Recently it was announced that the Convertible Loan Notes (CLNs) held by Jason Levien, Steve Kaplan, and Jake Silverstein are being converted into equity at the club. The Swans Trust can confirm today that the process has now been completed. This is a positive step forward and the result of an ongoing process between the ownership group and the Swansea City Supporters’ Trust, with months of dialogue to examine options and ensure that the best interests of the club and the Trust are protected.
The conversion of the loan notes which total GBP 10 million into equity will reduce the total debt owed by the club and improve the financial stability in the short-medium term. The agreement to convert the loans to shares in the club has been in place since the introduction of the CLN structure back in 2020 and is part of the ongoing push to ensure the club is financially sustainable.
The day-to-day influence of the Trust, and the strong relationships formed with the senior management team within the club, will not be affected by this change. The conversion of the loan notes will mean the Trust’s shareholding becomes just under 16%. This dilution is what was agreed and expected when the shareholding dispute was settled in February 2022. We should of course remember that 5% of our holding is not dilutable, a benefit gained as part of the settlement agreement, and the Trust’s share rights will never dip below 5% unless we agree to sell this shareholding.
The use of CLNs and other financial instruments to support clubs is common in the football league, and we have seen similar capital injections from investors and ownership groups throughout the pyramid, particularly as the fallout from the pandemic and the rise in inflation continues to affect operations.
Football finance more broadly is in a perilous situation, and we are in constant discussions with our partners at the Football Supporters’ Association about actions and discussions with national bodies and ministers within government to resolve this. We back the recommendations set out in the Fan Led Review to develop a more sustainable financial model for clubs outside of the Premier League, and our survey of members highlighted widespread support for the implementation of such actions.
If you have any questions about today’s announcement, please email us at info@swanstrust.co.uk
The Swans Trust continues to work tirelessly to ensure we have a sustainable and viable football club in the short-medium term as well as long into the future.
Swansea City Supporters’ Trust
18th October 2022 |  |
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