Explainer: What shareholder letters mean for City's future

This 36-page legal document spells out the process of a transition of power at the top of Carrow Road. If all goes as expected, this will end the 27-year reign of Delia Smith and Michael Wynn Jones as majority shareholders and beckon in Mark Attanasio's led Norfolk FB Holdings as sole controllers of the club. 

Shareholders are being asked to vote on six resolutions that will see a formal transition of power from March 1, 2025. 

The meeting has been scheduled for 6pm Wednesday, October 23, at Carrow Road, but shareholders are being encouraged to vote remotely and post back their slips. An independent organisation will count and verify the slips. 

Currently, the football club is run by two powerbases — Smith and Wynn Jones plus Attanasio’s Norfolk FB Holdings — both of which have parity in terms of ordinary shares (40.4pc). 

Since last year, that has been the ownership structure deployed at Norwich City, with Attanasio voting in lockstep with Smith and Wynn Jones on shareholding-related matters. 

This vote decisively tilts the shareholding mix between the two groups from 40-40 to 85-15 in favour of Attanasio’s party. 

The vehicle for creating that structure is a debt-to-equity agreement for borrowing, loans and debt, which turns Norwich from a negative entity on the balance sheet to a minimal debt position. That is created through the construction of 2,465,165 new D-preference and 56,023,908 new E-preference shares.

Delia Smith and Michael Wynn Jones are set to step down as directors after the vote later this month. (Image: Paul Chesterton/Focus Images Ltd) The D-preference are being issued at a premium to their £1.00 nominal value, at the equivalent $7.05 rate per share, which converts to £5.34 per share, using the quoted spot-rate of 0.7576 in the documents. Therefore, the 2.4m D-preference shares have a value of £13,166,643. 

The balance will be the 56m new E-preference shares, which are to be issued at their nominal £1.00 value but, importantly, will still accrue a dividend liability at 11%.

The class D shares will be created to the value that allows Attanasio’s group, from March 1, 2025, to convert those into ordinary shares to trigger the new ownership mix and grant them majority control of the football club plus a transformed financial position. This will leave the club in a significantly healthier position due to the internalisation of most debt.

By converting that debt into equity, there are no interest payments accruing onto that debt, borrowing or loans which will radically improve City’s profit and sustainability position, something clubs are being forced to manage after hefty punishments handed out to Premier League clubs. 

It is designed to give the City fiscal room to operate due to the lack of interest building on debt. It also prevents payments owed to Attanasio’s group from building up, with the American never seeking to take the money owed. 

The Takeover Panel, which regulates public limited companies, step in to oversee the process. They have granted City a Rule 9 waiver to prevent Attanasio’s group being forced into making a mandatory offer to the 6,500 plus shareholders shares at the same rate of the agreement with Smith and Wynn Jones. 

That forms the basis of the vote shareholders will undertake to grant that process, which will then see the class D shares issued to allow them to be converted into ordinary shares next March. 

Smith and Wynn Jones retain a clause to enforce that share conversion to happen in March, essentially to ensure the deal is passed. 

The delay to March is owing to regulatory deadlines at Attanasio’s end, but for all extents and purposes, Norfolk FB Holdings will assume overall control from the moment the shares are issued.

The document also shows that, as of August 31, 2024, Attanasio's group have injected $80.45m of debt financing into Norwich City. That was increased last month by a further loan of $7.05m to provide the business with working capital cash flow and to help with player acquisitions over the summer window. That has an interest rate of 11pc. 

Mark Attanasio's group are set to gain majority control of the football club. (Image: Paul Chesterton/Focus Images Ltd) City signed eight players during the summer - some of which funded by Attanasio's group as long-term investments for the future but to strengthen the squad. 

That investment will remain outstanding and will not form part of the proposed refinancing plan. 

Norfolk FB Holdings have also agreed a new PIK (Payment in Kind) loan to the value of $3.99m with an interest rate of 11pc per annum. The maturity date of March 1 2025 unless extended by agreement of Attanasio’s group and the company. 

Should the vote be passed, Smith and Wynn Jones are expected to immediately step down from the board of directors. They will be refunded for a loan issued in August 2022 for stadium refurbishment to the value of £1.04m. 

The pair will become 'life presidents' of the football club. That title will not owe the pair to any rights or obligations when it comes to board decisions, although they will retain their seats at the front of the directors box plus their current ticket allocation and up to eight complimentary tickets per home game. 

That will also include car parking and dining in the directors' lounge, plus access will granted for them to continue attending away fixtures. 

Plans to honour Smith and Wynn Jones for their contribution and long service to Norwich are expected to be announced upon the successful completion of the vote. 

Tom Smith will remain on the board alongside executive director Zoe Webber. Resolution number three is for shareholders to approve the appointment of Attanasio's associate Richard Ressler onto the board. 

Norfolk FB Holdings will also be entitled to appoint a third member to the board to ensure they have a majority on votes. In an instance that a director from the group aren't present for a vote, the remaining persons present will be handed extra votes to maintain the majority. 

They will also retain, in effect, the first right of negotiation if Smith and Wynn Jones decide to sell some or all of their shares in the future. The previous agreement that saw Attanasio's group vote in tandem with Smith and Wynn Jones will be terminated once shareholders pass these resolutions. 

The document also contains information on Attanasio's company, which was incorporated on June 13, 2022, as a private limited company in Delaware. 

It was created as an investment vehicle for share acquisition and has no business or trading activities outside of its shareholding in Norwich City. 

Norfolk FB Holdings is constructed of three members - Canaries, Footloose and Orchard. Those three hold 83.2pc shares in the company. Attanasio controls Canaries, Canary Management and Footloose whilst Ressler heads up Orchard. 

Zoe Webber will remain on the board at Norwich City. (Image: Daniel Hanbury/Focus Images Ltd) The remaining shareholders consist of US-based individuals, trusts, and corporate entities. Norfolk has five directors: Attanasio (chairman), Ressler (vice-chairman), Rick Schlesinger (secretary and treasurer), Daniel Fumai (assistant treasurer), and Marti Wronski (assistant secretary). 

Unlike the process last year, there will no red tape for Attanasio’s group to pass with the EFL due to them all undertaking directors tests last year - something any individual is obligated to do once shareholding in a club overtakes 25pc. 

In terms of day-to-day operations, the expectation is that it will be business as usual, with the current working structure of an executive committee expected to be retained. Attanasio played a key role in the decision to hire Ben Knapper as sporting director. 

Both Knapper and Attanasio hope to lead Norwich down a new route led by data in terms of their footballing operations, a process kicked off this summer through their transfer business. 

It is now down to shareholders to cast their votes which will shape Norwich City's future power structures and begin a new era at Carrow Road. 

- Watch our special explainer Pink Un podcast on the agreement filmed in August below👇