Chairman David Sutherland has responded by letter to all shareholders with his, and the board's feelings on the contents of Dougie McGilvray's letter. As promised, we have been provided with this response so you can make up your own mind.
In response to former Chairman, Dougie MgGilvray's letter to all shareholders, current Chairman David Sutherland has issued the following letter to all shareholders in response.
26th February 2001
You will by now have received in the post a letter from Dougie McGillvray, the former Chairman of the Club, on the restructure plan which seeks to rescue Inverness Thistle & Caledonian FC Plc from financial oblivion.
Could I say at the outset that during the year of the current Board stewardship, three issues of note should be borne in mind:
(1) The plan to remove the Club's debt by transferring the Stadium to a Trust has been well rehearsed and indeed presented to shareholders, as a body, in the course of the last calendar year. I took from these presentations the support obviously indicated from the floor.
(2) The reason we moved on the Trust route was in response to the rejection of the original rescue plan strongly opposed by Mr McGillvray.
(3) Our current model, and I've made no bones about this, has been based on the actions of clubs similar to ours who have found themselves in the First Division with a debt mountain to climb. The club in question, Dunfermline Athletic FC, have now moved out of the First Division into the Premier Division and, apart from last weekend's result, are doing rather nicely and therefore are an excellent role model for us.
I have no problem with somebody constructively asking questions as this is what stewardship is all about and I am pleased that under the new Board's stewardship we have stabilised the team who are doing rather well in the League at present.
Whilst the current Board have provided the platform for progress over the last 12 months, it is you, the shareholders and supporters, who have encouraged the team to move onwards and upwards.
I know Steve Paterson and his players greatly appreciate the support of the current Board and the support which is undoubted from the shareholder and fan base.
Turning to our financial plight, there are now plenty examples around of clubs who have hit brick walls. Under the previous administration of the Club, we were on the brink of administrative Receivership akin to Airdrie, and my earlier comments are repeated in that the move and organised rejection of the rescue plan forced us to think of another way to avoid disaster. Anybody who tells you as shareholders differently is simply not facing reality and I have told you, as shareholders, on every occasion we have met over the past 12 months the truth and the facts.
Could I say at this juncture that a significant amount of work has been injected into the equation by your current Board and advisers and as this process moved on we enjoyed the support of the Bank of Scotland and our creditors.
The current plan was clearly outlined in our Pathfinder document "The Road To Premier League Football" and we then followed on with the Prospectus issued early this year.
In terms of the general questions, I'd like to use the forum of the EGM to be held on Thursday next, March 1st, as a platform to answer these questions but for avoidance of doubt:
The Stadium moves to the Trust/Propco.
The Trust/Propco will also take over the current Plc debt of over £2.1m (and rising) and will leave the Plc approximately £400,000 cash positive.
The rent will be modest.
The Trust finds development opportunities and raises money to execute these development opportunities once planning has been secured.
As well as providing development opportunities the Trust would then have the resource behind it to build new stands to meet the criteria of other leagues - fundamental to our future strategy.
Once the Trust earns surpluses, these would be distributed in a tax efficient manner which will be explained at our EGM.
In the interim, and no secret has been made of this, the Club has to balance its books between gates and associated income and, despite negative comments, the conferencing income has increased and we are endeavouring all the time to increase our exposure to income generating sources which will cross subsidise football.
All the shareholders and other investors have the option of investing either in the new property company or the existing Plc but because of the risk of a speculative investment in the property company, this is being targeted at obtaining larger investment sums from a smaller number of investors who are prepared to tie up their capital in the property company on a longer term speculative basis.
Those investors who invest in the existing Plc will be investing in the Football Club in order to provide funds to strengthen the playing side and assist in providing additional spectator facilities.
The Football Club will continue to have control of the Stadium which it will hold on a sub lease from the property company for as long as the term of the current Head lease which is over 90 years and, although the property company will effectively own the Stadium, the Football Club will continue to enjoy the use of the Stadium without the burden of its current accompanying debt.
Contrary to what is stated in Mr McGillvary's letter in transferring its debt to the property company, the plc is effectively getting rid of its debt long term indicated above and will no longer have liability for this.
As a result of this exercise, the effect on value is neutral within the Plc on the basis that the restructuring will eliminate the debt and the asset but we replace this with positive cash.
However, the objectives of the Club have been well rehearsed to you as shareholders and the escalating debt we inherited in December 1999 needs to be eliminated to give us any chance at all.
As Mr McGillvray states in his closing remarks of his letter, should any shareholder have a better plan for £2.6m of cash injection to remove the debt burden and leave us with headroom - fine - let them come ahead and do so on the basis that they would have the current Board's support. As part of our inheritance we marshalled out a catalogue of errors from the past and whilst we haven't got it right yet, we have within the current plan a method of achieving stability and a future. Let me say, for avoidance of doubt, that we have given opportunities to present alternative plans at every juncture of evaluation of our route to achieve the current proposals in front of you as shareholders in this Football Club.
Whilst not an agenda matter at the Plc EGM, your company's Board of Directors do consider that the purpose of the Inverness Caledonian Thistle Members' Club in assisting with the formation of Inverness Caledonian Thistle FC has now been substantially fulfilled and that the members of the Members Club now hold a disproportionate voting strength to the potential disadvantage of additional investment by new and existing shareholders in the plc.
The more additional investment which comes into plc under the current share issue the more difficult it will be for a single person or group to take control of the Football Club, which is the current Board strategy. We are a community family orientated Club and intend to remain so!
Additionally, we have encouraged the Members Club to think positively in terms of how their shares might be placed, e.g. with the Supporters Club, the Trust or indeed to act as the catalyst for the formation of a Supporters Trust which is in line with Government policy.
Please do come along to our EGM procedure on Thursday next, i.e. 1st March, and I regret that the correspondence flow deflects concentration and support from the team's current run in the Scottish Cup and the replay at Kilmarnock on Wednesday evening.
Could I urge you not to be deflected by this, keep on track, come and support the team on Wednesday evening and come and listen to your Board's proposals on Thursday evening.
The letter was also signed by the following officials/staff at the stadium
Steve Paterson, Ken Thomson, Graeme Bennett, Ian Macdonald, Ken Mackie, Sandy Catto, Catriona Bissett, Gary Thompson