It is yesterday’s news that Consob approved AS Roma’s capital increase for a maximum amount of 100 million euros but let’s try to better understand what this increase of capital means for the future of AS Roma.
The capital increase is an increase of capital of a company through the issue of new shares or by increasing the par value of existing shares. The new shares are offered to the existing shareholders in proportion to the securities they own. Each shareholder, according to the number of shares owned, may decide whether to join the increase, by exercising his rights, called “option rights.” These option rights are automatically acquired on the basis of the number of shares held.
The type of capital increase decided by AS Roma’s management is that called “Capital Increase for a fee,” in which a shareholder can subscribe new shares upon payment of a fee. Shareholders can choose whether or not to subscribe the new shares by exercising the option rights, otherwise they can sell their right of option to someone else.
Typically, a company decides an increase in capital when it needs cash to make investments or to recover from a bad financial situation…both scenarios perfectly highlight AS Roma’s case. AS Roma needs to reduce its debts and in order to do that it needs an injection of fresh cash. This cash will be provided by the market and/or by AS Roma’s main investors. However, AS Roma also needs money to invest in its various projects such as the acquisition of new players, infrastructures, offices and the stadium as well.
The main AS Roma shareholder is the “Neep Roma Holding” who ensures business continuity and financially supports the development plans of the club. The same Neep Roma Holding is committed to the subscription of the capital increase in proportion to its holding in the company, as well as that of the shares remained unsold up to a maximum amount of 100 million.
This complex process will help AS Roma to reach its financial and sports objectives. This capital increase, along with the next agreement with a main sponsor (Etihad Airways?) will bring the necessary capital to structurally strengthen the company.