The following summary is intended to assist everyone’s understanding of events at Gateshead Football Club during the past two weeks.
Following Mark Nellist’s 29th September decision to resign from the board of directors and withdraw his funding for the Club, an appeal was made to Mark and his fellow shareholders to continue funding until a new investor could be found.
On 30th September, Mark gifted his majority shareholding in the Club to Stephen Paylor.
Mark subsequently indicated that he would be willing to take back ownership of the Club and continue to fund it until a credible buyer/investor could be found. However, this was conditional upon all key shareholders (Stephen Paylor plus five others) gifting their shares to him. His condition excluded both the Supporter’s Society, who currently hold circa 8%, and a group of small shareholders of long standing who collectively own around 2%. On completion, Mark would own circa 90% of the Club.
Coincidental with the foregoing we continued to seek potential investment elsewhere and on Wednesday of last week were contacted by locally based Director of Flacks Group, Phil Forster who met with GFC Head of Finance, David Renwick and myself that evening.
Following a lengthy discussion, including consultation with Group principal, Michael Flacks, it was agreed that we should look towards completing an agreement for Flacks Group to secure the majority ownership of GFC on the same terms as those proposed by Mark, i.e., on condition that Flacks Group would acquire approximately 90% of shares at no cost.
I subsequently solicited agreement to Flacks Group’s proposal from Stephen Paylor and four of the five other key shareholders, all of whom readily agreed to donate their shares. David Renwick contacted the remaining key shareholder and solicited his agreement also.
Conscious that players and staff wages were by now a week overdue, we agreed to progress matters in two stages, Firstly, Flacks Group would provide an immediate loan, sufficient to cover wages, before moving on to due diligence with the intention of completing a takeover by next Friday. Following completion Flacks would provide further funds to cover past due debts and working capital.
Thursday and Friday were taken up collaborating with lawyers, including the production and signing of documentation covering both the Loan Agreement and an Exclusivity Agreement. On completion of these stages, funding for wages was released immediately. However, as the money is coming from the USA, international banking procedures dictate that immediate transmission is not possible. Funds are expected to arrive by Tuesday at the latest when wages will be paid without further delay.
Graham Wood, Interim Chairman of Gateshead Football Club.
