JM PACKAGING have offered to invest a further £650,000 into York City to become majority shareholders of the football club.

But that amount would be repayable in interest to the Malton-based company on an assumed future sale of Bootham Crescent, according to a proposal communicated to the Supporters' Trust board business sub-committee by JM Packaging's lawyers.

A copy of the proposal, due to be discussed by the Supporters' Trust board this week, has been made available to the Evening Press by Trust board sub-committee member Mike Grant.

Under the proposal's heads of terms, JM Packaging, who are owned by Minstermen managing director Jason McGill (95 per cent) and his father Rob McGill (5 per cent), would become 76 per cent majority shareholders of the football club in return for a total investment of £950,000.

That figure includes the £300,000 loan already facilitated by JM Packaging, who recently requested what provisions the Trust had in place to meet a January 2007 settlement date which, in turn, led to discussions over the future ownership of the football club.

The Trust, currently, own 85 per cent of shares in the football club with Jason McGill having 15 per cent after making a £50,000 donation.

Under the proposal, JM Packaging have offered to cover the expected £150,000 losses this season, extend the existing £300,000 loan to an assumed future date when Bootham Crescent is sold and meet annual repayments, over the next five years, of £100,000, which are required under the terms of the £2million Football Foundation loan taken out by the club to regain ownership of their home stadium from previous chairman Douglas Craig.

But, under the proposal, JM Packaging's cash injection would be treated as a loan with an interest rate of 12 per cent.

That interest, amounting to £649,000, would then be paid on the assumed sale of Bootham Crescent and the relocation of the football club to a new stadium.

The proposal also states that future investment from JM Packaging would be in the form of a secured loan, which would be secured against Bootham Crescent and repayable upon any event of insolvency at the club.

There is also a condition that adds if planning permission is not obtained within a 12-month period then JM Packaging would "not be obliged to continue to make the facility available".

JM Packaging's lawyers have also asked for their shares to be turned from ordinary shares to preference shares, ahead of those held by the Trust, on the assumed sale of Bootham Crescent but that the Trust would have the ability to buy back the shares from the Trust at their £950,000 par price if JM Packaging want to sell.

If the Trust were to sell their shares for a greater value within three years of buying them back then, under the proposal, it is understood that JM Packaging would receive a split if the Trust were not to invest the difference.

When approached by the Evening Press to comment on JM Packaging's proposal, City director Jason McGill said: "There have been one or two proposals that have been put forward and since changed. JM Packaging are prepared to convert the £300,000 loan into part of a £950,000 package that safeguards the football club going forward.

"An interest rate has not been decided and the quoted rate has certainly not been agreed but, as an officer of JM Packaging, for the company to become involved with a football club it has to be done on a commercial basis and, in any negotiations, you have to talk privately before you make a public statement."

Updated: 09:24 Thursday, April 06, 2006