Investment in FC United shares has topped the half million pound mark, just six weeks after the community share issue was launched to help raise funds towards the development of a new stadium.
Sales of shares have been given a new impetus by the club’s first ever live televised game last Friday, when the club beat Rochdale in the first round of the FA Cup before an audience of millions worldwide.
A further boost has come from HM Revenue & Customs which has given provisional assurance that those who buy £500 of shares can claim 20% back against tax under the Enterprise Investment Scheme.
FC United, which was founded five years ago by Manchester United fans, currently plays at Bury FC’s ground but aims to create a permanent home close to United’s birthplace at Newton Heath, Manchester. The 5,000 capacity stadium will cost £3.5 million to build, of which £1.5 million will come from grant funding, with a further £500,000 from donations.
It hopes to raise as much as possible of the remaining £1.5 million through the community share issue, with any shortfall covered by debt funding. Investors can purchase £1 shares to a value ranging from £200 up to £20,000.
FC United is the first football club to issue community shares. The main aim of the shares is to provide investors with a social return by funding the football and community objectives of FC United, but the club’s business plan also provides for potential financial returns for shareholders.
Shareholders will not receive interest payments or be able to withdraw their investments for the first three years after the club moves into the new stadium, but it aims to pay small amounts of interest after that date. FC United’s one member one vote system will remain unaffected by the share issue.
So far hundreds of individuals have invested and the recent announcement about tax relief has already attracted one PLC and a major building contractor to invest.
Andy Walsh, FC United general manager, said: "We are delighted with the response to the community share issue, which has attracted both ordinary fans and wealthier investors alike. The tax relief alone offers a significant financial benefit - equivalent to a return of 6.5% for the first three years - and after that we aim to pay interest on the shares. Investors will also have the satisfaction of knowing that in raising funds for the stadium, they will be helping to secure the future of FC United and offer major social benefits for the local community.
"We aim to raise as much as possible through the share scheme. We are confident that there are many more supporters and business people willing to invest and urge them to do so as soon as they can.
"As the first football club to raise money in this way, we are pioneering a new model in football finance. We are inviting investors to join with us to change the way football is run by putting supporters at the heart of the game and leave a lasting legacy for future generations."
Community shares cannot be traded or transferred like normal shares, but shareholders who want to withdraw their investment can apply to have their funds returned from the fourth year onwards. Subject to board agreement, the club will allow not more than 10 per cent of the total share capital to be withdrawn in any one year.
The offer is open to individuals aged 16 and over, and businesses. All shareholders must be members of FC United but non-members can join at the time of application. The offer closes on 30 November 2010.
NOTES TO EDITORS
Community Shares are shares issued for a community purpose. The concept has been developed through a joint initiative of the Development Trusts Association and Co-operativesUK with support from the Department for Communities and Local Government. For further information see www.communityshares.org.uk.
Terms of Offer
The share offer is exempt from the Financial Services and Markets Act 2000 or subsidiary regulations because FC United is a community benefit society and the money raised will be used for community purposes. The legal terms of the offer are set out in the offer document which also contains other important information which potential buyers should read carefully.
FC United was founded in 2005 and is a semi-professional football club, currently playing in the Northern Premier League. The club regularly attracts crowds of more than 2,000, several times the league average. It is unique at its level of English football in having its obligations to its fan communities and local communities written into its Club Objects. The club was awarded Cooperative UK’s Cooperative Excellence Award in 2009 for its cutting edge work with local communities.