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Trust statement re club financing
Trust statement re club financing

As announced previously, the Supporters' Trust is involved in discussions with J M Packaging Ltd with a view to introducing a significant amount of additional funding to York City Football Club that, if concluded, will involve a change to the ownership structure of the Club. Currently, the Trust owns 85% of the total issued share capital of the Club and Jason McGill owns 15%. These discussions commenced following consideration by the boards of the Trust and the Club of alternative funding arrangements. Other than J M Packaging, the Trust is not aware of any other party prepared to partner with the Trust in the future ownership and funding of YCFC.

The main objective of these discussions is to work in the best interests of York City Football Club. In part, so as to try to provide stability to help Billy McEwan and his team achieve on the pitch.

At this stage, in respect of a possible partnership involving J M Packaging, a number of principles have been discussed between the parties and their respective legal representatives. At this stage, the discussions are ongoing and no conclusions have been reached. Some of the principles discussed with J M Packaging include:

J M Packaging Ltd to potentially subscribe for new shares such that its ownership would be 75% plus one share of York City Football Club Ltd for 950,000 over 5 years. This would bring the overall cash contribution to the Club from Jason McGill / J M Packaging Ltd to over 1 million.

The 950,000 to be subscribed for the new shares would potentially consist of the following:

- 300,000 loan to convert into shares; and

-Minimum 150,000 cash injection required in respect of the 2005/06 season; and

- 500,000 cash injection over the next 5 years.

For there to be a reasonable rate of return for J M Packaging Ltd on the funds it has provided to the Club. This return would only be paid by the Club following the sale of Bootham Crescent, as part of the move to a new stadium in the city in several years time. The interest rate is to be agreed between the parties.

The partnership with the Trust to continue, cemented by the addition of various new rights to the Trust, for instance in respect of the ground situation and operations.

The 1 million would remain in shares in York City Football Club and the Supporters Trust would have the opportunity to buy the shares back at par.

Because of the situation inherited by the Trust in 2003, the financial, business and legal issues are not straightforward and can be difficult to convey and for people to fully understand. It is very disappointing that Trust Board member Mike Grant has breached confidentiality by leaking information to the Evening Press, without him having a proper understanding of the matters involved. This unilateral action risks jeopardising the future of the Club and the Trust at a very important time in the season, and providing inaccurate information about matters that have yet to be concluded.

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