Chesterfied brothers set to increase stake in Spireites again
A £1.6m equity investment by Phil and Ashley Kirk is expected to be approved at a meeting on Friday, October 20.
Because the investment has already got the backing of the community trust and the board, the brothers have advanced 50 per cent of the funds.
Once it has been rubber-stamped, Phil and Ashley will own around 40 per cent of the club, while the trust will own about 50 per cent the fans just under five per cent.
Just under £980,000 of the £1.6m will be invested in exchange for new ‘A ordinary shares’ and just over £620,000 will be for’ non-voting preference shares’ held by Phil which will accrue interest at five per cent.
The club said that although attendances have been ‘fantastic’ and that they will be ‘close’ to breaking even this season, it is ‘still burning cash’ and the accounts will show a loss for the last financial year.
They also said they are ‘aggrieved’ to make less than £100,000 in profit from the play-off final at Wembley.
Explaining the reasons behind the investment, the club said in a statement that it had gone into buying new players, paying some players off, repaying the council loans which the trust used to buy the club from Dave Allen and the loan to Sport England which was secured during the pandemic.
The club said in a statement: “Firstly, the club is currently undergoing a reorganisation and is working hard to match cash income to outgoings. Rationalising and rebuilding any squad costs money and the club has worked hard to attract the calibre of player that should help us achieve the goal of promotion. In addition, significant cash has been spent on players who are not part of our plans and have permanently left the club. Fortunately this will reduce the long-term cost but does result in a short-term cash drain.
“Secondly, we had also hoped to defer payment of principal loan money due to the two councils but given the difficult circumstances both councils face, that is not now possible. The club remains liable for those two loans that were used by the trust to rescue the club, along with the additional loan from Sport England. The repayment of these amounts is not immaterial.
“Lastly and with tangible results already, the brothers’ investment commitment has enabled the club to begin the development of the Erwin training ground. Whilst the team are already seeing the benefits of this, we hope with further sponsorship this will tremendously help the squad in this season and many more.”
Not requiring shareholder approval, Phil will also lend the club a further £166,000 to enable an immediate repayment of £206,000 to Sport England. The £40,000 balance of this repayment will be out of working capital.
The club’s statement added: “Phil’s loan will effectively replace £166,000 of the Sport England loan and be repaid to Phil in two equal instalments in June 2024 and 2025. Both loans carry an interest rate of two per cent.”
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