FC United of Manchester is extending its pioneering Community Shares Scheme offer to the end of February.
The scheme - which aims to raise £1.5 million towards the club’s own ground in Newton Heath - has already generated £700,000 of investment with another £200,000 pledged.
Now the club hopes that by extending the offer, a further wave of investors will come forward and push the total towards the target.
"We’re the first football club to try this approach and we’re breaking new ground on what is possible for a supporter-owned club to achieve," said FC United board member Adam Brown.
"Given this is the first time a football club has tried this approach, we are delighted with the reaction from our fan-base and the business community, ethical investors and anyone who wants to be part of pioneering a new way for football finance.
"We’ve had a fantastic response so far but we believe the appetite is still there for further investment - particularly now we’ve been granted full planning permission for our own ground, and due to the additional interest in the club off the back of our FA Cup run.
"The cup run has been a great boost to the club but has also stretched our resources to the limit. And we only received assurance about tax breaks on the scheme last month, so we want to give people more time to respond to this huge benefit."
In November, HM Revenue & Customs gave advance assurance that those who buy £500 of shares can claim 20% back against tax under the Enterprise Investment Scheme.
The main aim of the Community Shares Scheme is to enable people to participate as shareholders in funding the community facilities that will be built as part of the stadium development. This will deliver new sports, social and function facilities to Newton Heath, an area which faces significant social and economic challenges.
Although shareholders will not receive interest payments or be able to withdraw their investments for the first three years after the club moves into the new stadium, the tax breaks together with the potential to pay interest after that make this an attractive offer for those who care about the future of football, and social investors in general.
The scheme is unique in football as it allows capital investment without affecting FC United’s one member one vote cooperative ownership structure. Investors can purchase £1 shares to a value ranging from £200 up to £20,000. It got the endorsement of Society Media’s Good Deals social investment conference in November, when it won a ’Dragons’ Den’ style pitch on a vote of delegates.
FC United, which was founded in 2005 by Manchester United fans, currently plays at Bury FC’s ground but aims to create a permanent home close to United’s birthplace at Newton Heath. The 5,000 capacity stadium will cost £3.5 million to build.
The funding package includes £1.5m from Community Shares, £500,000 from donations (with over £300,000 raised to date) and the remainder from grants.
Adam Brown added: "There is an amazing buzz around the club at the moment and investing in shares offers individuals a way to be part of it. The tax relief alone offers a significant financial benefit - equivalent to a return of 6.5% for the first three years - and after that we aim to pay interest on the shares in the future.
"Investors will also have the satisfaction of knowing that in raising funds for the stadium, they will be helping to secure the future of FC United, which remains a model of fan ownership as well as offer major social benefits for the local community."
Community shares cannot be traded or transferred like normal shares, but shareholders who want to withdraw their investment can apply to have their funds returned from the fourth year onwards. Subject to board agreement, the club will allow not more than 10 per cent of the total share capital to be withdrawn in any one year.
The offer is open to individuals aged 16 and over, and businesses. All shareholders must be members of FC United but non-members can join at the time of application. Full details of the share offer are set out in the offer document and people who are interested should read it before applying. The offer will now close at 5pm on Monday, February 28th.
To find out more or to invest, visit www.fc-utd.co.uk/communityshares.
NOTES TO EDITORS
Community Shares are shares issued for a community purpose. The concept has been developed through a joint initiative of the Development Trusts Association and Co-operativesUK with support from the Department for Communities and Local Government. For further information see www.fc-utd.co.uk/communityshares.
Terms of Offer
The share offer is exempt from the Financial Services and Markets Act 2000 or subsidiary regulations because FC United is a community benefit society and the money raised will be used for community purposes. The legal terms of the offer are set out in the offer document which also contains other important information which potential buyers should read carefully.
FC United was founded in 2005 and is a semi-professional football club, currently playing in the Northern Premier League. The club regularly attracts crowds of more than 2,000, several times the league average. It is unique at its level of English football in having its obligations to its fan communities and local communities written into its Club Objects. The club was awarded Cooperative UK’s Cooperative Excellence Award in 2009 for its cutting edge work with local communities.