MILLWALL TO RAISE FUNDS THROUGH SHARE ISSUE

After using nearly two-thirds of its overdraft funds, the Championship club has announced plans to raise funds through a share issue by its holding company of Millwall Holdings. Before expenses, the company plans on raising GBP 9.657 million. An initial placing of shares and open offer is expected to raise GBP 5.175 million with another GBP 4.5 million coming from a placement of shares. The moves are pending the approval of shareholders at the club’s annual meeting.

Richard Towner, Theo Paphitis, Constantine Gonticas and Peter de Savary will take up part of the subscription through the capitalistion of loans, with Millwall amounting to GBP 350,000 in total. A further GBP 1.27 million of the balance subscribed to as capitalisation of loans will be provided by certain directors, and others will be deposited with The Bank of Cyprus as collateral for overdraft facilities. Investment bank Seymour Pierce has agreed to underwrite 3.75 million if the shares in the open offer to the value of GBP 1.5 million. 

The purpose of the moves is to provide capital for the club for at least 12 months and to repay loans.

The club has not had a good season in the Championship division and the board is currently investigating ways of improving turnover by additional utilisation of club facilities. The club’s directors said they “believe that there are opportunities to develop both the club's ground (without of course affecting the football stadium facilities) and property in the immediate area. The company has begun to implement feasibility studies and will seek to engage specialist advisers to assess the potential of these sites.”

In financial figures recently released, the club had a turnover of GBP 2.8 million in the six-month period ending November 30, 2005, which resulted in a loss of GBP 2.4 million. The club has bank overdraft facilities of GBP 3.25 million and has used GBP 2.1 million, necessitating the raising of money.