Norwich Union invest in Blues

Norwich Union is poised to become a major shareholder in Ipswich Town following the rescheduling of the Suffolk club's debt.

Norwich Union is poised to become a major shareholder in Ipswich Town following the rescheduling of the Suffolk club's debt.

Instead of repaying interest on its £27m debt to the insurance giant - who provided the capital to build the North and South Stands - for the next two years, Town are allowing the company to take an almost 10 per cent stake in the company.

This effectively means Norwich Union have invested £3m into Ipswich Town in return for 10 per cent of the club. The deal makes the club's major lender an interested party to the Blues achieving promotion to the Premiership, which in return means a far greater likelihood of getting its money back.

Blues chairman David Sheepshanks was last night delighted to confirm the move and said: “It is fantastic news for the club and represents great value for us. It indicates Norwich Union's commitment and support for what we are trying to do and for that we are very appreciative.”

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The new Ipswich manager could have a fighting fund of up to £1.7m if a new share issue is successful.

The additional money is the maximum allowed to be raised under Town's plans to ask its supporters and existing shareholders to increase their stake-holding and if the full amount is taken up then that would represent a third of the club's issued share capital.

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But all the monies raised should go to the new manager after final details of the rescheduling of the debt to the club's major lenders became clearer.

An extraordinary general meeting has been called for June 5 to pass the motions allowing the share issue and to ratify Norwich Union's agreement, although with the amount of shares held by the board and the majority shareholders, that is expected to be a formality.

A maximum of 170,130 ordinary shares will be issued at 25p each, a provision made to allow Norwich Union to take up a 4.99 per cent stake this September, followed by a further 4.99 per cent next September and allow for an issue of the remaining £840,000 of convertible loan notes.

The board are also seeking permission to have the discretion to limit where appropriate the accumulation of shares greater than 15 per cent.

Currently, director Holly Bellingham, and shareholders Michael Spencer and Kevin Britton, hold between 10 and 15 per cent each, almost £2m.

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