Trust Chair Keith Morgan provides his view on a recent Cardiff City Football Club shareholders’ letter.
A letter was recently sent out to the shareholders of Cardiff City Football Club (Holdings) Limited regarding the proposal to issue 45 million new shares in the company.
Although the letter, or a subsequent one inviting existing shareholders to buy some of these shares, did not specify exactly why they were being issued it is almost certain to be for a combination of the following reasons:
- To enable Vincent Tan to convert some more of the debt due to him into shares to continue with his promise in 2016 to make the club debt-free.
- To raise more cash from share subscriptions to improve the club`s cash flow position – this could come from both existing and new share investors.
The impact of the Covid-19 pandemic has, like with a large number of other football clubs, had a major drain on the club`s finances and so a significant take up of the new shares on offer would be most welcome.