The Pars Community won't back the club's share issue
Published 8 Feb 2013 11:31 0 Comments
THE Pars Community are not backing the club's share issue and say it's not a great deal for supporters.
The group, which has an alternative vision for the Pars to become a fan-owned football club, said Gavin Masterton's plans offered no long-term viability.
A press release was issued by the Pars Community on Tuesday evening. Here it is in full.
"On 18th January 2013, a press release was issued on behalf The Pars Community ('TPC'), an alliance of Dunfermline Athletic supporters which is solely interested in ensuring the long term and sustainable future of Dunfermline Athletic as a supporter owned football club.
"Since then, and on more than one occasion, TPC has sought in good faith to enter into discussions with the club's major shareholder. TPC continues to believe that this is the best way forward for the club and hopes that the major shareholder will agree to enter into meaningful dialogue with TPC in the near future.
"However, the only dialogue we have been afforded so far, other than the exchange of letters, is a 35 minute meeting which did not provide any real opportunity for either party to understand each other's vision or circumstances.
"It is most disappointing that the major shareholder has to date shown so little interest in meeting with TPC.
"We believe passionately in our vision for the club as a community asset with the playing activities of the club being owned by supporters.
"We have been hugely encouraged by the response to our initial press release from a wide constituency of those who have the long term best interests of the club at heart.
"Indeed, we have already been challenged to 'think bigger' and to believe that in the right circumstances our vision could secure new investment at a level considerably higher than the £500,000 we had initially assumed could be possible.
"TPC is sincere in acknowledging once again the gratitude which those associated with the club owe to Gavin Masterton for the way he has steered the club through difficult waters over the past 15 years and for the significant personal and financial investment he has made in the club.
"However, in view of the club's present challenges, which are significant, TPC believes that it is now time for a fundamental change in the ownership of the club and a fresh approach to the business of running the club.
"In the view of TPC, the published balance sheet of the club shows a business which is now significantly over leveraged and, while possibly fit for purpose in the heady days before the recession, most unlikely to be viable in the long term unless radical surgery is performed quickly, along the lines proposed by TPC.
"It is not clear to TPC how the club's parent company, with publicly disclosed group creditors of over £42 million and ordinary share capital of £1 (held by Gavin Masterton), will be able to provide the long term stability and viability which the club now requires if it is to avoid an unfavourable outcome.
"TPC listened with interest to the presentation by the major shareholder and a number of his colleagues at the Pars Alive meeting on 31st January 2013.
"Much of the presentation was taken up with a discussion about the major shareholder's proposal to seek investment of at least £300,000 from supporters.
"According to one of Mr Masterton's colleagues who presented at the meeting, a key aim of the share issue is to raise short term working capital for the club and allow it to survive until next season.
"This is not the same as providing long term stability and financial viability.
"TPC believes it is important that all those with the long term interests of Dunfermline Athletic at heart appreciate the fundamental differences in the way forward proposed by TPC and by the major shareholder.
"Our vision is that with immediate effect, the single largest share-holder in the football club, by far, would be the Pars Supporters' Trust with 50% of the shares.
"We also envisage a number of Pars Custodians, each holding no more than 10% of the shares.
"We have indicated that we would be willing to include Mr Masterton as one of the Pars Custodians.
"However in our view, it is crucial that the ordinary fans control the club without undue delay.
"We envisage a football club main board of four directors, each elected for a three year period to ensure continuity of strategic direction.
"Two directors would be elected by members of the Pars Supporters Trust and two by the Pars Custodians.
"Under our way forward therefore, the supporters of Dunfermline Athletic will immediately control the club, which would be in a much stronger financial position as a result of the new investment and balance sheet restructuring which we have suggested.
"In contrast, the proposals highlighted by and on behalf of the major shareholder at the recent Pars Alive meeting would mean the club would continue to be burdened with substantial debt and subject to considerable long term uncertainty.
"Most importantly, the club would remain under the control of Gavin Masterton.
"From what was said at the meeting we believe that there could be a number of significant consequences and implications of Mr Masterton's proposals, which supporters should be aware of:
1.Most significantly, supporters would own less than 25% of the club in the immediate future. This means that under company law, in return for an investment of at least £300,000, the supporters would have no ability to restrict the decision making power of the major shareholder.
2.Supporters would be offered a maximum of three seats (subject to annual re-election) on a board of at least seven. In such circumstances, the board would therefore continue to be controlled by Gavin Masterton and those loyal to him.
3.The club would still be burdened with debts of approximately £8m owed to companies controlled by Gavin Masterton. We understand that Mr Masterton proposes to write off only about 5% of this debt once supporters have invested in the club and to control the repayment of the remainder over a period of time from 'extraordinary' cash receipts (eg income from a successful cup run, other major games or transfer fees). This means that the supporters can have no assurance that any investment by them will create long term stability for the club. In addition, the first team manager can have no assurance of funds being available to continue improving the playing squad while loans remain outstanding to Mr Masterton.
4.Under Mr Masterton's proposals, supporters would only own 50% of the club once his debts have been repaid in full and there is no certainty of how long this will take. It could be many years.
5.Mr Masterton has proposed that the shares offered to supporters would be 'convertible redeemable shares'. In layman's terms, this means that Mr Masterton could further delay supporters gaining full control of the club.
6.The club currently enjoys the balance of a 30 year rent free lease of East End Park. However, since we understand that the Gavin Masterton controlled company which owns EEP has an interest deferred loan of over £12m outstanding, there can be no certainty that at some point in the future the terms of the club's lease of EEP will be changed materially by Mr Masterton or those who control Charlestown Holdings Limited (the club's parent company) to the disadvantage of the club. In contrast, the proposals put forward by TPC regarding the stadium are designed to ensure a much greater degree of certainty and security of tenure for the club.
7.While Mr Masterton has spoken of the potential of new sponsors lining up to support the club, we believe that the stability and financial certainty inherent in TPC proposals would be considerably more likely to attract new sponsors than the prospects of continued short term uncertainty, which Mr Masterton has alluded to as being a driving force behind his proposals.
8.We believe that once the club is owned by supporters, attendances and loyalty to the club will grow, leading to increased gate and commercial receipts. This will happen far sooner under TPC proposals.
"For all of the above reasons, TPC continues to believe that their proposals offer the best way forward for the club and accordingly, we hope that the major shareholder will agree to enter into meaningful dialogue with TPC in the near future.
"Indeed, it is the strong wish of TPC that any new share issue which seeks funds from the supporters of the club can be endorsed fully by TPC, thereby maximising the prospects of a successful outcome and minimising the possibility of any further instability.
"We have already confirmed in writing to Mr Masterton our willingness to work with him to achieve this outcome.
"However, as it stands, and in the absence of any meaningful dialogue with the major shareholder, TPC could not endorse the share offer proposals as presented at the recent Pars Alive meeting."
The TPC also added that, "Contrary to the statement which appeared on the official Dunfermline Athletic website on 1st February 2013 regarding the Pars Alive meeting held on 31st January 2013, and in particular the following paragraphs:
'Referring to the request for a meeting from group called Pars In the Community. He [Gavin Masterton] had met them within but dismissed their offer as "fanciful.
"Their offer is unacceptable. Some of the directors names were held back, there were three anonymous parties in the group that I find rather odd. For these reasons I replied to Pars in the Community declining their offer and have progressed with our plan for the share issue."'
TPC would like to point out the following:
1. The Pars Community is an alliance of Dunfermline Athletic supporters which is solely interested in ensuring the long term and sustainable future of Dunfermline Athletic.
2. The name of the alliance is The Pars Community, not 'Pars In the Community'.
3. The Pars Community is not a corporate entity. Accordingly, it has no 'directors'.
4. The reference to "three anonymous parties" is not only highly misleading but without any foundation. The Pars Community is at a loss to understand where this reference is drawn from.
5. The only members of The Pars Community who have had any discussions or correspondence with Gavin Masterton regarding The Pars Community and its proposals for the club are Donald Adamson and Ross McArthur.
6. The Pars Community has made no 'offer' to Gavin Masterton or any other shareholder of the club. It has merely developed and communicated 'proposals' and a 'vision' for the club and has sought to enter into further dialogue with Gavin Masterton in this regard.
7. The Pars Community will shortly be launching a website (www.thepars1885.org) where supporters of the club who share our vision will be able to register their interest in joining our alliance.
8. There will be a public meeting on 13th February 2013 at the Vine Church, Dunfermline to explain the vision of The Pars Community.