Dundee FC shareholding supporters have been warned dilute your stake in the club below 50% or cost it £500,000.
A stark message of ”drastic” cutbacks in manager Barry Smith’s budget has been laid bare by the Dundee Football Club Supporters’ Society, whose members own a majority of the shares in the Dens Park club following their emergence from administration last year.
Two months ago they controversially voted against letting their shares drop under 50% in exchange for cash from potential backers. But DFCSS have now organised a second ballot and have made no attempt to sugar-coat the consequences of another knockback.
The organisation has said it can bring in around £500,000 from several sources but this won’t happen unless it is translated into shares.
A statement issued on Wednesday by DFCSS and club board member Fraser MacDonald read: ”The simple fact is that with the costs of administration and the football debt still to be repaid, it was always our plan to bring in further external funding over the course of this season and next.
”However, it has proven difficult to do this while maintaining a shareholding of over 50% and, as a result, the choice is clear refuse the money on the table, and cut our cloth drastically next season, particularly in terms of the playing budget; or accept the significant funding which is currently on offer.
”As a result, the following proposal from the club board has the backing of the society board and is recommended to our members for their approval.
”The aim is to raise up to £500,000 over the next 12 months for the club through a partnership between the society, the Dark Blue Business Trust, current shareholders, businesses and fans.”
Of the £500,000 it is anticipated that £300,000 could come from private investors and already £170,000 has been offered, DFCSS point out.
A further £100,000 could come from shareholders through a rights issue, while the society and the business trust hope to contribute a further £50,000 each.
If the target is achieved, the society’s shareholding would drop to around 37%. But DFCSS would remain the club’s biggest single shareholder, with three directors on the club board.
The statement said the directors of the club and the society will be at the society AGM, which takes place on Saturday at 10am for 10.30am in the Taxi Club, Rosebank Street, and a Q&A session will allow members to discuss and debate any related issues.
The ballot closes at 5pm on Wednesday December 14, and ballot boxes will be available at Dens Park before Saturday’s game, and in the club office thereafter.
Ballot papers can be downloaded from www.dee4life.com or obtained at the AGM, the club shop or at the stadium on Saturday. Members will also be permitted to return ballot papers by scanning and emailing them to election@dee4life.com.”
The statement added: ”While many clubs are struggling to plan for next month, the club board is keen to look further ahead, and will also have to complete a return on the club’s financial stability for the SPL as long as promotion remains a possibility.”