Finance update (2 Viewers)

[CrawleySkyBlue]

Latest filing (today) on Companies House shows that the £15m equity put into the club in May-25 was from RCMA GROUP PTE LTD. This is a company within the wider RCMA Group of companies, for which Doug King is an owner.

 

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[Kingokings204]

Was this in view to the stadium purchase?

 

[CrawleySkyBlue]

This was prior to the stadium purchase. Albeit and the likelihood is that it was involved in the wider financing ahead of the stadium purchase.

The Club would have been discussing/negotiating the stadium purchase with Frasers for a while you'd have thought. Could be that the club needed to show proof of funds and this formed part of that. It could also be that some of the £15m was used to fund other operations of the club, as well as used to part fund the stadium acquisition. We know there is the charge over the stadium, so there is clearly some debt involved somewhere too.

Interesting that the cash has been put in from RCMA in the form of equity, rather than from Doug himself. Previous investment into the club was in the form of the £30m interest free loan from Doug King.

 

[clint van damme]

Interesting that the cash has been put in from RCMA in the form of equity, rather than from Doug himself. Previous investment into the club was in the form of the £30m interest free loan from Doug King.

In your opinion, what is the significance of this?

 

[Gynnsthetonic]

A bit about RCMA Group

About Us – RCMA Capital LLP

share.google

 

[JimmyHillsbeard]

Hedge Funds owners are back then?

 

[bigfatronssba]

Hedge Funds owners are back then?

Just looks like part of Doug's agriculture business

 

[Briles]

In your opinion, what is the significance of this?

Could be that Equity capital is considered "secure funding," which allows clubs more headroom to report losses. Which would make sense given that dougs said we are still a loss making club

 

[clint van damme]

Could be that Equity capital is considered "secure funding," which allows clubs more headroom to report losses. Which would make sense given that dougs said we are still a loss making club

Thanks for trying to explain, don't really understand it but that's my problem!

 

[Briles]

Thanks for trying to explain, don't really understand it but that's my problem!

I dont either really somebody will have a better answer im sure

 

[Captain Dart]

Could be that Equity capital is considered "secure funding," which allows clubs more headroom to report losses. Which would make sense given that dougs said we are still a loss making club

Isn't every club in the Championship loss making?

 

[shmmeee]

Are Wrexham?

 

[CrawleySkyBlue]

In your opinion, what is the significance of this?

Still thinking about this. Ultimately I think it is a positive thing for the club as long as DK’s intentions remain in line with ours (the fans), which I have no reason to doubt or question.

Better for the club’s cash flow (no interest repayments - albeit the loan he’s put into the club so far are interest free), no requirement for the club to repay the principal amount either. There’s probably a benefit in terms of financial fair play rules in here somewhere (PSR for championship clubs) in that the balance sheet is stronger if the investment is used wisely (no liability sitting on the balance sheet!). A quick google of PSR rules talks about losses being covered by equity/secured funds and this being a positive (but I’m no expert on PSR and haven’t read anything in great detail). So I’d assume a benefit here but unsure on the specifics.

Ultimately the only way the owners can get back this equity investment is via dividends or selling the club for a profit. This could only be achieved if the club is performing well (or alternatively in a bad scenario for us, if there’s a fire sale of assets if looking for a quick exit… no signs of this happening), so again shows a level of commitment from DK and his wider company portfolio.

 

[CrawleySkyBlue]

Are Wrexham?

2024 and 2023 accounts show losses of 2.7m and 5.1m.

But the club is owned by an American company (Wrexham Holdings LLC). Don’t know how the Group is structured in that there could be other trading companies in the Group that are linked with the club that when on consolidation show a different set of results. We don’t have access to the consolidated LLC accounts.

It’s a bit like how we’re now structured. Covcityco Ltd is the ultimate parent company and owns Coventry city football club limited (essentially the football club being the team, its ability to play in the EFL and the club’s trading operations), Coventry arena retail Ltd (the trading operations of the stadium), Coventry arena propco limited (proprietor of the stadium lease), Coventry arena opco ltd (proprietor of other leases around the Arena) and Coventry arena ipco ltd (dormant).

Deliberately complicated for a reason unfortunately

* should caveat this with, unless anything has changed since the acquisition of stadium companies in that DK may have moved things around internally between the separate companies. Albeit, I imagine it’s remained the same unless there are specific benefits of doing so, such as maybe PSR or tax. But from a risk perspective, better for the assets to be in separate companies (that along with tax reasons and financial flexibility are why propco/opco companies are generally used).