Rochdale hoping takeover happens before end of March or club faces liquidation

Grim news confirmed this week with Rochdale hoping a takeover happens before the end of March or the club faces liquidation.

Rochdale AFC have received distressing news this week as it was confirmed that the club is in dire need of a takeover before the end of March.

Failure to secure new ownership could result in the club facing liquidation, according to the chairman, Simon Gauge, who despite his efforts to secure new investment for the struggling club over the past 14 months, no deal has been successfully finalised.

This comes as a huge blow to the club, who were relegated from the EFL for the first time in 102 years last year, and currently sit 12th in the National League with 41 points from 32 games played, 10 points frok the playoffs and six above the drop zone..

Rochdale AFC takeover MUST happen before end of March or club faces liquidationhttps://t.co/8e5VQ6UpZ4https://t.co/8e5VQ6UpZ4

— Manchester News MEN (@MENnewsdesk) February 20, 2024

Big concern at Rochdale here in this statement.

Chairman Simon Gauge saying “threat of liquidation at the end of March is very real”#RAFC https://t.co/BUpeaLi0ds

— Mike Minay (@MikeMinay) February 20, 2024

Chairman’s Statement On EGM

As you will see from the attached notice, the club has called an EGM for Thursday 7th March 2024.
My fellow Directors and I became involved in the club following the EGM in June 2021, and I think it is fair to say that we would not have got involved had we been fully aware of what we were taking on. The finances of the club at that time were perilous. We were just exiting Covid, and the club had been relegated from League One. We would certainly have gone nowhere near the club had we been aware of the hostile takeover attempt that followed. Fighting this took a great deal of time and resource, and was a distraction from trying to arrest the downward spiral that the club found itself in both on and off the pitch.

This downward spiral led to the club facing a series of challenges, consecutively, that continue to threaten our very existence. Once a club of our size is on a descending trajectory with League One costs and reducing revenues, an injection of cash is needed to arrest the decline. We got this through the issue of shares. Unfortunately, this is an annual requirement.

That situation has not changed a great deal and the search for an investor has taken up a lot of my time over the past 14 months. We have come extremely close to securing investment on a couple of occasions but have never, for various reasons, got anything over the line. We have also spoken to many investors who have shown interest in the club but never proceeded.

On analysis, the main barriers to investment have been:

1. The share structure. Investors want to be able to buy up to 90% of the club in one simple transaction.

2. Where the investment goes. Investors want all investment to go directly into the club, rather than outside of the club, to individuals, by way of private share purchases.

3. Club management. Overseas investors especially are frightened that they will be left to run the club from afar. They want some continuity during a handover period.

4. Level of debt. Investors want agreements on the debt that the club is carrying.

5. Financial situation. Investors want a plan to sort out the club’s immediate financial situation.

6. Uneconomical leases. Investors are simply not prepared to subsidise these.

The club has one major asset, the stadium, but little else of financial value. It is asset-rich and cash-poor. It has no cash to continue operating. I, like all of you, do not wish the club to disappear, so have been subsidising it over recent months and have in total loaned the club £566k. My family has done this to try and buy the time to find investment that can take the club forward. My family has now reached its credit limit and cannot continue to do this. An investor needs to be in place by the end of March.

We are in talks with interested parties, but they will not move forward until the conditions for investment are in place. In an ideal world, we would have an investor in place before calling the EGM, but we do not have that luxury of time. This EGM is essential to achieving the required conditions that an investor wants. If we move to a period of exclusivity with any party before the EGM, we will disclose this to shareholders.

The motion will create 9,000,000 new ordinary A shares.

We are looking for an investor to inject £2m to gain 90% of the club. This can be done in one transaction with all funds going to the club, addressing points 1 and 2 above.

I am prepared to convert my debt into equity and discuss with any investor a phased buyout of those shares if required. This partly addresses points 3 and 4 above. We are in talks with Rochdale Council to address the remainder of point 4 and point 6.

Finally, we are a long way into a cost-cutting exercise at the club to get us to a National League cost base and eradicate unnecessary expenditure. We will continue to make these tough financial decisions over the next month or so whilst protecting, as far as possible, the first team budget. This means that when investment is secured, growth can be achieved with a controlled cost base in place and all efforts can then be put into increasing revenues. This will address point 5.

Let me leave you in no doubt, this resolution needs to be passed at the EGM for us to have any chance of securing the required investment that will ensure the long-term future of our club. If it isn’t passed, the threat of liquidation at the end of March is very real. The passing of this resolution does not guarantee saving the club, but it will certainly give it a fighting chance.

To be clear, the existence of Rochdale AFC is at stake. The opportunity to give a long-term future is now in the shareholders’ hands.

A frequently asked questions document will be issued to shareholders in the coming days, which will help to explain the proposed resolutions further.

Twitter users gave their thoughts with Rochdale hoping takeover happens before the end of March or the club faces liquidation…

@UAGMVMT: Not sure what’s going on but if there is anything we can do where possible we will! It’s shocking what’s happening to football clubs especially ones like Oldham and Rochdale who are vital parts of the community bringing much needed revenue

@deanholden: Well that’s made me feel pretty miserable. I’ll try and stay positive though that there are people actually interested in investing should these resolutions get through.

@elliott_h99: Well this makes for absolutely grim reading.

@Ben_m_1234: What a sad sad state…

@SCbfc13: For all the kids who support Rochdale AFC i hope you survive, it wont be forgotton though that There was the unfortunate minority who laughed at us when our time was up, NOT A NICE FEELING IS IT .

@ianstox79: Rivals aside Hopefully someone will come in to save the club, we know what it’s like to nearly lost your football club, we’ve gone through it twice

@NormalNeco: Hope yous pull through this, wouldn’t wish this on any club

@Wilson78Dale: Wow it’s utter madness that it’s allowed to happen and soon as the people at the top think the beloved premier league is under threat from a euro super league everyone is up in arms,hope you lot get sorted it can’t happen again like it did at Bury Fc

@CharxRafc: We need people to help share and nationwide attention asap!! Our club needs saving and this is our last chance, we need to spread the word. Please retweet and help try to save us. Not the biggest club in football but a club people are familiar with, a community football club and an asset to the town. A place to go and be ourselves, escape from life and problems, make friends, bring on youth players. Just so many memories here and we can’t let it die. Please help by sharing 😭💔💔💔

@stephen_dimmock: Yet again we are seeing a club on the brink of oblivion as a result of the lack of accountability in how football is run in this country. Independent regulator is needed as soon as possible, these clubs are people’s livelihoods and they shouldn’t be allowed to disappear like this

@Ben_m_1234: The money put in has to be applauded and thanked but your ability or lack of to run a football club has killed us. From a League One team to a month away from possible liquidation… gutting! Should be ashamed. #RAFC

@RochdaleFan: This is sickening to read. The threat of liquidation is very real if we can’t find investment by March. Our club. Our livelihood. Could be all taken away from us just like that. #RAFC

@Tom_H_04: 6 years and 2 days ago we drew with Tottenham to get a replay in the 5th round of the FA Cup. Now we might not make it into the month of April. It’s sickening how quickly things change in football #RAFC

@dontmswithme: Hate seeing other clubs go through what we go. For every gobby Rochdale fan there is a child like mine were when Bury got kicked out or elderly dependent on the social interaction. Its a terrible thing when a club is taken away and I hope they get sorted.