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Cashing In? Reduction In Share Captial


Gemmel
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http://fansonline.net/portsmouth/mb/view.php?id=506828

 

 

http://www.companiesintheuk.co.uk/ltd/southampton-football-club

 

Now I can't see anything there on the Companies House bit (I didn't buy the reports) Where it states that money has or is actually being taken out, although the author of the above link seems to think that is the case - Am I missing something?

 

Regardless, there has been some (What appears to be unusual) activity in July, with a solvency statement and a reduction of share capital. From what I can read both of these things can be for multiple reasons;

 

http://www.legalclarity.co.uk/why-reduce-share-capital.htm

 

http://simply-docs.co.uk/Share_Capital_Reduction/Solvency_Statement_-_Share_Capital_Reduction

 

I never bought into the Liebherr / Cortese meeting at the end of the season, being a "Love- In" that gave Cortese the green light to run the business by himself with an open cheque book.

 

As per another thread, it seems the charge from last year is still in place.

 

These things aren't necessarily bad things, but worth keeping an eye on and any resident experts that could shed any light or more information would be much appreciated.

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As you said, there are a number of reasons why you might do this.

 

Reducing the share capital creates an accounting surplus. We might want to do that for some reason or other. It could be related to creating a surplus for a dividend. It could be something to do with the Financial Fair Play rules. It might just be something to do with freeing up some capital for some other Liebherr company. It could be something to do with the inter-company arrangements in the group; it could be to improve coverage ratios for a loan; it could be that, for some reason or other, it is a good time for one of Markus' benficiaries to free up a little cash... we don't know and unless someone on the inside spills the beans or something dramatic happens we probably never will.

 

It might be a "bad" thing. It might be a "good" thing. It might be an innocuous thing.

 

If the meetings between the Liebherrs and Cortese had gone badly, as far as Cortese is concerned, I suspect he would've actually walked so, whatever it is, I reckon NC probably does not see it as a bad thing.

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Recent filings to CH

 

Special Resolution - Extract

 

“I, the undersigned, being a director of the Company hereby certify that the subjoined special resolution in writing has been passed as a special resolution by the single shareholder having the right to attend and vote at general meetings of the Company:

Special Resolution

THAT the Company's capital be reduced by the transfer of £25,988,244 standing to the credit of the Share Premium Account to Profit and Loss account.”

 

Statement of capital – Ltd company as to file these every year. Has to file an additional one if there has been a reduction in share cap.

Statement of solvency – this states that the directors are of the opinion that the company will be able to pay all of its future debts.

Directors statement – this just states that the special resolution has been conducted inline with laws and regs.

 

The next question is why would a company want to decrease its share cap :

 

It could be to write-off a accumulated losses on its profit and loss account, so that dividends can be paid much earlier. (Unlikely)

OR - clean up its balance sheet so as to reflect more accurately the capital employed in the business, where capital has been lost.

OR - repay to shareholders part of its paid-up capital where the capital is surplus to foreseeable requirements.

 

Make of that what you will!

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Is it genuine? The one on the Ugly Inside has 'Southampton' misspelled and one poster has cried fake already?

 

Oh nearly forgot...look at me, look at me, apparently.

 

well seemingly so because it's all registered at Companies House. No-one has any detail though or is keeping extremely quiet about the amounts involved. However all of these statements refer to Southampton FC Ltd, don't know what's happening with the parent company DMSWL 613.

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Who's gonna pay £15 to look at the docs then? Where's Guided Missile when you need him.....

The transfer of capital that occured is from the share premium account and represents the "premium" that was paid for the shares over their par value, by the Liebherrs. Why did they do it? My guess, not being a corporate accountant but just thinking about their situation, is that it shifts the overvalue into distributable reserves, e.g. retained profits, so that they can take dividends out of the company when we have the cash, OR the reduction in value of their shares provides some form of tax relief for the Liebherrs.

 

My guess, but I am sure we have an accountant on this board that knows more than me....

 

Um Pahars, where are you????

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I think if you knew the contents of recent documents posted by DMWSL 613 at Companies House the situation would become clearer. There's "Authorised Allocation of Share Capital and Debentures" dating from March of this year and a document concerning capital from the 8th of July. No point me looking at them they'd be mumbo jumbo to me but I don't doubt that the answer lies there within.

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http://fansonline.net/portsmouth/mb/view.php?id=506828

 

Blimey - they really want us to go up ****e creek without a paddle just like them don't they! They can't convince themselves enough that the Liebherrs are 'dodgy owners' just like the succession of them they had down there at Nottarf Krap!

 

But they seem just as intent to ignore the big differences between the two clubs - we have a great academy producing young players for the first team, we have a fantastic training ground, a modern 32,500 seater stadium owned outright by the club and a fanbase capable of filling that stadium for more than just the big games.

 

So we'll never be as up ****e creek as they are now!

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The transfer of capital that occured is from the share premium account and represents the "premium" that was paid for the shares over their par value, by the Liebherrs. Why did they do it? My guess, not being a corporate accountant but just thinking about their situation, is that it shifts the overvalue into distributable reserves, e.g. retained profits, so that they can take dividends out of the company when we have the cash, OR the reduction in value of their shares provides some form of tax relief for the Liebherrs.

 

My guess, but I am sure we have an accountant on this board that knows more than me....

 

Um Pahars, where are you????

 

No one knows the reason except for the family but what you've said is 100% true, the capital shifted can now be distributed as a dividend. The value of the share is irrelevant until the Liebherr's decided to sell and would then be subject to CGT (as a capital asset.) Reducing the share premium account would not effect the value of the shares anyway it is just a release of a non distributable reserve to a distributable one. I do concede GM though that I have no idea what tax jurisdiction the Liebherr's operate under so there could be an additional tax effect that I'm ignorant of?

Edited by farawaysaint
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Assuming, for want of information to the contrary, the Liebherrs are based in Switzerland for tax purposes, they'll be sufficiently big hitters to negotiate their tax regime with the canton (district) they register in. This would be a bespoke arrangement and likely invisible to outsiders.

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e anThink given that so far we dont really have a scooby about what all this could or could not mean, until we have someone with corporate accounting skills tell us in laymans terms... hopefully it wont see a fall into wonton speculation like the inbreds down the road seem to be orgasmically enjoying in typical misinformed manner.

 

It could be perfectly normal, useful, or bad... but until we know any different, cant really comment. Having said that, I dont think we should ignore it - we have quite rightly criticised those that worship at that cowshed for choosing to ignore any hint of goings on that did not involve spending wildly on mercenary internationals.

 

Would be interesting to get perspectives of those who DO know what this all means and the options that it presents, even if we do not know the details.

 

Just wondering (and pure speculation), whether part of the agreement reached between NC and the Liebherrs was that they would at some point get back what has been put in so far, and that then NC would be able to run as he sees fit etc.... but as said, wild speculation

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What?

 

The poster mis read something on the Pompey site. The times posted Pompey were in debt by £130m but the poster thought it meant saints were reported to be £130m in debt.

 

Tbf the forum post linked above is difficult to follow who is who

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Interesting point against the holding company that states

 

 

Mortgage: Number of charges: ( 0 outstanding / 0 satisfied / 0 part satisfied )

Last Members List: 03/07/2013

 

Yet Southampton football club limited shows

 

Mortgage: Number of charges: 29 ( 1 outstanding / 28 satisfied / 0 part satisfied )

Last Members List: 21/09/2012

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There's absolutely nothing in any of those documents that says that any money is going anywhere.

 

Share capital and the share premium account together represent the amount paid by shareholders for the shares.

 

These funds can not be distributed back to shareholders.

 

The profit and loss account, as the name suggests, is the total of all historic profits and losses - which are available for distribution to shareholders.

 

As somebody has said already, the documents are transferring money from reserves which can't be taken out to those which can.

 

That's it.

 

All this does is make it easier for the owner of the shares to take money out in the future.

 

They could be intending to take money out tomorrow, they could be takin steps now just so that they have the option at a later date - who knows.

 

That said, I am sure that there is debt owed to the shareholders over and above the equity. If they wanted to take money out tomorrow then repayment of the debt would be the easiest (and probably most tax efficient - although I'm not a tax specialisy) method.

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Is it possible that the premium promised to Aviva when we reached the premier was funded by the reported loan charged against the assets and that the share capital transfer to the profit and loss account was to pay that off?

 

The loan charged against the assets, was (According to the Swiss Rambler) 3 million and the premium that Aviva were due was 4 million - So not a million miles away, but the transfer to the profit and loss account seems to be 26 million, so not sure that would reason.

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No one knows the reason except for the family but what you've said is 100% true, the capital shifted can now be distributed as a dividend. The value of the share is irrelevant until the Liebherr's decided to sell and would then be subject to CGT (as a capital asset.) Reducing the share premium account would not effect the value of the shares anyway it is just a release of a non distributable reserve to a distributable one. I do concede GM though that I have no idea what tax jurisdiction the Liebherr's operate under so there could be an additional tax effect that I'm ignorant of?

The distribution out of reserves from capital contributions (cash and stock) is free of Swiss withholding tax and will not be subject to income tax for Swiss resident individuals holding the shares as a private investment.

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The loan charged against the assets, was (According to the Swiss Rambler) 3 million and the premium that Aviva were due was 4 million - So not a million miles away, but the transfer to the profit and loss account seems to be 26 million, so not sure that would reason.

 

Perhaps it's because we need around 25m cash up front to sign some star striker?

 

Just as likely, imo.

 

(or wishful thinking, at least)

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http://www.moneyhouse.ch/en/u/mali_motan_ag_CH-217.3.532.363-7.htm?eid=2661786

 

I am reading this as Cortese no longer an Executive Director or MALI AG - This seems to have happened at the same time as the changes detailed on this thread - Am I reading it wrong.

Not sure that particular change is relevant. The company on there appears to be in the process of being dissolved, so removing directors from the register is probably just a natural consequence of that.

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Not sure that particular change is relevant. The company on there appears to be in the process of being dissolved, so removing directors from the register is probably just a natural consequence of that.

 

That's what it looked like in 2012 - But doesn't seem they ever were.

 

Anyway this is the main company and he seems to have gone from there as well

 

http://www.moneyhouse.ch/en/u/mali_international_ag_CH-217.3.541.516-4.htm?eid=2657840

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That's what it looked like in 2012 - But doesn't seem they ever were.

 

Anyway this is the main company and he seems to have gone from there as well

 

http://www.moneyhouse.ch/en/u/mali_international_ag_CH-217.3.541.516-4.htm?eid=2657840

 

That's also a subsidiary company. The main one is Mali Holding AG.

 

http://www.mali-group.com/

 

I wonder if they are winding the whole thing up? Can't see anything on google which oyu would think there would be if people were being made redundant, etc.

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That's also a subsidiary company. The main one is Mali Holding AG.

 

http://www.mali-group.com/

 

I wonder if they are winding the whole thing up? Can't see anything on google which oyu would think there would be if people were being made redundant, etc.

 

 

http://www.moneyhouse.ch/en/u/mali_holding_ag_CH-217.0.137.768-0.htm

 

 

That's just an investment arm. The main company of Marcus was the engine (I Think) Mfrs, which appears to be in the process of, or has been already liquidated.... Unless I am reading it completely the wrong way, of which there is every chance.

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That's also a subsidiary company. The main one is Mali Holding AG.

 

http://www.mali-group.com/

 

I wonder if they are winding the whole thing up? Can't see anything on google which oyu would think there would be if people were being made redundant, etc.

 

Anyone know how many people were employed by Mali? On the surface you'd have thought it was a pretty large company but, as you say, there seems precious little information on the Internet about the demise of a supposedly significant company. Maybe it was never really a 'proper' engineering company in the first place...? Potentially seems a bit odd...

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I'm sure there was an article a while ago which said Mali was entirely reliant on Markus for creative direction. There was a bit of a void given his passing and no obvious replacement so it was going to be wound up. You would think someone would want to buy it but perhaps it wasn't particularly profitable business; maybe it was another pet project as much as anything

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