There Are Issues With The Shares That Can’t Easily Be Untangled.
The trouble with Sevco shares has been explored extensively here and elsewhere, so I won’t bore you by going into mega-detail on the subject, but their problems come down to three things.
First, how will existing shareholders, owed money by the club already, and who have the option of converting that to shares, benefit from a share issue unless it’s their shares being offered in it? And if they do that, how then does the club make money?
Secondly, why would these current shareholders want to buy more? If some of them take on more shares they put themselves in danger of Takeover Panel scrutiny and being forced to make the same offer which Dodgy Dave King is presently sweating over.
The position some of them are already in seems difficult enough. A debt-to-equity swap makes it worse.
Third and finally, when you consider the debt for equity deal, the likely cost of shares and that most of those on offer will be worthless in terms of voting power, who is going to buy them? Fans? The last share issue relied on institutional money.
In fact, numerous share issues at Ibrox have ended up being subsidised by directors and owners … and this, we know, is impossible this time around.
And as for “institutional investors” … Jesus wept.
No chance at all.