There have been two significant announcements in the last week or so of major impact on Cardiff City Football Club. Here are the thoughts of Trust Chair Keith Morgan on those announcements.
The letter to shareholders advising of a meeting to approve the issue of 1.2 billion new shares is the next, and important step in the pledge by Tan Sri Vincent Tan to convert his debt into equity and greatly reduce the club`s liabilities. In February of this year he stated he would ”immediately” be converting £68m of the £108m then owed to him into shares, with the balance of £40m owed to be written off over 5 years at £8m a year. However, two factors have delayed the first, larger debt conversion.
- There were not enough shares in issue to allow the conversion of such a large sum
- The club`s board stated that the conversion required Malaysian Central Bank authority
The imminent increase in shares overcomes the first barrier referred to above. It is understood that the second barrier continues to be worked on but has not yet been overcome.
The second announcement was the resignation of Michael Filiou from the Cardiff City Football Club board (he never has been a director of Cardiff City Football Club Holdings board which is the decision making owner of the football club). This represents the end of a long-running dispute between the club and previous owner Sam Hammam for whom Mr Filiou acted as the “eyes and ears” and reporting source for Mr Hammam for the last three years. It follows the settlement of the liability due to Mr Hammam under which he had the right to appoint a board member.
Both of the above announcements are a positive step forward for the club.
The Trust will continue to monitor progress with actual debt conversion and write off and report back to its members accordingly. Once actually done, it will be a huge financial boost for the club.