Plymouth Argyle Fans' Trust consider buying 20 per cent stake in club
THE ARGYLE Fans' Trust are seeking the views of their membership over whether to proceed with a proposal for them to buy into the League Two club.
James Brent, the Pilgrims' owner and chairman, has offered the Trust the chance to purchase up to a 20 per cent stake, which would cost £400,000.
Brent, who rescued Argyle out of administration in 2011, has set a minimum investment of £100,000 to secure a five per cent shareholding.
He is also open to acquisitions being made in phases of five per cent each time.
The Trust board have sent out a share offer consultation document to their members and are seeking their opinions by December 21.
Before doing so, they sought advice and guidance from Supporters' Direct, who are promoting greater fan influence in how football clubs are run, and financial advisers.
The Trust board have talked to other similar groups about what buying a stake in the club might mean and how it could be financed.
They have also been in regular dialogue with Argyle to discuss specifics of the offer.
The Trust board have been told by the club that any investment would be used to support youth development at Home Park.
They have also presented two additional options within the share offer consultation document for the consideration of their membership.
One of them is a 'Golden Share' which would be owned by the Trust with the agreement of Argyle and there would be 'rights and powers' linked to it.
The Trust board have admitted in the share offer consultation document that 'the offer to purchase a stake in the club has at the very least a strong emotional appeal'.
They added: "The fans, through the Trust, would then be sharing in the destiny of the club, which should increase supporter engagement.
"It may also create the opportunity to build a stronger relationship with the club's owner."
The holding in Argyle could be taken in the form of regular shares or as convertible loan notes, which would earn a fixed five per cent interest per year for the Trust.
The loan notes offer some additional protection on the investment and can be switched to shares at a later date.
The Trust board have pointed out a seat on the Argyle board is not on offer and a 20 per cent shareholding gives only limited rights in company law.
They also highlighted the fact it would take a significant effort to raise £400,000 and the holding could be diluted by the issue of additional shares in the future.
The Trust board have recommended that members consider what is the best use of available funds to support their objectives.
These include strengthening the bonds between the club and the local community, and achieving the greatest possible supporter and community influence in the running and ownership of the club. The Trust board believes the possibility of a 'Golden Share' is worth exploring further.
They stated it was already in use to some extent by a small number of other clubs.
It could, for example, give supporters the right to veto a change of team name, a move to a new stadium, a significant change in team colours and a certain level of access to club financial information.
However, the Trust board acknowledged a balance would have to be found so Argyle's directors would have the necessary freedom to act in the best interests of the club.
The second of the two additional options put forward by the Trust board is a community share scheme.
This would be a method of fundraising for an appropriate facility which can be used by both Argyle and the local community.
The Trust will publish further information related to the share offer consultation on their website www.argylefanstrust.com.