Rangers board in crisis talks after emergency £500,000 loan By Roddy Forsyth 05 Jan 2015 Roddy Forsyth explains the ongoing power struggle at Rangers between Mike Ashley, Dave King and the Three Bears, and Phoenix Suns owner Robert Sarver In a day of high drama at Ibrox the Rangers board is negotiating under severe pressure to save the club from financial meltdown for the second time in three years. The plc directors are frantically trying to strike a deal with the investor alliance of Dave King – a former Rangers director – and the Three Bears consortium, who last week scooped up available shares in an audacious raid. The astonishing development followed Telegraph Sport’s disclosure last night that the unpopular Ibrox regime had reached a crisis, which was confirmed today when the club’s board announced to the Stock Exchange that they had accepted an emergency loan of £500,000 from its football chairman, Sandy Easdale, to stay afloat for another few days. The Telegraph had revealed that a major announcement to the LSE was imminent, in respect of Rangers’ parlous economic situation. The trigger was a bill from HMRC for payment of National Insurance, under threat of a petition by the tax authority for the club to be placed into administration if the account was not settled immediately. ADVERTISEMENT Easdale’s loan is secured on the fee – believed to be £1 million - obtained from Brentford for the transfer of the highly rated 20-year-old midfielder, Lewis Macleod. When Rangers confirmed MacLeod’s sale to the Stock Exchange on Friday, the announcement said that the proceeds would “be used for immediate working capital”. The announcement of Easdale’s loan stated that the £500,000 would “be used by the Company for general working capital purposes over the next few days”. The statement added that the loan had been offered and accepted “on a fee and interest free basis and it will be secured against the income from the sale of player announced on 2 January 2015”. Even as the Rangers board sought an agreement to avoid the clubs collapse, however, a statement from Sandy Easdales PR advisor, Jack Irvine, brought a sharp retort from King. Commenting on Easdales secured funding deal, Irvine said: Once again Sandy has stepped up to the plate with this half million pound loan from his own pocket. Whilst we welcomed the recent share purchases by Dave King and Douglas Park and his consortium, this unfortunately did not put any funds into the club. Sandy was the only option for this cash injection at such short notice. The Easdale family remain totally committed to achieving a satisfactory financial future for Rangers and they hope all parties can work together in the future with that common goal. King retorted angrily and told Telegraph Sport: Given that Sandy Easdale rejected new funds and was a chief architect in getting the club into this mess, lending a small amount of money is the minimum he should have done. As part restitution he should make the £500,000 a donation rather than a loan. The situation whereby a short-term loan of working capital is secured on recently obtained and desperately needed working capital is not only designed to stave off immediate administration, but also to keep the club afloat while the directors try to salvage what they can before surrendering to what now looks like an inevitable takeover by the fan-friendly axis of King and the Three Bears. However, three possibilities are in play. One – currently looking the least likely - is that Mike Ashley will come to the board’s rescue, having secured control over the appointment of two directors in return for £3 million of emergency funding in October. However, the Newcastle United owner had previously tried to negotiate with the Scottish Football Association to increase his stake at Ibrox from 8.92% to 29.9% but was refused by the governing body, who insisted that he should comply with his written undertaking not to go above 10%. The second option is an £18 million takeover offer from Robert Sarver, owner of Phoenix Suns basketball club. That offer was also notified to the Stock Exchange at the start of business this morning. Again, Telegraph Sport led the way in revealing that there had been conversations between Sarver’s advisers and those connected with the Three Bears consortium of wealthy shareholders, who have bought a substantial tranche of Rangers shares, as has the former Ibrox director, Dave King. Rangers’ second Stock Exchange statement today read: “The Company notes recent press speculation and confirms that it has received an approach from Robert Sarver (or a vehicle to be established and controlled by him) (Mr Sarver) that may or may not lead to an offer being made for the Company. “There can be no certainty that an offer will be made, nor as to the terms on which an offer may be made. A further announcement is expected shortly.” Takeover rules mean that Sarver has until 5pm on February 2 to confirm or withdraw his offer, which is worth £18 million and designed to give him complete control of the club’s equity. Again, there are difficulties with this proposal. As the Telegraph disclosed, Sarver has an interest in investing in European football clubs, as opposed to a strategy based solely on a single outfit such as Rangers. A full equity bid would take time to implement, even if it found favour with the majority of investors. When King placed an offer of £16 million in October – the deal rejected by the Rangers plc board in favour of Ashley’s short term fix of loans – it was in the form of a debt and equity mix that would have lent the club sufficient money to keep it going through the takeover process. Another problem for Sarver is that, taken together, the recent share purchases by King and the Three Bears – Douglas Park, George Letham and George Taylor – constitute a little over 34% of Rangers’ stock. They have been pledged support by other disenchanted investors and have also been allocated proxy votes. The King/Three Bears axis know that they can now call upon sufficient support to outdistance the Ashley/Easdale camp by a significant margin. Having got themselves into such a favourable position they are not inclined to stand aside for Sarver although they have, as would be expected, let it be known that they will happily have him on board as a like-minded investor. This is well short of Sarver’s original intent of attaining complete control of Rangers before looking elsewhere to acquire other football interests. One obvious objection to that as a long-term strategy is that it would infringe the same dual-ownership regulations that have prompted a disciplinary complaint against Ashley by the SFA. In any case, time is now the pressing enemy of all the contending parties. If the club runs out of cash and is forced to enter administration for the second time in three years Rangers will be consigned to a fourth successive season in the lower leagues – a prospect feared by the Scottish football authorities as well as other clubs who would benefit financially from their return to the top tier, as a consequence of better sponsorship and broadcast deals than are currently available. Rangers are again teetering on the edge of a financial precipice as the principal personalities jostle on the brink to establish who will be thrust over to the rocks below - and who will be left standing to inherit whatever remains of this once immensely proud and respected club.
Posted on: Mon, 05 Jan 2015 14:41:22 +0000
Trending Topics
Recently Viewed Topics
© 2015