Aberdeen FC apply for private company status

Aberdeen's directors hope to cash in on £2million worth of investment as they seek permission to switch from public to private limited company status.

Chairman Stewart Milne has issued a circular to shareholders outlining the plans which will help fund the Dons' new stadium and training ground project.

And Milne says the switch will help the Reds generate fresh investment in future.

A general meeting has been arranged for July 2 where the proposal will be put to a shareholder vote.

Milne, said: "This change will facilitate investment in the club by way of share subscription. This will allow a currently-proposed investment of £2million to proceed and increase our ability to attract further investment in the future.

"Share subscription has played a key part in raising funds for phase one (the new training ground) and, along with other initiatives, will continue to play a big part in fundraising for the new stadium.''

In a statement, the club's board says the change is "necessary to meet the ambition and strategic objectives of the club, both on and off the pitch''.

As a public limited company, Aberdeen is subject to the City Code on takeovers and mergers.

The rulebook requires anyone - either as an individual or together with associates - who holds at least 30 per cent of the voting rights in a public company to make an offer to buy out the rest of the firm's shares.

But the club says this condition has put off some investors from ploughing their cash into Aberdeen as they "do not wish to be forced to make an offer for the entire equity share capital of AFC''.

Milne added: "As a private limited company, this rule will no longer apply, immediately unlocking £2million of investment. This will close the fundraising for phase one and allow the training facilities and community sports hub to be completed this autumn.

"Our ability to raise further funds by share subscription for phase two (the stadium) will be significantly enhanced by becoming a private limited company.

"It is the intention that both existing and new shareholders will be able to participate in the phase two share subscription.''

The director's statement adds: "The board believes these changes are in the best interests of the club and its shareholders and is unanimously recommending shareholders to vote in favour of the resolutions proposed at the general meeting.

"The Circular sets out at length the relevant background, the detailed proposals, the consequences of the loss of protections provided by the City Code on takeovers and mergers, and the board's recommendation, and shareholders are encouraged to read it carefully."