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[St. Sid]

The "best endeavours" clause is NOT a license to ignore or go against directives from the membership that they disagree with. It is to cover unforseen circumstances actually preventing the board from carrying out the directive e.g. illness or circumstances preventing action outwith their control.

Misrepresenting selected clauses from the Constitution does you no favours and - as I stated earlier - causes indecision in possible members decision to sign up. Indecision that you contributed to!

The Bii loan TO THE CIC is UNSECURED i.e. Bii would have no claim on SMFC assets.

Time you stopped your mischief Sid.

That's your interpretation of it Vambo. It is a clear get out clause. 10000 Hours have spoken many times about the fact that SMFC's BoD is tied by governence rules that mean they have to consider things like acting in the best interests of the their employees. There will be situations where there is conflict between what supporters want and what the SMFC Bod can deliver. In my opinion they need that clause for those situations. I reckon the SPL vote will be one of those situations and the 10000 Hours chaps have already indicated that scumgers not being in the SPL will mean around a £500K loss to SMFC. They will present the fans with what this would mean to the operations at the club and the implications of that - staff losing jobs, etc. I am quietly confident there will be enough conflict there for SMFC board to use the "best endeavours" clause. The point is we don't know do we? So telling people that they should sign up we'll be able to vote scumgers out of the SPL is a wee bit naughty.

10000 Hours covered the Bii not getting paid situation at the meeting last Thursday. One of the conditions is that if we fail to keep up the payments they can take control of the 52% shareholding. 10000 Hours say that the 52% shareholding is not considered to be SMFC assets. Perhaps in legal terms that's the case - however control of the club and being able to sell control of the club to me is in fans terms very much an SMFC asset.

[BoWSaint]

Now that the bid has been postponed until Thursday and the individual memberships have soared with the corporate backing falling short, do we know how many extra individual memberships will cover the shortfall in 87 club and 1877 club memberships to make up the agreement in principle?

[St. Sid]

Now that the bid has been postponed until Thursday and the individual memberships have soared with the corporate backing falling short, do we know how many extra individual memberships will cover the shortfall in 87 club and 1877 club memberships to make up the agreement in principle?

Dunno if there is scope to up the anti on the social fund loan...Bii can actually go up to £1Million; however I would rather see us hit the number on the initial lump sum amounts.

Fans should start thinking about clubbing together and perhaps splitting the benefits. For example, someone that uses the car park could go halfers with a booze bag that will want to use the pub. We need to get creative on the initial lump sum.

[buddienixon]

Dunno if there is scope to up the anti on the social fund loan...Bii can actually go up to £1Million; however I would rather see us hit the number on the initial lump sum amounts.

Is the £1m figure specific to the 10000hours deal or a general limit Bii set on any investment they make.

[Stuart Dickson]

Is the £1m figure specific to the 10000hours deal or a general limit Bii set on any investment they make.

It's a general limit

http://www.bigissueinvest.com/loan_finance.aspx

[buddienixon]

It's a general limit

http://www.bigissueinvest.com/loan_finance.aspx

Unlikely then that any shortfall could be made up by increasing the loan from them.

Best bet then is probably to ask the selling consortium to allow us to pay them less upfront but more in installments.

Do we think they'd be receptive to that?

[div]

Unlikely then that any shortfall could be made up by increasing the loan from them.

Best bet then is probably to ask the selling consortium to allow us to pay them less upfront but more in installments.

Do we think they'd be receptive to that?

Obviously can't really comment on that until that possibility arose and they were asked but given the way the numbers are in individual memberships it must be a possible option to explore when formulating the bid.

[Vambo57]

Questions for 10000hrs:

What I am about to ask may become academic very soon (the demise of ExGers), but just in case that does not happen:

We, as CIC members (or at least individual members) have been told by yourself that any vote of a possible newco's entry into the SPL would be taken by our representative, after all the information on possible losses for our football Club had been presented to CIC members and a vote taken at an EGM by them. With the SPL newco vote being taken on 4th July, I have three questions:

1. If our bid is accepted by the Consortium on Thursday, will it be the CIC's representative that will be voting at the SPL meeting on 4th July?

2. If so, will the CIC be calling an EGM of members before 4th July to listen to the info given, debate the matter, then vote.

3. If the CIC does not call an EGM, If we as members want to present the CIC board with some sort of call for an EGM, how many signatures and in what form do you require those signatures? e.g. can it be done online?

Thanks, and hoping for a speedy reply.

Edited June 19, 2012 by Vambo57

[Bud the Baker]

Is the CIC committed to buying all GLS's (& his two mystery shareholders) shares even if the 87 & 1877 takeup fails to reach the intended targets?

[Vambo57]

Vambo, please can you email the 10000Hours team and ask those questions, and then post the response.

Have done so.

[BLF]

The online FAQ on 10000Hours shows clearly what is being paid, when it is being paid, and where the money is coming from.

10000Hours have agreed deal in principle with the selling consortium to buy the majority shareholding for a total purchase price of £1.5 million over 3 years.

In order to fund this we will borrow £0.5m from a social investment fund with the remaining £1million coming from additional member subscriptions, turnover and the sale of Gordon Scott's shares.

The initial payment is funded based on the following numbers of subscribers;

• 750 x standard membership subscriptions at £10 per month (or an equivalent of £7.5k per month in member subscriptions) This in itself funds the £500,000 loan.
  
• 87 x 87 Club members each making £3000 lump sum payment.
  
• 9 x 1877 Non Executive board members each making £25,000 lump sum payment.
  

After 3 years the only outstanding borrowing should be the £500,000 loan from the social investment fund.

That will be paid off over an additional 5 years.

Div, sorry for going over old ground,

£900k due on day 1 = 500k from BII + 225k from 1877 club + 175k from 87 club

Leaving 86k in the pot and 600k to be paid. Is the plan that in the first 3 years the CIC will make £514k? (£270k from subs + £244k from 'other activities')

The loan is then paid off over the next 5 years? What rate is the loan? Is interest applied during the first 3 years?

Edited June 19, 2012 by BLF

[Stuart Dickson]

Div, sorry for going over old ground,

£900k due on day 1 = 500k from BII + 225k from 1877 club + 175k from 87 club

Leaving 86k in the pot and 600k to be paid. Is the plan that in the first 3 years the CIC will make £514k? (£270k from subs + £244k from 'other activities')

The loan is then paid off over the next 5 years? What rate is the loan? Is interest applied during the first 3 years?

BLF I asked something similar a couple of days ago by e-mail. It was late at night and I was promised an answer in a few days time. If REA is ok with it and I get a response first I'll post it on here.

[animal]

BLF I asked something similar a couple of days ago by e-mail. It was late at night and I was promised an answer in a few days time. If REA is ok with it and I get a response first I'll post it on here.

I have posted this couple of paragraphs, as part of a larger post, on another thread but I think they need to be said here as well.

Even with yet another extension to try and add to the sign ups, I cannot see how the amounts pledged so far can finance in any sensible way, the £1,500,000 cost of the shares. Even if SG and Co. accept some kind of cut down or extended version of this scheme it looks so underfinanced that it could collapse under a very little financial strain at some point in the not too distant future.

I suspect most supporters would like to see the new team from Ibrox not take part in the SPL, but the potential financial strain it may create in the balance sheets of all the other SPL clubs cannot be ignored. You may find the CIC / Co op becoming the final victim of the Rangers saga.

[BLF]

BLF I asked something similar a couple of days ago by e-mail. It was late at night and I was promised an answer in a few days time. If REA is ok with it and I get a response first I'll post it on here.

I also asked it another way earlier in the thread. Div/Richard, this is utterly crucial in getting people on board, the business model has to be clear and robust.

[steve_the_saint]

Div, sorry for going over old ground,

£900k due on day 1 = 500k from BII + 225k from 1877 club + 175k from 87 club

Leaving 86k in the pot and 600k to be paid. Is the plan that in the first 3 years the CIC will make £514k? (£270k from subs + £244k from 'other activities')

The loan is then paid off over the next 5 years? What rate is the loan? Is interest applied during the first 3 years?

The loan was confirmed at the meeting to be 8% Apr. Slightly higher rate because its unsecured.

The 500k difference in the first three years is apparently being made through business ventures by the cic (i.e. bar) and any increase in 87 and 77 club members. REA etc have a business plan that everyone involved seems happy with, but he can't go public with it until the deal is done obviously. (this seems to be Sids sticking point).

So its thought that 170k can be made per year by the CIC. I don't know if this is ambitious or not as I don't know the first thing about business, but REA, GLS, the selling consortium, BII, and any other successful business people involved do, and my trust in them is enough.

Also at the meeting, REA said the first meeting after the deal is done can be used to go through the business model with a fine toothcomb but not until then.

[div]

Div, sorry for going over old ground,

£900k due on day 1 = 500k from BII + 225k from 1877 club + 175k from 87 club

Leaving 86k in the pot and 600k to be paid. Is the plan that in the first 3 years the CIC will make £514k? (£270k from subs + £244k from 'other activities')

The loan is then paid off over the next 5 years? What rate is the loan? Is interest applied during the first 3 years?

The way the deal was structured was that an initial lump sum payment of £900k would be made to the selling consortium on completion.

That would consist of the £500k of funding plus £400k coming from the lump sum pots in the 87 club and 1877 club.

The remaining £600k would be paid over 3-5 year period which varies in length due to certain conditions being met within the CIC etc..

It is projected that the money for those £600k repayments would come from the Void, CIC trading and increased member subscriptions in all categories post takeover.

If for example it was repaid over 5 years then you are looking at £10k per month in additional revenue. If you look at the direct debit numbers we are already £3.5k per month over the original target. We may need that surplus to fund a different repayment model of the initial lump sum but I think it proves that it is entirely reasonable to assume we could grow that figure significantly post takeover as we have only 900 members at the moment.

The £500k loan is repayable over 8 years in total at 8% but I believe that repayments on that do not start from day one, there a deferral period before they begin but not sure for how long, I will check this information today and confirm.

At the moment the lump sum first payment is the issue that we are trying to address. We either need to offer less up front and more in monthly payments to make it up, or we offer less in total, or we try and monetise the "extra" money we have coming in via direct debits.

It's all a fine balancing act, and at the end of the day we are in a competitive bidding situation with another bidder. If we go in and offer a lot less than we have originally agreed then here is a good chance it will be rejected, but similarly we can only bid what we can afford to repay with enough headroom to deal with bumps in the road.

The bid team are meeting this morning and again this afternoon to finalise the offer for tomorrow.

Hope the above helps.

[St. Sid]

The loan was confirmed at the meeting to be 8% Apr. Slightly higher rate because its unsecured.

The 500k difference in the first three years is apparently being made through business ventures by the cic (i.e. bar) and any increase in 87 and 77 club members. REA etc have a business plan that everyone involved seems happy with, but he can't go public with it until the deal is done obviously. (this seems to be Sids sticking point).

So its thought that 170k can be made per year by the CIC. I don't know if this is ambitious or not as I don't know the first thing about business, but REA, GLS, the selling consortium, BII, and any other successful business people involved do, and my trust in them is enough.

Also at the meeting, REA said the first meeting after the deal is done can be used to go through the business model with a fine toothcomb but not until then.

steve_the_saint, it should be everyone's sticking point and it is not the only sticking point. The project has been a sales exercise is raising funding. The raising of funding has not been very impressive - other than the fans weighing in. There were originally a number of investors including one that was providing £750,000.00. We are now down to a single investor charging 8% interest with conditions attached that have been glazed over every time the question has been asked. A detailed business plan does not exist - this was admitted at the public meeting where SMiSA asked a few searching questions. Essentially the plan is to raise enough funding to buy a 52% shareholding. The plan appears to be that 10000 Hours / the fans will have to work out how they are going to service the debt after they have secured it. No one I have spoken to has been able to access any detail beyond that. Social entrepeneurship is all about raising funding, it is not about a business plan. You think of an idea and then you chase as much funding as you can get. This is very different from setting up a business - it is about ticking the boxes of the funders. My worry is that the main funders in this are the fans - the fans have seen f"k all business plan, and to date have a draft constitution that is shit.

I'm not saying that it can't work...what I am saying is that fans should have understood what they were committing the club too. Instead we've had the sort of marketing pitch you would get at a multi-level-marketing scam. I was happy to support the raising of interest early on - especially when the model made more sense. There is no way I would push this vague future for St Mirren to my fellow supporters. A hopeful gamble that this might work is not "securing St Mirren for future generations of supporters".

What we appear to have is a mexican stand-off (c'mon Yul - there's an open invitation for you). The consortium want to maximise the value of the sale. We have GLS looking to get a return on his investment in St Mirren. We have REA & Co looking to make this happen with no money other than what they can breenj out of fans. The community element has been reduced to a social enterprise loan company. SO the only answer has been as it always is - fleece the fans as nobody else is willing to fund this. Not the consortium, not GLS, not REA and his group.....they have put it all onto the fans. The fans in return are getting the trems of their involvement dictated to them as huge slices of power are traded away to third parties. We have the consortium and GLS, and potentially other large shareholders able to dip into fans investment whenever they fancy it. We have a social banker dictating who should run the club based on a £500K loan. How can they have more power in setting up the CIC than fans who are far larger investors?

If I take out a loan to buy a car I expect to be driving it from day one. If I take out a mortgage I expect to be living in the house from day one. That is not the deal we are getting for our £1.5M + investment in the club. Instead the people that will make money from the venture are retaining all the power and influence. 10000 Hours are behaving more like venture capitalists when all they are really doing is securing a loan from a social loan company. At no point in this process have fans been properly engaged with the exception of GLS who has negotiated his way into the running of the club through becoming a creditor. "I'll give you a loan for a car, but I get to drive it"...that's a mugging.

The social element of the venture has completely disappeared. It has become a "how can we raise cash" and the only source is now St Mirren fans. Not only are St Mirren fans signing up to a £1.5+ debt - they are also committing to being the consumers of the CIC that will need to raise a further significant sum over and above that as consumers of whatever 10000 Hours can dream up after they get control of the club. Basically the business plan is get fans to pay for a debt and then think of further ways to fleece them at a later point. Essentially ST Mirren supporters will be asked to pay a premium for services delivered by 10000 Hours - whether it is over the odds beer pricing at the members bar or over the odds hospitality costs, and heaven knows what other manner of boggle-brained shite will be dreamt up. St Mirren never offers value to supporters...the pies are a rip off, the strips are a rip off, the hospitality is a rip off, the venue hire is a rip off.......and all of that is dependent on fans paying over the odds because it is for St Mirren.

The £600K shortfall is dealt with by a shrug of the shoulders and then it gets broken down to a monthly amount to make it more palletable. If you take it to be £50K per month profit + consider that there's probably about 300 or so hardcore fans that would buy rubber duck style shite just because its got a St Mirren badge on it each of the 300 hardcore would need to generate around £170 of clear profit to help make up the shortfall of the £600,000.00. That's just me f"king around with some of the numbers we have heard swept away with a one line answer. Those figures may be miles off one way or the other - however we just don't know what the plans are to service the debt. And the bollox about the club assets not being involved in the debt is another nice salesy bollox - however there is still £1.5Million + of debt to be serviced. If it is not serviced then St Mirren will still be very much in the shitter. All the nonsense about the CIC members being able to decide who it is sold to smells of shite as well. That is why we need to see all of the T&Cs for each of the creditors as those T&Cs will be what matters at 10000 Hours have signed up to them on behalf of the CIC members. To my knowledge no standard rank and file supporter - the ones that will fund the CIC in its entirity - have had any visibility of this information...all we've had is salesy bollox to try and get the numbers of direct debit mandates signed up.

So, you're sort of right. This could be the greatest thing to happen to the club or it could be a complete half-baked shambles. I hiope it is the former; however based on current information I will not be twisting anyones arm to sign up just as I won't be twisting anyone's arm not to sign up.

[TsuMirren]

I know there is the possibility of going to a second funder. Whilst it'd be nice to cover the external pitches, would it not be possible to draw down some of the money available from the second funder and then add the possibility of covering the pitches to other streams that we can look to fund after the takeover is complete? How would the excess % above the 100% fund any extra draw down is the question and, again, it'd raise the dog fights of 10000 Hours making decisions without consultation etc. At 140% take up on the direct debits, I do believe the fans have given Richard etc license to get the deal done with the obvious caveat of not using club assets and not crippling the CIC going forward.

[St. Sid]

I know there is the possibility of going to a second funder. Whilst it'd be nice to cover the external pitches, would it not be possible to draw down some of the money available from the second funder and then add the possibility of covering the pitches to other streams that we can look to fund after the takeover is complete? How would the excess % above the 100% fund any extra draw down is the question and, again, it'd raise the dog fights of 10000 Hours making decisions without consultation etc. At 140% take up on the direct debits, I do believe the fans have given Richard etc license to get the deal done with the obvious caveat of not using club assets and not crippling the CIC going forward.

It's out of our hands now. The deal will be done or it won't be done and there is nothing fans can do about it. You either keep paying or you leave the club at risk. The only people that can carry out proper due dilligence now are the consortium and they have a vested interest. The other risk would be the social funder backing out and declining to release the £500K. Any negotiating power the fans may have had has gone.

[Vambo57]

Questions for 10000hrs:

What I am about to ask may become academic very soon (the demise of ExGers), but just in case that does not happen:

We, as CIC members (or at least individual members) have been told by yourself that any vote of a possible newco's entry into the SPL would be taken by our representative, after all the information on possible losses for our football Club had been presented to CIC members and a vote taken at an EGM by them. With the SPL newco vote being taken on 4th July, I have three questions:

1. If our bid is accepted by the Consortium on Thursday, will it be the CIC's representative that will be voting at the SPL meeting on 4th July?

2. If so, will the CIC be calling an EGM of members before 4th July to listen to the info given, debate the matter, then vote.

3. If the CIC does not call an EGM, If we as members want to present the CIC board with some sort of call for an EGM, how many signatures and in what form do you require those signatures? e.g. can it be done online?

Thanks, and hoping for a speedy reply.

Although a bit late now, here is the reply (I did not read it till last night as I was on a training course):

Colin,

It is a whole lot more complicated that what you have even outlined below.

It will all be tied up in all sorts of legal stuff and rules as far as company takeovers and conditions of offer if the offer is accepted but we intend to try and work around all of that so that the Fans/members voice is very much the factor in how the Club votes.

Sorry I cannot give more info right now lets wait and see what happens tomorrow if the offer is not good enough then it will be irrelevant.

If you want to give me a call for a chat about it that would be easier than trying to type out all the various issues i am on ...........

R

[slapsalmon]

What happens with GLS shares now that noone has bought them?

[div]

The 1877 club would remain open until it was fully subscribed.

[St. Sid]

The 1877 club would remain open until it was fully subscribed.

Can you give us a forecast for how many 1877 club memberships are going to taken out in the next 2-3 weeks?

[div]

Can you give us a forecast for how many 1877 club memberships are going to taken out in the next 2-3 weeks?

Doesn't really matter, we have covered the shortfall there by the additional individual direct debits we have received.

We are nett short in the 87 club only, which is why we tabled a reduced offer.

We believe that the 1877 club (and the 87 for that matter) takeup will be slower to take up than we originally envisaged, thems the breaks, sometimes in life we all make mistakes.

Simples !

[Bud the Baker]

Doesn't really matter, we have covered the shortfall there by the additional individual direct debits we have received.

We are nett short in the 87 club only, which is why we tabled a reduced offer.

We believe that the 1877 club (and the 87 for that matter) takeup will be slower to take up than we originally envisaged, thems the breaks, sometimes in life we all make mistakes.

Simples !

What interests me, and I think the others who have asked this question, is whether the CIC is committed to paying GLS & the two other shareholders for shares that will not be needed to fund the takeover. The size of any additional debt the CIC incurs does matter even to fans who are not members of the CIC.