Rangers heading to administration?

[Zippy]

Deserves a thread of it's own...

http://www.heraldscotland.com/news/h...ngers-1.928574

Rangers’ banker has threatened to put the football club into administration in a dramatic intervention to tackle its mounting debts.



Lloyds Banking Group issued the ultimatum to the club’s shocked board as the only alternative after it initially rejected a “devastating” business plan based on swingeing cuts.

The Herald can today reveal the extent of the turmoil at Ibrox that has left Rangers under the control of its banker. Lloyds has placed Donald Muir, who helped rescue Northern Rock, on to the board as its representative.

It can also be revealed that Dave King, the Glasgow-born multi-millionaire and former investor in the club, now based in South Africa, is the leading contender to buy Rangers. He has opened negotiations but is having difficulties in striking a deal for the club.

It is believed the price the bank wants for Rangers is £30 million, equal to the club’s total debt.

Sources close to the club told The Herald last night: “The business plan from the bank will only do one thing – strangle the club slowly. A new owner is a must or else Rangers will be in dire straits on and off the pitch.

“The board tried to fight it as much as it could, but was told it would be placed into administration. The effects of the business plan will be devastating.

“Dave King wants to buy Rangers, and there are others expressing interest, but the bank wants a premium price of £1 for £1 in terms of the debt so nothing is imminent in terms of a deal.

“Its stance is surprising when, across the country, it is selling off assets at 25p, 30p or 40p to the pound in terms of debt.

“But because this is Rangers, it is obviously viewing it differently. Maybe it feels wealthy fans will let their hearts rule their heads, but all the while the club is now entering dangerous grounds.”

There is also interest from businessmen in the west of Scotland, who could combine to add their resources to those of Mr King, or make their own moves to buy Rangers.

Former chairman Sir David Murray, who remained majority shareholder after he stood down on August 26, is no longer involved in making key decisions.

Mr Muir, who was placed on the board of Rangers nine days ago at the bank’s insistence, is now effectively running the club.

He has been put in to oversee an immediate attempt to reduce debts, which would include the sale of star players over the coming months subject to the bank’s approval, with no replacements.

The bank’s plan was put to the Rangers board this month and shocked its members, including new chairman Alistair Johnston and chief executive Martin Bain, who believe the club has to be kept as attractive as possible to lure a new owner or investor.

The board refused to accept the business plan the bank put in front of them.

However, they were told that Rangers would be put into administration – which would probably allow the bank to recover its cash – if the plan was not accepted by Friday, October 16. Later that day, Mr Muir was confirmed as a board member.

In the aftermath of Saturday’s match against Hibernian, manager Walter Smith admitted the bank – which is 43% owned by the taxpayer and now controls the Bank of Scotland brand – was effectively in charge.

Lloyds Banking Group said at the weekend: “The bank continues to be very supportive of both the club and the board as they manage the business through the more difficult economic conditions currently prevailing.”

[Jaemi]

Where are all those hacks, that back in the 90's, critcised Celtic for not matching Rangers spending?

[stef4]

crying into their cornflakes, probably.

[XMachina]

In the same paper (p2 of the sports section) they state that potential owner Dave King is facing 322 counts of fraud and in 2006 he had his assets frozen by a S African court pending investigation. Is this the sort of guy that you'd want in charge of Rangers?

I don't think we'll get to the stage of points deduction for the ArrearRangers. Realistically, they only need to get to January and they could raise at least £5m in transfer fees that'll keep them going.

[Jaemi]

I read that the asking price for Rangers might be as low as 30Million.
Which is surprising really..

[Semprini]

Originally Posted by XMachina

Realistically, they only need to get to January and they could raise at least £5m in transfer fees that'll keep them going.

Unless the players choose not to sign contracts with other clubs.

[Jaemi]

Smith's already came out and said he'll work without a contract until this is sorted.
January is still a long, long way away.
Realistically they could have a new owner in charge by then.

[XMachina]

A thought here, surely it's in the banks wider interests for Rangers not to go to administration. Administration means they can forget about the CL next year and the accompanying windfall and a 10 point deduction and even less chance they'll recoup their money.

[Jaemi]

Upon further reading, the sale price for Rangers is 30Million then you take on their debt.

[Jaemi]

Plenty of these coming out of the woodwork now..

[XMachina]

They better hope that Real Madrid resume monitoring Nacho Novo's progress as that money'd come in handy.

[Jaemi]

It seems to me that Walter's little post match slip of the tongue has opened the flood gates, when it comes to reporting Rangers financial woes.
It would seem that everyone was afraid to speak up about it until Walter himself opened up and confirmed it.

Hugh Adams is adamant that Rangers do not have the customer base to improve their financial standing through merchandising. " Rangers’ so-called global appeal is a myth," he said. "When I was there, we did an exercise which involved asking 50,000 fans on the database to recommend a friend or a relative abroad.

"A big response was expected - some were even talking about getting 100,000 names - because everybody in Scotland seems to know somebody abroad.

"We got back 2,800 names and three-quarters of them didn’t know they had been nominated. It’s no surprise that Celtic are officially the best-supported football club in North America, with more official clubs than anybody else. The difference is the Irish connection.

"Despite the claims of international appeal, Rangers are, essentially, a West of Scotland club. They talk of supporters’ buses leaving from all parts of Scotland, but if you look closely, you’ll see there aren’t many from each area and they are not all full.

"Now the latest investor, Dave King from South Africa, will know that his £20million shareholding is worth around half, or even less, of what it was when he bought. No proper businessman will want to buy into that kind of loss."

"Now, the banks are well known for being a bit more tolerant of companies whose core business is a popular pursuit like football. But there is a limit to how far backwards they can bend to accommodate you.

"David Murray has always had an amazing persuasiveness when it comes to getting people to put money into his businesses, but the signs are that those sources have dried up.

[Rosco]

I'd be very surprised if the bank put Rangers into administration - i just don't think it's in the bank's best interests if they're looking for a buyer.

[Jaemi]

Aye.
As much as it's fun to gloat, and it is, I just don't see administration happening.


Although, the likelyhood of no buyer being found is pretty high.
It's going to take a lot of money to buy Rangers.
30Million, plus taking on the debt.
Then you've got to buy Murray's shares and I think he's in the hole somewhere in the 100's of millions, so he'll want some of that back.

[djtoast]

Rangers’ so-called global appeal is a myth

it interested me that in the nike superstore in toronto, there was a whole section devoted to Celtic merchandise - but not a whiff of their rivals' gear. similar story in new york not in the shops but in the streets last time i was there - must've seen a dozen celtic tops over the weekend. dunno if they were scots abroad but either way there's more awareness of the green and white strip.