WANDERERS have confirmed that a £5million Government loan taken out during the pandemic has now been converted into shares – but what does that mean to the club?

It is now known that Bolton’s parent company, Football Ventures (Whites) Ltd took advantage of a loan from the £1.1bn Future Fund to help offset huge losses during 2020 and 2021 as Covid forced football to grind to a halt.

Rather than repay the loan, it has been converted into an eight per cent stake in the club.

But how does that bode for the future? We looked as some of the questions being asked by Bolton fans after the story broke and tried to give an explanation.

WHAT IS THE FUTURE FUND?

The Future Fund was a Government-backed loan scheme designed to help ‘innovative’ companies during the pandemic. Fees of between £125,000 and £5million were offered, provided the amount was at least matched by private investors in the company themselves.

The scheme is now closed but helped 1,190 companies whose revenues had been affected by Covid.

Some of the companies have paid back the loan, others – like Bolton - have converted it into equity in their business. The Future Fund will get their money back further down the line.

WHY DID BOLTON NEED A LOAN?

The pandemic forced an early finish to the 2019/20 season and meant that the whole of the 2020/21 campaign was played without supporters. Even though many fans dug deep to help offset the problem by buying season tickets, the club still lost around 70 per cent of the money they would have ordinarily got through ticket sales, merchandising, hospitality, and sponsorship during that time.

The Future Fund loan was available and considered preferable to a bank-based loan which would have been secured against club assets.

HOW MUCH OF WANDERERS DO FUTURE FUNDS OWN?

The deal means eight per cent of the shares in Football Ventures (Whites) Ltd – Wanderers’ parent club - are now owned by the Future Fund.

WHAT DO THE EFL THINK?

The league only get involved if an entity’s stake in the club is more than 10 per cent. At that point it is considered ‘significant control’ and the people responsible would need to pass the owners and directors’ test.

HOW MUCH ARE THE SHARES WORTH?

A quick sum shows that an eight per cent stake in the club sold at £5m means 100 per cent of the club is valued at £62.5m. But realistically, this won’t be the case unless Wanderers bounce into the Premier League.

The Future Fund will obviously expect a return on their investment but how that happens is, as yet, unclear.

WHAT HAPPENS NEXT?

This is the big question. It remains to be seen what the Future Fund do with their shares.

There may be an agreement for Football Ventures to buy them back further down the line at an agreed rate, or they could be made available for other investors – even fans – to purchase.

Either way, it seems unlikely that a Government-funded loan scheme would consider a football club a long-term investment.

From Football Ventures’ point of view, they have successfully negotiated a difficult spell without saddling the business itself with more debt. The eight per cent of Wanderers that they no longer own only becomes an issue if and when they close to sell the club.

IS THIS A GOOD THING?

It depends on your viewpoint. It does not tie any debt to the club itself, as past loans taken out have done.

Football Ventures were not in a position to repay a £5million loan instantly and the portion of the club they have given up does not mean the Government, or Future Funds can call any shots.

Some may question whether taxpayers’ money should go towards the operation of a football club – and it is already well documented that the furlough scheme has also been used.

Others will be happy to see a solution has been found which limits risk.