The American investment company is set to take charge from Farhad Moshiri in the coming months.
TFG, who also own AS Roma, are hoping to get the club in a solid financial position as they move into their new stadium.
In the letter to shareholders, Chong stated: “All parties are working to secure the necessary regulatory approvals to complete the transaction, and that is progressing well.
“It has not been appropriate to provide information on the takeover whilst the regulatory approval process continues, but I am happy to share with you that TFG has demonstrated a high level of professionalism and a clear, focused approach throughout this process. This has ensured a smooth preparation for the transition of ownership for everyone involved at the club, and provides a clear indication as to the future trajectory of the club, which I’m sure, as a shareholder, you will welcome.
“In accordance with the club’s Articles of Association, a letter will be sent to all shareholders via post ahead of the completion of the sale asking you to vote on all company resolutions required to advance the transaction to completion. The majority shareholder will be voting in favour of each of the resolutions presented.
“One of the resolutions shareholders will be asked to vote on will ensure the club will not be adversely affected by the new rules approved by the Premier League shareholders last Friday in respect of Associated Party Transactions (APT). The changes have been put in place following an Arbitration Panel’s ruling earlier this year, which made clear shareholder loans needed to be brought within the scope of APT within the Premier League’s rules.
“For clarity, the impact of the rule amendments means that, going forward, all loans any shareholder wishes to provide a club will be subject to a Fair Market Valuation (FMV) assessment, and (regardless of the terms of the loan) market interest rate and costs will be applied to the loan facility for the purposes of a club’s PSR calculation – or any future financial sustainability calculation mechanic.
“The rule changes also mean any club with a current shareholder loan balance (as we have), must take steps to ensure such loans are capitalised on or before 11 January 2025, to avoid these loans potentially having a negative impact on a club’s PSR calculation for the accounting period 2024/25.
“In addition to the resolutions around change of control you will be asked to approve, this will be the basis of one of the resolutions included in the formal communication you will receive through the post in the coming weeks.
“As a result of these changes, shareholder loans will no longer provide a PSR neutral route for the injection of funds into a club, leaving equity investment as the only means through which additional funding can be provided without negatively impacting investment in the playing squad. The APT rule amendment requires a capitalisation of shareholder loans which, in turn, will result in the creation of new shares in the Club.
“I can assure you the club, our current majority shareholder and TFG have put in place a structure for the takeover agreement that ensures these rules do not negatively impact the club’s PSR position and will enable TFG to continue to invest in the club and in the team in the years ahead.
“I am aware there is a great deal of anticipation about the vision and plans of our prospective new owners. It is important to explain that, out of respect for the ongoing process, it would not be appropriate for TFG representatives to communicate directly with shareholders at this time.”
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