Ashley kills off King’s share issue

MASH have blocked Dave King’s plan to offer Sevco shares to new investors.

Four days after the AGM the troubled company announced the results for the 10 resolutions put to shareholders with all but one of them being accepted.

Resolution 10, allowing the board of directors to issue fresh shares, required the support of 75% of the shareholders but only achieved backing from 73.8% of shareholders.

With no means of raising fresh funding from outside Mr King will have to call upon existing shareholders to keep the club afloat since strict South African exchange controls prevent him from investing his children’s £30m inheritance.

At the AGM the South African based criminal performed a u-turn by announcing that he had decided to repay the £5m crisis loan provided by Sports Direct in January, in June at an EGM shareholders rejected a request by MASH to have the money repaid.

Announcing the result a club statement read: “The votes for resolution 10 were considerably higher than the directors had anticipated and almost enough to see the vote carried as a special resolution.

“The directors will consider carefully shareholders views on this vote, consult (where practicable) with those who did not vote or opposed the resolution and identify the company’s next steps after that process is complete.”

New shares can be offered to existing shareholders but that would allow Ashley to retain his 8.92% stake and effectively block further plans for outside investment which was expected from supporter groups. Sevco were booted off the Alternative Investment Market as soon as King took control of the marble staircase.

Last week Sports Direct were successful in a court action to have a resolution removed that would have allowed the club to block anyone with a stake in another football club from voting.

Next week Mr King is scheduled to appear in court in London on a charge of breaking an injunction preventing him from discussing details of the Rangers Retail deal with Sports Direct.

Sevco’s audited accounts carried a going concern warning that £2.5m of additional financing is required to see the club through to the end of the season.

Details of how the company raised £5m in one hour to pay off Sports Direct haven’t been published with no confirmation that the payment has been made.