Silver Shield Group, the Coventry-based replacement windscreen company, announced yesterday it had signed a deal to buy 80 per cent of the club for just pounds 100 and take over some pounds 1.4m worth of debts.
Doug Sharpe, Swansea's chairman, has agreed to sell the stake through his holding company, Enterline, and will resign from the club's board after the deal goes through.
Robin Sharpe, chief executive, will stay on the board, joined by Neil McClure, Silver Shield's chairman.
Apart from the pounds 100 purchase price for the stake, Silver Shield is paying pounds 449,900 to take over loans and interest of pounds 1.4m owned to another of Mr Sharpe's companies. Silver Shield is also paying pounds 25,000 to cover loans to the club from Mal Griffiths, one of the directors.
To fund the deal Silver Shield, which came to the stock market in spring 1996, is raising pounds 400,000 by issuing 11.4 million new shares at 3.5p each. The group's share price slipped yesterday from 4p to 3.75p on news of the proposed acquisition and the accompanying rights issue. One of Mr Sharpe's companies will pay pounds 50,000 for 1.4 million shares, which it cannot sell for a year.
Swansea City, which is managed by the ex-Liverpool mid-fielder, Jan Molby, plays in the third division of the Football League and narrowly missed promotion at the end of last season following a play-off at Wembley.
Mr McClure said he was attracted by the chance to build an all-seat stadium and leisure complex close to the centre of Swansea which would provide added income for investors.
Mr McClure said he hoped negotiations on the stadium would be concluded in up to eight weeks. He explained: "We have been looking for some time for opportunities to acquire valuable assets at reasonable prices to add to our Silver Shield Screen subsidiary."