Eddie Davies could soon step down as owner of Bolton Wanderers

A copy of the annual financial report for 2014/15 obtained by The Bolton News confirms that talks are taking place between the Isle of Man-based businessman and his legal representatives which, if successful, will bring about a change in ownership.

It also details that the club are in “advanced discussions” about a number of additional funding options, which could mean fresh investment in Neil Lennon’s playing squad.

The report also reveals that two weeks ago, Wanderers agreed to the sale of a section of the “stadium estate” believed to be an area of car park at the Macron.

This area has been purchased by a firm called Prescot Business Parks for £5.5 million and leased back to the club.

The Whites said that this sale was part of “medium term strategy to bring forward development as outlined in the Property Masterplan."

Little Lever-born Davies became the major shareholder in Burnden Leisure Plc in 2003 and has invested more than £170million into the club through long-term loans through his company, Moonshift Investments, which is an associate company of the Bermuda-registered Fildraw Private Trust Ltd.

The club has recognised, however, that they need to reduce their reliance on the 69-year-old going into the future and have actively sought new investment over the last few years.

Rumours of foreign investment have circulated for much of the summer – although the club categorically denied in a statement issued to The Bolton News on May 11 that talks had taken place with an Irish consortium.

It was confirmed, however, in a directors’ report issued to Companies House just over a week ago that a change in the club’s hierarchy could come sooner than people think.

“The directors are in advanced discussions in regard to a number of additional funding options, although at the time of the approval of these financial statements, these funding proposals do not represent legally binding offers,” read the report.

“The directors, the ultimate beneficial owner [Davies] and their legal advisors are also in discussions regarding a change of ownership of the business. Such potential new owners are aware of the ongoing funding requirements for the period of 12 months from the date of signing this report.”

Wanderers’ debt is currently made up of a £170m long-term loan and a £4m bridging loan from Moonshift Investments Ltd, who have indicated that there is no intention to recall the loan amount for at least 12 months.

There is also a short-term working capital facility provided by Barclays, including a £5m overdraft which the club expect to pay back in the next 12 months.

The director’s report concedes, however, that dependence upon Davies’ benevolence carries an element of risk as the club remain in the Championship.

“The primary risk at group level is around funding and ongoing reliance on the group’s ultimate beneficial owner Eddie Davies. The risk is mitigated through continual and regular provision of information and dialogue with Eddie Davies. To reduce the reliance on the group’s ultimate beneficial owner, the board are seeking new investment in the form of a long-term funding partner or, alternatively, a new ultimate beneficial owner for the group.”

Significant savings have been made, with the report confirming wages and salaries across the playing staff have been brought down to £26,231,000 from £32,717,000.

The report confirms the company will have “adequate resources to continue in operational existence for the foreseeable future,” but outlined ways extra revenue could be raised in the future, which include the sale of assets (i.e. players or land) or securing money against future season ticket payments.

“After having taken into account a range of possible outcomes arising from on-pitch performance, the forecasts and projections adopted as a basis for going concern show a further funding requirement in excess of the current level of funding facilities immediately available to the directors. Therefore, the directors acknowledge a material uncertainty in the event that the group’s ultimate beneficial owner becomes unwilling at any time to continue providing funding support to the business at its historical levels.

“Accordingly, the directors have identified a number of management initiatives that can be pursued with confidence to mitigate any potential funding shortfall. Options available to the directors include, but are not limited to, the sale of players and other business assets, the securitisation of future season ticket sales, deferral of discretionary capital expenditure, and the release of value from the group’s development land bank through sale or joint venture agreement.”

The club’s finance Director, Anthony Massey said: "The Group chairman, Phil Gartside, has made clear several times recently that, after 15 years of outstanding support for the club, the owner, Eddie Davies, had indicated a medium-term intention to step down from that role. The board continues to work very closely with the owner and his advisers to ensure a smooth and successful transition for the group as and when he passes on control. The detailed disclosures referred to in the latest Group accounts simply comply with the appropriate accounting standards."