Members are set to be asked to vote on a strategic capital expenditure: the Club gaining full control of OTR (Exeter) Limited, the owners of 'The Park'.
'The Park' building consists of the Club's offices, some storage areas, Supporter's Bar, Trust Hospitality Suite and bar, the Museum room, and The Legends Lounge. It also owns the area adjacent to the Nevada Stand (known as the Fan Zone) up to the metal gates separating it from Stadium Way.
OTR (Exeter) Limited was formed to purchase and develop this building in 1998, at a time when the Club did not have the necessary funds and as a way of safeguarding the Club against the sale of its assets if there was an insolvency situation. Each investor formed part of a Participation Agreement that contained two fundamental conditions:
That no investor should receive interest on the monies lent to the Company (unless all participants agreed) and that each investor would resign as a member of the Company when their loan was repaid; and
That once the loans were repaid the building would be dealt with as the Club required.
OTR (Exeter) Limited does not trade in any other matter.
The Company granted a lease to the Club and over the years, the Club has been paying rent which the Company has used to repay a bank loan, meet the Company's expenses and, more recently, reduce the loans made by the participants. Once the participants' loans were fully repaid, a mechanism existed, within the Participation Agreement, to allow for the Club to take full control or to transfer ownership of the company’s assets (i.e. 'The Park' Building), to the Club.
Throughout this period the football club has had full responsibility for the upkeep and maintenance of the building. The costs incurred by OTR (Exeter) Limited (the usual legal, audit, and taxation charges) were paid out of the rent.
Exeter City Football Club pay £62,000pa rent under the lease and, subject to variations in the costs incurred by OTR (Exeter) Limited, would be expected to have funded the full repayment of the loans in 2030. At present there is £287k outstanding.
The Supporters' Trust would like to loan Exeter City Football Club sufficient funds to repay the loan immediately, and an additional amount equal to the Club's own investment in the company (£37k). This would be done on the basis that the loan could be repaid by transferring the building to the Trust or the Trust being given sole control of the Company. The Trust is taking advice at the moment on the best way to hold the property assets used by the Club.
The Supporters' Trust will engage appropriate legal representation to ensure that any transfer of the asset/transfer of control is completed appropriately and that the Club continues to service the building in the same manner as it does at present.
The Trust Board strongly recommend that members approve this activity. It will further safeguard our Club whilst potentially saving considerable sums of money with respect to the additional costs incurred by OTR (Exeter) Limited.
We will be holding a special Members' Forum on 16th May at 18:30 (held in the Trust Suite at St James Park) where Club and Trust Chair, Nick Hawker, other Trustees, Andrew Rothwell (Club Board Director), and Joe Gorman (CFO), will be present to discuss and answer questions.
If you have any queries then please, let us know at enquiries@weownexetercityfc.co.uk and we will endeavour to answer them.