QPR1st representatives met with the three board members who have proposed the latest initiative to take the club out of administation on Easter Monday Nick Blackburn, David Davies and Ross Jones were open and frank on many issues, but they were also adamant that some had to remain private because of commercial confidentiality. The three gave QPR1st an hour’s meeting, just prior to the Notts County game.
The essence of what they are doing is to arrange for Loftus Road plc to borrow the money needed to pay off half of Chris Wright’s debt, along with all other creditors. Chris Wright is writing off the rest of what he is owed, which QPR1st understands to be roughly £3.35m. This would be sufficient to take the club out of administration.
The loan is being arranged through a source about which the three refused to comment, beyond confirming that the lender is both an individual and a corporate entity. They went to great lengths to insist that the lender is not a threat to the future of QPR. Jones told us, “the person we are borrowing from is of no danger to the football club”, whilst David Davies went on to refute rumouirs that it is Ron Noades, saying, “it is not Ron Noades. Or an agent of Ron Noades. Or even a facsimile of Ron Noades”.
The amount being borrowed is equivalent to about two-thirds of the value of Loftus Road stadium, somewhere in the range £8-12m. The three say that they have already ring-fenced cash to meet interest payments for at least the next three years, indicating that the cash coming from the Fulham ground-share, along with anticipated season ticket revenues will achieve that. When pressed, they insisted that the deal was at a reasonable rate of interest.
The board have managed to secure this money with no apparent additional payback other than a reasonable rate of interest. Our highly experienced financial advisors assure us, it is usually the case that a lender will either have a vested interest in the business itself or want to take a stake in the business or charge a higher than usual rate of interest.
The corporate structure of the business will also change, although the three appeared undecided as to exactly how. Chris Wright retains a 20% holding, approaching 5% is set to be allocated to Nick Blackburn. There is a 28% block of unallocated shares which will be allocated to potential future investors. The three confirmed that they are in talks with the Wintons and Maurice Fitzgerald, but also say that they have others interested. QPR1st asked if there would be supporter representation on the board and was told that there would be, although how many places was not revealed.
QPR1st would like to reassure members that no individual would accede to any QPR-associated board (it is not clear if there will be one or two) without holding an election amongst its members. Meanwhile, it is consulting with Supporters Direct to see what options are open for this sort of position.
There will be no extraordinary general meeting, because what is being arranged is a loan, not a change of ownership. When the club comes out of administration, it will do so via an application by the administrator to the High Court. There will, however, be an annual general meeting fairly shortly after the company comes out of admin.
QPR1st asked about an apparent conflict of interest, between Weareqpr plc financing players on the club’s behalf and taking part in the club’s ownership. We were told that all decisions about players, whether buying or selling, playing or not, are Ian Holloway’s alone. WAQ alone takes all of the risk associated with buying/financing any one player.
The three’s initiative looks as though it will go through within a very short time. David Davies spoke of having the legal documents upstairs on his desk and Ross Jones of fast-tracking the lawyers to push the deal through.
We also raised the issue of Twyford Avenue training ground. Chris Wrights’ public commitment to covenant a percentage of any future sell-on to QPR at last years’ EGM. We have written to Chris Wright separately to ask him to clarify beyond doubt the position on Twyford Avenue.
For QPR1st, the main issue is to decide what to do next. Although there are questions still awaiting answers – the identity and motives of the mystery lender, the exact detail of the loan and the specifics in the business plan to pay it back over more than just the immediate years
we are fairly convinced that we have got as much information out of the three as we are going to get.
QPR 1st are not therefore in a position to properly evaluate the proposal. We have recently secured a mandate from our members to offer confidentiality to any bidder. We hereby offer the board that confidentiality so that they can feel free to fill in the critical gaps in their proposal.
As usual, on issues of such magnitude, we will be balloting members for their feelings for the new arrangement on the basis of what is currently public. Should we secure the critical missing information, that will allow us to give much firmer guidance to our members in any such vote. As ever, there appear to be more questions than answers.