Update From Shareholders Meeting..

This report will attempt to share as much of the information that was shared during this meeting, but it does not reflect any specific views of the Trust Board. This issue is a critical one for the future of Partick Thistle, and the information received and, it has to be acknowledged, the areas where there are questions unable to be answered or still to be raised make this a complex issue where some thought and analysis needs to be applied before confirming our views. The Trust Board will be addressing this in the coming days and will share our views with you once reasoned conclusions have been reached.

Although all of the club directors were present with the exception of Billy Allan, the top table was populated solely by Allan Cowan (who chaired the meeting) along with Tom Hughes and David Beattie. David did acknowledge early on in the meeting that as one of the main investors in PropCo that his main role in the meeting was to speak on that behalf.

Tom started the meeting by giving an overview of the club’s financial history from the Save The Jags campaign to the present day. During that period, we have never been debt-free.

The previous attempts at resolving the debt issue were also covered, including the most recent proposals with Keyhaven which would have resulted in the club occupying a stadium on the other side of the canal. Ultimately, this failed owing to the bank’s unwillingness to accept the final personal guarantees that were required to secure the finance. This happened immediately before the credit crunch hit, and it was supposed that this proposal was an early casualty.

The proposal currently being considered is an attempt to use the value inherent in the ground to get rid of the debt which was stated as being in the region of £1.8M - £1.9.

The ground has recently been valued at £3.6M and the original intention was to seek to raise up to £2M. This does not look likely to be successful.

On that basis, the scenario would be to sell the Main Stand and South end for £1.8 to PropCo with the club retaining 50% ownership.

David Beattie also confirmed that the club was in talks with Glasgow City Council and British Waterways about the overall development of the canal and its surroundings. He stressed that these talks were speculative at the moment, and entirely separate from the current issue.

At this point, questions were taken from the floor, and the following attempts to cover the major points raised;-

• The point was raised about “selling the family jewels” and, in particular, the varied history of clubs who have to continue operating in a situation where they have no tangible assets. In this scenario, where is the security in the long term?
  
  It was pointed out that the bank is effectively in charge of what we are able to do or not do because of the conditions aligned with our debt. If PTFC are unable to service the debt to the satisfaction of the bank, then they would be able to call in the debt at any point. In the current climate, that is not a comfortable place to be.
  
  The full deal would have allowed us to clear the debt and free the club from these strictures. The current proposal will reduce but not remove this – however, it will still be subject to approval from the bank and they will ultimately be the ones to determine how the money raised in this way would be utilised.
  
  It was noted that the football club would still retain ownership of the Jackie Husband Stand, the North Stand and the playing surface. In that sense, the football club would retain the fundamentals to allow them to continue to operate.
  
  The discussion expanded to cover some of the practical aspect of the timing in the property development. As the Main Stand would require to be demolished to meet the objectives of PropCo, then this would mean that facilities at the South End would require to be built as a prerequisite for this to happen. It was also confirm that the facilities that would be built would also take into account the requirements of the Glasgow Warriors, ie 22 places instead of 17.
  
  It was confirmed that at this stage there are no detailed costings on this first stage of development, but that discussions had taken place with the Head Of Planning at Glasgow City Council and with the Deputy Lord Provost. However, it was hoped that this would be in place within 2 years
  
  
• The impact of the proposed deal on the level of debt and also on our trading position was raised.
  
  It was confirmed that this deal would make £900,000 available to the football club which would be intended to reduce our debt with the bank (although, as noted earlier, still subject to their approval).
  
  It would assist the trading position by £60K-£70K per annum. (If the full deal had gone through, this would have been improved by c£200K per annum given that there would be no residual debt-servicing or capital repayments.)
  
  It was acknowledged that this would, in itself, not allow the club to operate at a break-even level.
  
  It was asked if the £900K being sought was in place, and David Beattie confirmed that this was the case. The four investors are David Beattie, Billy Allan, Alan Lobban and Gavin Stewart.
  
  
• Questions were asked about the 5% per annum priority return being granted to the investors. This would be paid only once development occurred and would be a first charge of any profits. In other words, this would be paid to the investors before any excess proceeds were shared amongst the shareholders (from which the football club would receive 50% of this net amount)
  
  
• Information was sought on whether there were professional advisors involved in this project and, if so, who they were. It was confirmed that there were and the names of the firms were shared – this covered architects, lawyers, accountants, and chartered surveyors. It was stated that all of these people are working on a pro-bono basis until the development deal is put in place, and all are Thistle supporters.
  
  
• Given that there will be directors with a shared interest in both the football club and PropCo, the matter of how conflicts of interest would be dealt with was discussed. Out of this discussion, it was confirmed that the PropCo board would have five members – the Club would have one place with the other major investors occupying the other four. The net result of this is that although the football club would have 50% of the equity, they would have 20% of the voting rights.
  
  In this situation, the security of the club is reliant on the fact that all the investors are “Thistle-minded” as otherwise there seems little to stop a change in the situation in all or any of the other four voters having the potential to put the club in potential jeopardy. The question was asked in converse that if these investors are so Thistle-minded, why should they object to improved protection for the future of the football club?
  
  At this point, Gavin Stewart who is one of the major investors in PropCo added some comments. He did suggest that this was not the best investment he’d ever make and was, in his view, already weighted in favour of the club. He was firmly of the view that this was a deal that would lower the club’s profile with the bank and would offer it a chance for a future that might not otherwise be present. He was also of the view that the voting structure as outlined was entirely appropriate for what was being established.
  
  It was asked if the club had considered making the deal a harder one with appropriate protection for the football club but allowing the net to be spread wider in the investment community. The club’s view was that such investors are not out there at the moment.
  
  Of the responses received from the advert in the FT, only one group was really interested in pursuing something but the board felt that this was inconsistent with their aims as it was solely driven by property development.
  
  
• David was asked for an assurance that any development work would be professionally project managed with the Project Manager owing a duty of care to both Partick Thistle FC Limited and Propco. He gave this assurance, and noted that this would be a prerequisite given the potential involvement with Glasgow City Council on the wider planning brief.
  
  
• It was noted that the JagsTrust had sought a private meeting on this matter following the Annual General Meeting and several times since then. David Beattie said that it would not have been appropriate to have a meeting as for much of this time, there was nothing firm to discuss. However, provided that there were clear objectives and outcomes to arise from such a meeting he would now be glad to do so.
  
  
• It was also noted that should there be additional investment received that that the percentages owed by all parties would be diluted. In other words, if we received more than £1.8M the additional monies would mean that the club’s shareholding would reduce below 50% dependant on the amount and the club would receive 50% of the investment capital injected.
  
  
• It was also confirmed that income from the Glasgow Warriors would remain with the football club
  
  
• The available time for consideration of other alternatives was requested from the board – any such alternative plans would need to be within the next two weeks.