I'd reckon the Council would have to be confident they could back up their decision as if it was done anything else than commercially they risk prosecution for corruption, misuse of public funds, etc., not to mention of being taken to task when the books are audited. It's not like a bank, who can take whatever risks they want and the more they do the bank's bollox in, the bigger the bonuses.

Perhaps they have Blake Solly seconded to the credit committee to help them assess financial risk?

Does anyone else remember Gerry Sutcliffe saying back in the day they'd turn to Bradford Council for a start-up loan? I just assumed this was it. I didn't read anywhere in the article when the loan was issued, so it could be 6-months old.

He and various others, including Gargoyle and the Dark Lord (or his acolytes), all made reference to council funding being available IIRC? I recall much larger numbers being bandied around, to be honest. Don't think any details were ever given, but (rightl;y or wrongly) I'd always assumed they'd had some initial loan support.

Not sure when the loan was issued, but it does not look to be secured on the assets. The club has just given a first floating charge to Barclays Bank though, so that will rank first in line anyway (at least once the charge given as security for the purchase of the business has been satisfied).

i need the help of an old sage like relic/fa or adeybull, with business knowledge

is this similar to emperors new clothes.

you get a soft loan from the council £200k then buy a rugby club from administrator for £150k, you then own this and decide to issue yourself shares. you then ask loyal fans to then invest in the club by buying shares (are those voting shares or just shares with no rights) the income received then pays off the soft loan and you still own the whole thing without spending anything.
is this how business works, your opinion would be appreciated.

Will all depend on whether any shares issued are new shares introducing new capital, or Omar selling off any of his existing holding.

If the former, then replacing debt with equity makes total sense - IF the new shares rank pari passu with the existing shares. If they do not, then the risk is you effectively replace one form of debt with another.

If the latter, then your analysis would be broadly correct if it was only a small % of the shares being sold off. In OK's case, I would never sell > 24.99%, since that means I could no longer guarantee to win on a special resolution.

I have assumed that any loans form the council will be on terms that make it sensible to retain the loans rather than repay them and replace them with alternative funding. A question for the next fans forum, I guess?

I await with interest the details of this proposed share issue. And, especially, how it avoids being classified as a public offer of equity which would require plc status and a prospectus.

You would be surprised what you can buy without actually having any "money" and similarly people wouls be very shocked if they all went to the bank at the same time to take their "money" out. That is the wonder of the banking system that it works because people have trust in money that isn't really there. A bit of a diversion but your are right with the scenario you discribe if you can get a credit line youu don't need to actually put any £ of your own in. It was always thought that Al Fayad bought Harrods for £500m when he didn't have a dime.

i am obviously in the wrong line of work, which probably accounts for the fact i have no money.

The devil will be in the detailed wording, but you'd have to assume it would be based on invoking the 'common interest' rule which would enable such an issue to go ahead.

You would presume so, although the wording - and the eligibility - would need to be very carefully drafted, I think?

However, OK's wording (as quoted, anyway) is pretty ambiguousthe T&A reportrl it seems clear he is intending to retain control. The wording reads to me like he is not seeking to raise capital for the club, but instead to sell some of his own holding, but without more detail we can only speculate.

'Former Sports Minister Gerry Sutcliffe, honorary chairman of Mr Khan’s OK Bulls Ltd, said the club would be valued before shares were made available and the move would bring in investment'.

Then thiis suggests they are raising capital for the club but agreed it's not very clear.

Indeed its not. Because the wording could mean, e.g.:

a - we value the club, to put a price on new shares in the company, so we can then offer out those shares to bring in new capital; or, just as easily:

b - we value the club, as a basis for bringing in investment from other businesses or high-net-worth individuals, where we will need to calculate how much % of the club say a £100k investment will buy you; and at the same time so OK can determine how many of his own shares he can sell to supporters whilst still retaining a majority holding.

- or any one of a range of other possible interpretations.

To me, the wording could be quite deliberate: shares will be "made available", not "issued". "The move would bring in investment", not "the issue of those shares will bring more capital into the club". But, who knows? How much is lost in the translation from utterer via hack to page? How much was said just as general, informal comments in layman's speak, to try and be helpful, rather than said with a specific objective in mind?

But now the genie is out of the bottle, I do think we need a few more specifics to avoid excessive - and quite possibly wilde-of-the-mark - speculation?

As with anything like this it's hard to know what is going on when the press reports can get easily confused. I hope the T&A send a hack with some knowledge about this sort of thing (if such a person exists at Hall Ings).