Supplementary memorandum submitted by
the Football Association
The Select Committee has raised a number of
questions related to the structuring of the National Stadium project.
This note is our response. This is by necessity a summary of detailed,
1. Under what document was the Grant for the
project made available?
Sport England announced its selection of the
Wembley bid by the English National Stadium Trust (or "ENST")
as the preferred site for a new National Stadium on 17 December
1996 and in principle committed a maximum £120 million lottery
grant. A total of £2,360,000 of funding was made available
to the ENST project by Sport England under grant agreements dated
November 1997 and May 1998.
The balance of £116.74 million was made
available to English National Stadium Development Company Limited
or "ENSDC" (this company later changed its name to Wembley
National Stadium Limited or "WNSL") under a document
entitled the "Lottery Funding Agreement" between Sport
England, ENSDC and the FA dated 12 January 1999.
2. To whom was the Lottery Grant provided
by Sport England?
The Grant was made available to WNSL. WNSL have
drawn down grant as per the LFA.
3. What security did Sport England take for
repayment of the Lottery Grant?
Sport England have security over all assets
(both present and future) of WNSL in a full security package.
Essentially, anything that WNSL owns is charged to Sport England.
No security was provided by the FA under the Grant arrangements.
The FA was included as a party to the Lottery Funding Agreement
to give some particular undertakings in support of the project,
but not as a guarantor.
4. When was the company to which Grant was
made available formed?
WNSL (then called ENSDC) was formed by the English
National Stadium Trust on 18 June 1997.
5. What is the share ownership of WNSL?
The ordinary shares of WNSL were acquired by
the FA from ENST as part of the arrangements entered into in January
There is also "golden share" in WNSL
held by English National Stadium Trust. Sport England required
this golden share to be created as part of the Grant funding arrangements.
The reasoning was for ENST to operate the rights conferred by
the golden share to tie in with Sport England's interests in the
project. In relation to the current refinancing proposals, it
is expected that the golden share will be transferred from ENST
to Sport England.
6. What rights does the golden share give?
There is a list of "restricted matters"
in the Articles of Association of WNSL which WNSL cannot do without
the consent of ENST (countersigned by Sport England), or of Sport
England itself. These things include:
(a) anything which would result in the FA
ceasing to have control of WNSL;
(b) anything which would alter the constitution
of WNSL or the rights of the golden share itself;
(c) initiating certain insolvency proceedings
in relation to WNSL;
(d) materially changing the nature of WNSL's
(e) acquiring any interest in another company,
partnership or joint venture;
(f) a sale or other disposal of the stadium;
(g) paying a dividend during the first five
years following opening of the stadium.
Some of the above apply only for the first 20
years after opening and cease to apply if the Lottery Grant is
repaid. However (a), (b) and (f) continue to apply.
The golden share also gives ENST the right to
appoint a certain number of the board directors of WNSL.
17 May 2002