up the cash risk free either.  There was a very real risk that as soon as the club was perceived to be "saved", that people might start cancelling their direct debits, not bother buying season tickets in big numbers, buying merchandise etc. What would have happened to her investment in that situation?

 

Budge has been nothing but open and (as far as I can see) honest with the running of the club, she is trying to get us back on the right moral footing with the community and with the poor employees who have been through the mill with their colleagues being made redundant, wages unpaid etc.  To compare her to any of the clowns running Rangers is unfair to say the least.

 

The only risk that Ann is taking is that she would be left owning the club without a prospective buyer, rather than owning the club with a prospective buyer who is also pouring millions into the running of the business in advance of buying it.

 

By the first anniversary of the club coming out of administration in June 2015, FOH pledgers will have contributed more to the club than Ann, while Ann will also have received ?144,000 in interest payments, and just the four more years to go.

[JamboGraham]

The only risk that Ann is taking is that she would be left owning the club without a prospective buyer, rather than owning the club with a prospective buyer who is also pouring millions into the running of the business in advance of buying it.

 

By the first anniversary of the club coming out of administration in June 2015, FOH pledgers will have contributed more to the club than Ann, while Ann will also have received ?144,000 in interest payments, and just the four more years to go.

Agreed, however the FOH did not have funds in place to do any deal at the time it was required. You do seem rather frustrated at this situation. Can I ask why? Do you simply feel misled, or do you feel that something more sinister is taking place?

[Footballfirst]

Agreed, however the FOH did not have funds in place to do any deal at the time it was required. You do seem rather frustrated at this situation. Can I ask why? Do you simply feel misled, or do you feel that something more sinister is taking place?

 

There is nothing sinister whatsoever. Ann Budge is acting as a very professional business woman, looking after both her own interests and the club's.

 

My issue is with the time scales and the ultimate cost to fans. The time scales being up to 5 years and 8 months from the first pledge and the cost to fans of up to ?8M.

[JamboGraham]

There is nothing sinister whatsoever. Ann Budge is acting as a very professional business woman, looking after both her own interests and the club's.

 

My issue is with the time scales and the ultimate cost to fans. The time scales being up to 5 years and 8 months from the first pledge and the cost to fans of up to ?8M.

I think you have a reasonable argument with the timescale and cost. It is not an argument that I support but I certainly understand it.

 

I am personally not in favour of full fan ownership but I do like the model of 'fan funded' with a steward acting in the best interests of the club to utilise those funds. I believe this is what we currently have and I would gladly go along with this model indefinitely. Of course this requires a good 'steward' but I believe we have that. This may seem odd coming from an FOH member but FOH really did seem to offer the only option so I chose to support it. I actually view what we have now as the best of both worlds.

[CJGJ]

I think you have a reasonable argument with the timescale and cost. It is not an argument that I support but I certainly understand it.

 

I am personally not in favour of full fan ownership but I do like the model of 'fan funded' with a steward acting in the best interests of the club to utilise those funds. I believe this is what we currently have and I would gladly go along with this model indefinitely. Of course this requires a good 'steward' but I believe we have that. This may seem odd coming from an FOH member but FOH really did seem to offer the only option so I chose to support it. I actually view what we have now as the best of both worlds.

When FOH own the club and we have a responsible hand on the tiller then we will have the best of both worlds...at the moment we have a pretty good world.

 

Once more the nit pickers come out..(well actually just the usual suspects) who pretend to raise new questions that have already been answered.

 

Imagine complaining about a possible surplus and a CHOICE to pay back the lump sum earlier or have it invested in the club...it baffles me.

 

The lack of trust shown by some actually saddens me especially as they have been given opportunities time and time again to ask questions, they get replies then make up more questions only slightly different from what was answered before..you have to ask why.

 

You've had your chance now is the time to suffer in silence whilst the rest of us ENJOY the trip....at next years AGM'S store them up and come again but until then stop trying to drag the club down for that is what it seems.....more and more I am awaiting the question    'Where's the deeds ?'

 

If and when something happens then come back to us and tell the JKB world 'I told you so'..........but I'm willing to bet in 4 years or so FOH will own the club,  You'll be sitting on the outside looking in wishing you had enjoyed the experience instead of carping on and on from the outside..............and when someone asks in the future what you did in the clubs  'war of survival'  you can tell them I moaned and groaned just in case there was something wrong......and was there ?.............NO.

[Franco Fascione]

There is nothing sinister whatsoever. Ann Budge is acting as a very professional business woman, looking after both her own interests and the club's.

 

My issue is with the time scales and the ultimate cost to fans. The time scales being up to 5 years and 8 months from the first pledge and the cost to fans of up to ?8M.

 

 

I'm actually happy at the time scales and don't care about the cost to me, personally, although I realise others will.  Ann Budge stated 'somewhere' she had a 5 year business plan.  If it takes the entire 5 years to implement the business plan then fine.  Somehow I don't think it will take that length of time as we are already making huge strides off the park, maybe those time scales can then be adjusted downwards.

 

We might not own our club yet, however to me, it feels like we have our club back for the first time since Wallace Mercer was in charge.

[1874robbo]

When FOH own the club and we have a responsible hand on the tiller then we will have the best of both worlds...at the moment we have a pretty good world.

 

Once more the nit pickers come out..(well actually just the usual suspects) who pretend to raise new questions that have already been answered.

 

Imagine complaining about a possible surplus and a CHOICE to pay back the lump sum earlier or have it invested in the club...it baffles me.

 

The lack of trust shown by some actually saddens me especially as they have been given opportunities time and time again to ask questions, they get replies then make up more questions only slightly different from what was answered before..you have to ask why.

 

You've had your chance now is the time to suffer in silence whilst the rest of us ENJOY the trip....at next years AGM'S store them up and come again but until then stop trying to drag the club down for that is what it seems.....more and more I am awaiting the question 'Where's the deeds ?'

 

If and when something happens then come back to us and tell the JKB world 'I told you so'..........but I'm willing to bet in 4 years or so FOH will own the club, You'll be sitting on the outside looking in wishing you had enjoyed the experience instead of carping on and on from the outside..............and when someone asks in the future what you did in the clubs 'war of survival' you can tell them I moaned and groaned just in case there was something wrong......and was there ?.............NO.

 

Hear Hear

[Coco]

http://www.qltr.gov.uk/  

 

HTH. 

 

 

What a name to have on the shareholder register!  Queen's and Lords Treasurer's Remembrancer.  With the senior service link we are truly becoming the club of the establishment!

 

Not hugely clear from that website if the shares can ever be taken out of the Remembrancer's grasp.  Nor does adding that shareholding if possible to unfreeze(!) to the prospective BIDCO retained shareholding give that potential holder huge influence (if hypothetically opposed to FoH's plans).

[Disco Dave]

The only risk that Ann is taking is that she would be left owning the club without a prospective buyer, rather than owning the club with a prospective buyer who is also pouring millions into the running of the business in advance of buying it.

 

By the first anniversary of the club coming out of administration in June 2015, FOH pledgers will have contributed more to the club than Ann, while Ann will also have received ?144,000 in interest payments, and just the four more years to go.

 

I think you will find there was a very real risk that she ended up with the club on her hands and a potentially poor income stream to fund it as a going concern. It doesn't seem to have turned out like that but it was a risk all the same.

 

You clearly know a lot more about all this financial wizardary than me but with regards to her earnings, well ?144,000 a year interest plus a some shares over 5 years is a nice return for the fine job she is doing in my opinion.  Serious question, what do you think 13% of the shares in the club would be worth in 5 years?........ lets be very generous and say ?500,000.  I'm no actuary but very rough fag packet calcs mean she is maybe making somewhere in the region of 10% per annum on her investment - This is a great return from her point of view and certainly not a return she would get from the banks.   However, show me a bank that would be prepared to lend us money on any terms and I think you would be doing well.

 

It is not a risk/effort free investment either.  Budge is putting in a serious amount of work/effort into helping revive the club and I think she is worth every penny - Firstly as compensation for coming up with the cash in our hour of need and secondly for all the hard work she is doing.

[Gibbo]

If somebody owns 75.1% of the shares in a company, then they can ignore the wishes of the other shareholders as they have enough shares to get any motion through an AGM or EGM.

 

The other shares would be of value if the company is a PLC and it was taken over, as the buyer would have to offer all shareholders the same price per share.

 

If, as has been suggested, HMFC becomes a private limited company this would now longer be the case as this law applies only to PLCs.

 

As there is little chance of HMFC being taken over, the only buyers of AB's shares would be fans wanting a small shareholding. Given the number of shares she owns and the number of fan shareholders after the 2012 issue, it would take an extremely long time to sell her remaining holding in this manner.

[Francis Albert]

I think you will find there was a very real risk that she ended up with the club on her hands and a potentially poor income stream to fund it as a going concern. It doesn't seem to have turned out like that but it was a risk all the same.

 

You clearly know a lot more about all this financial wizardary than me but with regards to her earnings, well ?144,000 a year interest plus a some shares over 5 years is a nice return for the fine job she is doing in my opinion.  Serious question, what do you think 13% of the shares in the club would be worth in 5 years?........ lets be very generous and say ?500,000.  I'm no actuary but very rough fag packet calcs mean she is maybe making somewhere in the region of 10% per annum on her investment - This is a great return from her point of view and certainly not a return she would get from the banks.   However, show me a bank that would be prepared to lend us money on any terms and I think you would be doing well.

 

It is not a risk/effort free investment either.  Budge is putting in a serious amount of work/effort into helping revive the club and I think she is worth every penny - Firstly as compensation for coming up with the cash in our hour of need and secondly for all the hard work she is doing.

So is she giving her time freely or not? You can't have it both ways.

 

The share question is not about value. It's about fairness or equity between the parties who are together saving the club. FoH members will in practice have paid almost all of the true cost of acquiring these shares. No-one IMO needs a 13% shareholding for "sentimental" reasons and despite what the answer to Q7 says a 13% interest holder does have certain powers that a shareholder with less than 5% or 10% doesn't have,

[Gibbo]

If there's a 75.1% shareholder, then the other shareholders have no powers as the majority shareholder can pass any motion at an AGM or EGM without needing the support of anybody else.

[XB52]

I find this thread really sad. We are having the best time for our club in probably 25 years, things are going fantastically well on and off the pitch, but that is not enough for some people (well one person really) and they have to have a go at FoH/Ann Budge no matter what. Said over and over again it has to be something personal in all this. Me, I am just sitting back and enjoying how great it feels to be part of something great

[Disco Dave]

So is she giving her time freely or not? You can't have it both ways.

 

The share question is not about value. It's about fairness or equity between the parties who are together saving the club. FoH members will in practice have paid almost all of the true cost of acquiring these shares. No-one IMO needs a 13% shareholding for "sentimental" reasons and despite what the answer to Q7 says a 13% interest holder does have certain powers that a shareholder with less than 5% or 10% doesn't have,

 

Budge is getting (in my opinion) a fair reward for stepping up in our hour of need.  She is not drawing a salary but is being paid a decent rate of interest plus a few shares - Well deserved.

 

Remember that without Budge, we (the FOH subscribers/supporters) would not be involved in the rescue at all.  So we wouldn't be doing anything together at all - Budge has contributed more than all of us put together so far.

 

Like the vast majority of fans, I'm happy with the terms of the deal and will continue to pay my direct debit.  You seem to be in the minority with some of your complaints so I think I'll step away and leave you to it.

[casper]

The answer to Q7 is so misleading that if one of the Rangers directors had given it at the AGM yesterday they would be ridiculed. The purchase of the shares at a pittance only happened because of the wider arrangement whereby Ann pays ?2.4m and gets it all back with interest while FoH pays ?6.3m and never sees a penny of it again.

 

There is quite a bit of spinning going on in some of the other answers too, which I'll come back to.

 

And the answer to Q8?

 

The way I understand it FOH are paying about ?1M a year for the 3 year and then the ?2.4M to buy the shares.

The ?1M is being used to help run the club and pay for footballing debs and stadium improvements.

The loan could be paid back quicker but at the end of the day the the money being given by FOH each year would have to be spent either now or after FOH take ownership.

I would rather it was spent now so that when FOH take over the club is on a even footing and the transition can be as painless as possible.

I really don't see any down side to this.

[2205ian]

I find this thread really sad. We are having the best time for our club in probably 25 years, things are going fantastically well on and off the pitch, but that is not enough for some people (well one person really) and they have to have a go at FoH/Ann Budge no matter what. Said over and over again it has to be something personal in all this. Me, I am just sitting back and enjoying how great it feels to be part of something great

I too find this rather sad & tend to shy away from giving my thoughts due to not having enough financial knowledge, despite 37 years in Banking before (very) early retirement!!. I am a member of FoH. Also "historic" shareholder for sentimental reasons including raising funds previously via 500 Club & other stadium changes. Watched HMFC for 50+ years (1st game vs Falkirk in 1963 on a Friday night due to Rugby International at Murrayfield next day)

 

WE MUST remember FoH did NOT have sufficient funds to purchase Club at time of need, despite the fantastic efforts of OUR support. Ann Budge with her astute appointments at Board & Football Management level deserve our full support. The "Revival" of OUR great Club has only begun, let's support them for EVERMORE.

 

Do the skeptics honestly expect FoH to expect members to stop DDs when the takeover takes place (in whatever timescale)? or will there being a realization that the additional funds for "working capital" will aid HMFC continue to be competitive in the years that follow. My DD will never be cancelled, until my daughter finds out when she has "Power of Attorney" over my financial affairs )

 

The above is my "simplistic" view of matters.

 

Merry Xmas to all fellow "Jambos", off to do my Santa run now. 

 

Finally, THANK YOU Robbie Neilson & the team for a fantastic season & let's hope our ambitions come true in May & WE return to where we belong!! Then without being too greedy, continue our march to future honors.

[Disco Dave]

I too find this rather sad & tend to shy away from giving my thoughts due to not having enough financial knowledge, despite 37 years in Banking before (very) early retirement!!. I am a member of FoH. Also "historic" shareholder for sentimental reasons including raising funds previously via 500 Club & other stadium changes. Watched HMFC for 50+ years (1st game vs Falkirk in 1963 on a Friday night due to Rugby International at Murrayfield next day)

 

WE MUST remember FoH did NOT have sufficient funds to purchase Club at time of need, despite the fantastic efforts of OUR support. Ann Budge with her astute appointments at Board & Football Management level deserve our full support. The "Revival" of OUR great Club has only begun, let's support them for EVERMORE.

 

Do the skeptics honestly expect FoH to expect members to stop DDs when the takeover takes place (in whatever timescale)? or will there being a realization that the additional funds for "working capital" will aid HMFC continue to be competitive in the years that follow. My DD will never be cancelled, until my daughter finds out when she has "Power of Attorney" over my financial affairs )

 

The above is my "simplistic" view of matters.

 

Merry Xmas to all fellow "Jambos", off to do my Santa run now. 

 

Finally, THANK YOU Robbie Neilson & the team for a fantastic season & let's hope our ambitions come true in May & WE return to where we belong!! Then without being too greedy, continue our march to future honors.

 

Very well said.

 

Merry xmas to you too

[Teuchterjambo]

This thread is appalling and just serves to feed the egos of those who seem to see themselves as some sort of self professed guardians for the rest of us who know no better. Welll ... the vast majority of us neither want or need your pseudo protection so just give it a rest.

 

Who is doing what and for what reward for me is largely irrelevant as long as the job is being done in the best interest of our club .... don't think there can be any doubt that the best interest of our club are being served well at the moment. To continually question in the manner that some are is insulting to the current board and the individuals on it and in particular Ann Budge , I really hope she doesn't read all this stuff.

 

The way the club has been managed since we exited administration has led me to trust the current management team/board and as long as I have that trust then I will continue to support them every way I can. As soon as that trust goes then I will change my thinking and start to question but don't see that happening any time soon.

 

Time to grab some Xmas spirit and be thankful that we still have a club to support and they are doing exceptional things at all levels ... Happy Xmas.

[corryjambo]

So is she giving her time freely or not? You can't have it both ways.

 

The share question is not about value. It's about fairness or equity between the parties who are together saving the club. FoH members will in practice have paid almost all of the true cost of acquiring these shares. No-one IMO needs a 13% shareholding for "sentimental" reasons and despite what the answer to Q7 says a 13% interest holder does have certain powers that a shareholder with less than 5% or 10% doesn't have,

 

 

You see, here is the thing, I willingly contribute to FOH and I am looking for nothing back in return, except a sound club, well run, and, if possible with success on the park.

 

I am sure that the vast majority of contributors are looking for excactly the same things, and while it requires diligence in ensuring our great club never returns to the shambles and uncertainty of the past I am confident in the stewardship of Mrs Budge and her fellow directors.

 

Do I care if she ends up with 13% of the shares?. No I do not because, in the final analysis, without her original investment we could well have been looking at liquidation and the death of this club that I love.

[Francis Albert]

I too find this rather sad & tend to shy away from giving my thoughts due to not having enough financial knowledge, despite 37 years in Banking before (very) early retirement!!. I am a member of FoH. Also "historic" shareholder for sentimental reasons including raising funds previously via 500 Club & other stadium changes. Watched HMFC for 50+ years (1st game vs Falkirk in 1963 on a Friday night due to Rugby International at Murrayfield next day)

 

WE MUST remember FoH did NOT have sufficient funds to purchase Club at time of need, despite the fantastic efforts of OUR support. Ann Budge with her astute appointments at Board & Football Management level deserve our full support. The "Revival" of OUR great Club has only begun, let's support them for EVERMORE.

 

Do the skeptics honestly expect FoH to expect members to stop DDs when the takeover takes place (in whatever timescale)? or will there being a realization that the additional funds for "working capital" will aid HMFC continue to be competitive in the years that follow. My DD will never be cancelled, until my daughter finds out when she has "Power of Attorney" over my financial affairs )

 

The above is my "simplistic" view of matters.

 

Merry Xmas to all fellow "Jambos", off to do my Santa run now. 

 

Finally, THANK YOU Robbie Neilson & the team for a fantastic season & let's hope our ambitions come true in May & WE return to where we belong!! Then without being too greedy, continue our march to future honors.

For whatever relevance it has I have been supporting Hearts for longer than you.

 

I am grateful to Ann, but  don't think paying about a million in arrangement fees, costs and interest for a ?2.5m loan is an unprecedentedly great deal. You mention (though of course on a smaller scale) the 500 Clubs for example.  

 

But it seems it was all that was on the table, so as I say am very grateful for it.

 

I know for some reason it annoys people to be reminded that we in the form of FoH will pay in percentage terms infinitely more than Ann but I think its worth remembering.

 

Anyway I'll leave it there until after the festive season.

 

Happy Christmas to everyone.

[stevenson1]

She would go from a nice well earned retirement to having protests aimed at her (or worse if recent history is considered) when the family silver is being sold and us presumably packing off to murrayfield or wherever. I'd say the risk to Budge is not insignificant at all. Of course it doesnt look that way now with everything being relatively rosey on and off the park but hindsight is a wonderful thing.

I`m with you Dave. While some are racking up their post count Ms. Budge is helping rack up our points total 

[J.T.F.Robertson]

You see, here is the thing, I willingly contribute to FOH and I am looking for nothing back in return, except a sound club, well run, and, if possible with success on the park.

 

I am sure that the vast majority of contributors are looking for excactly the same things, and while it requires diligence in ensuring our great club never returns to the shambles and uncertainty of the past I am confident in the stewardship of Mrs Budge and her fellow directors.

 

Do I care if she ends up with 13% of the shares?. No I do not because, in the final analysis, without her original investment we could well have been looking at liquidation and the death of this club that I love.

 

Ditto for me, J.

Ann can continue "exploiting" me for as long as she likes. I know we're in good hands.

 

All the best to you and yours.

[Franco Fascione]

Time for a poll!

[SUTOL]

 

I know for some reason it annoys people to be reminded that we in the form of FoH will pay in percentage terms infinitely more than Ann but I think its worth remembering.

 

 

 

But at 'the end' Ann will have a little and FoH will have a lot. And as has been said a little earlier in this thread, FoH were going to be spending money on the club anyway in the early years, so it makes very little difference if it's spend with Ann having ownership or with FoH (if they had got the initial funding from elsewhere).

[Francis Albert]

Now that I have got over the festive season, as promised  few more comments on the answers to the supplementary AGM questions. In the familiar Saturday evening TV news words, IF YOU DON'T  WANT TO KNOW LOOK AWAY NOW. The answers generally strike me as wee bit more defensive and chippy than what we had at the AGM.

 

Q1 was mine. The answer has chosen to compare budget and forecasts with the later updated budget rather than the original "worst case" budget. My guestimate of ?1.4m improvement in forecast revenue vs the worst case budget estimate was pretty much spot on. The forecast loss (before FoH contribution) has reduced by approx. ?400k with additional spend on staff costs (?350k) and overheads (?600k) largely explaining where the rest of the improvement in revenue has gone.

The answer to the second part about what accounts for the changes in forecast costs also doesn't add much to the info provided at the AGM - although the ?150k increase in facility improvement and essential maintenance costs doesn't seem to justify the level of emphasis put on that element. 

 

Q2 1) is ignored. The answer is the total cost to FoH to finally purchase shares will be ?6.3 to ?6.8m depending on whether you treat the interest on Bidco's loan as being paid by FoH or the club (it amounts to much the same thing in practice). Not sure why the shyness about this.

 

Q3. The answer denies any speculation is going on. I am not sure why. It is obvious from the figures and the increase in expenditure vs the worst case budget that there is some "discretionary" spending above budget is going on. I'd call thatspeculation. Some modest speculation taking advantage of increased revenue to improve our chances of getting promotion this year seems common sense and I think would be (is) universally supported. The rest of the answer seems to me a bit evasive and/or misleading. It suggests that the early repayment of Bidco's loan would significantly reduce the financial risk to Bidco. I don't think you can reduce significantly a risk that isn't significant - the Bidco/FoH agreement provides layers of protection to Bidco. It also says Bidco is losing money by providing the loan. That may be true in some accounting sense but  a loan at a 6% interest rate (with arrangement fees and set up costs paid)  - currently over 5% real interest - is not really loss making. I'd love some of that sort of loss!

 

Q4 is about the risk of promotion being delayed and DDs dropping off. The answer says fan ownership would be at risk with the biggest risk being to Bidco. I find that incomprehensioble. In those circumstances Bidco will own Hearts and have an asset, If that asset is not worth considerably more than the Bidco loan after receiving ?3.8m subsidy then Ann's famous business skills have been grossly exaggerated. The fans risk however will be having paid ?3.8m and owning nothing.

 

Q5 to Q10 to follow.

[JamboAl]

There may be sources of income we don't know about eg we received cash for WC participation, could be fresh sponsorship etc etc.

Some things are commercially sensitive and to get things tied down to the penny at this time is both unfair and unrealistic.

Accounts will be produced at the appropriate time and that is when the pitchforks, if required, can be dusted down and prongs sharpened.

[Francis Albert]

There may be sources of income we don't know about eg we received cash for WC participation, could be fresh sponsorship etc etc.

Some things are commercially sensitive and to get things tied down to the penny at this time is both unfair and unrealistic.

Accounts will be produced at the appropriate time and that is when the pitchforks, if required, can be dusted down and prongs sharpened.

The increased revenue over original worst case assumptions can pretty much all be explained by increased ST and walk up sales. I am quite satisfied with the level of detail provided and my pitchforks are (if I have any) still in some dusty and long forgotten corner of the garden shed. Some of the spin and evasions in some of the answers is disappointing and a bit below the standards of open-ness I'd expect. To be continued!

[topcat]

The increased revenue over original worst case assumptions can pretty much all be explained by increased ST and walk up sales.

It would be surprising if things weren't better than worst case assumptions.

 

That's pretty much inherent to the nature of worst case assumptions