Assuming Dave King has more than 50% of the shareholding in newco Rangers, what does Mike Ashley do knowing he will not be in charge of the club after an EGM in March?
Take the defeat on one of his chins, let King’s lawyers loose on the merchandising and other deals he’s paid for and put the whole thing down to experience?
Well, possibly, but he has other options.
Ashley has yet to loan the club the money required to pay this month’s wages. He could simply not transfer the cash, but in this event he will expect King to step in.
King with his accomplices, and others, have recently offered to loan the club money, albeit with strings attached. If King truly has the enough votes in the bag to secure a majority, it’s likely they will loan the club enough cash to get beyond the EMG, without conditions attached. The directors would have no option but to accept this cash, pay the bills and cede control in due course. Ashley is owed £3m, repayable in April, for loans made late last year, so King et al will need to find cash to cover that in their ‘warchest’.
This is likely to be close to King’s narrative. He will not have called the EGM unless the cash is available to get the club over the line this season. I’m not prepared to countenance the possibility that he’s called it certain in the knowledge he will fall short.
I’ve always thought some kind of Grand Coalition, between Ashley and a collection of local legitimate businessmen would be the most effective forward plan, but Ashley has been so maligned by PR ‘close to King’ that this doesn’t seem to happening. Ashley will either have to take his chance of retaining merchandising, stadium advertising and future shirt sponsorship rights, or make his play now.
It’s worth noting that the reign of the Easdales, and chairman Somers, will end in the event King gains control; they are a busted flush unless they can manoeuver Ashley into an unassailable position.
So will Ashley pack his trunk and run away to join another circus? Don’t bet on it. Between now and the morning of the EGM, instead of loaning an already highly-levereged club, he could buy and leaseback its properties. This would give him enough leverage to look after his medium-term commercial interests, and exercise complete control in the long-term.
None of this even needs to happen under the current board. He can loan the club the £10m as expected, with covenants which are, to say the least, difficult to achieve. The cost of failure to meet one of these covenants would allow the Ashley to call-in his securities (the stadium).
Ashley can afford to lose all the cash he’s invested already, and all the his newco-related commercial contracts, but he cannot and will not lose his reputation as an uncompromising operator. Last week I said ‘Never play poker with a billionaire’. Whether you are a shopping centre owner, a sports goods giant, or an aspiring football club owner. These idiots should know thier opponent.
Tickets are now on sale for CQN11, our St Patrick’s Day dinner event on Friday 13 March at the Kerrydale Suite, Celtic Park. We’re hoping to raise money for Mary’s Meals to build a kitchen at Chibwata Primary School for their 909 pupils. As well as the dinner there will be singers and dancing, it’ll be a great night.
Email me if you want tickets reserved, celticquicknews@gmail.com , or you can book tickets or tables directly at the bottom of this page.
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Accies have always been a good wee club
Used to go when hoops werent playing
Pity there fan base average age is about 80.
: > )
Can someone post (cutnpaste) the Sunday herald story on the crumbling of the Murray empire please?
Can any of our legal eagles confirm that one is debarred from being a company director if they were involved in an insolvency event in a company in which they were a director up to 5years ago. Is this UK company law and would supersede any football law? Hail Hail Hebcelt hence the Lion King and Murray have no chance regardless of what the SFA/SPFL say
I asked before.How is it possible for King and Murray to get onto the Huns board?.These are Stock Market rules,are they not?.
The question of “Fit and proper”well,if the SFA stopped Ashley because of rules,how can they let King and Murray take power?.
PL is on the SFA panel.Lets see.
BAWSMAN
AWE NAW posted it unaltered on the last thread at 1321.
Paul67
“Take the defeat on one of his chins, let King’s lawyers loose on the merchandising and other deals he’s paid for and put the whole thing down to experience?
Well, possibly, but he has other options.”
As you say losing a few million on a wee punt would not bother MA
Losing face, or any suggestion of weakness would cut him deeply
That Baloo King Bear better hold on tight to that particular tiger’s tail
estorilbhoy
14:39 on 18 January, 2015
Email sent
1st to any other Scottish club since I thanked Raith & their Chairman for his courage and leadership.
Harry Boe
Welcome to the madhouse
I think you will fit in just fine :))))))))))))))
BOBBY MURDOCH’S CURLED-UP WINKLEPICKERS
15:25 on
18 January, 2015
ta muchly BMCUWP
Turkeybhoy,
Same club is company law and they are flaunting that
Turkeybhoy 15:24
Did they stop Ashley because of the rules, or did they stop him because they wanted King and the bears to own the club/company/whatever?
Bawsman,
“I asked Darryl Broadfoot (the SFA communications Director) about King and the “fit and proper person” thing………He advises me the “fit and proper person” thing is a myth, there is no such thing.”
Then his is very wrong.
Article 10 of the SFA Articles states that every member must submt an annual return. As part of that they have to certify that every officer bearer, director and so on is ” is a fit and proper person to hold such position within Association Football”.
The rest of article 10 lays out a number of issues that may well lead to someone failing the test, including being bankrupt, disqualified as a director, was a director of a club that previously went through an insolvency event, etc,
In terms of Dave King, it also lists ” he has been convicted of (a) an offence liable to imprisonment of two years or over, (b) corruption or (c) fraud within the last 10 years;”
Note that it does not limits these convictions to the UK …
Estorilbhoy
email sent to the Accies……
bawsman
15:21 on 18 January, 2015
Can someone post (cutnpaste) the Sunday herald story on the crumbling of the Murray empire please?
————————————————-
I hope you’re not dyslexic! ;-)
C’mon Citeh!
betcoveredcsc
glasstwothirdsfull
15:31 on 18 January, 2015
Turkeybhoy 15:24
Did they stop Ashley because of the rules, or did they stop him because they wanted King and the bears to own the club/company/whatever?
>>>>
Nail head hit squarely…….the whole thing is a joke, and the SFA is now a joke also ……. Won’t be long now until this all comes to a head
bawsman – completely agree about him being a cutnpaste
estorilbhoy,
Cheers for posting Hamiltons details, email sent….not to you HT :)
Bawsman 15:21
Awe Naw posted it on the previous article – between 13:00 and 13:30ish.
Estorilbhoy,
Thanks for that, I’ve sent them an email too. It was lovely, really uplifting.
Hail,Hail.
Batsman
awe_naw_no_annoni_oan_anaw_noo
13:21 on 18 January, 2015
Herald Scotland
Home > Business > Company News
The Fall of the House of Murray
Published on 18 January 2015
As tycoon David Murray’s once-thriving business empire folds with a barely audible whimper, Ian Fraser picks apart the disastrous sequence of seemingly limitless borrowing and bad decisions that precipitated the downfall
Sir David Murray’s metals-to-property conglomerate Murray International Holdings (MIH) died last week, going out not with a bang but a whimper.
MIH and eight subsidiary companies – Premier Property Group, PPG Land, Premier Burrell, GM Mining, Murray Group Holdings, Murray Group Management, Murray Outsourcing and MMH NSS – are to be liquidated by Deloitte.
The insolvency practitioners will be seeking to retrieve as much cash as they can from the firms’ assets and debtors before shutting down the companies for good.
Since the credit crisis blew a massive hole in Murray’s business plans six years ago, his bank, Lloyds – which completed its disastrous acquisition of HBOS in January 2009 – appears to have treated him with kid gloves.
It had few qualms about pulling the plug on other HBOS customers who had built up massive debts with HBOS, such as John Kennedy’s Kenmore, Jonathon Milne’s FM Developments and Ken Ross’s Elphinstone Group.
But Lloyds was prepared to give Murray five-and-a-half years to disentangle and dismantle as much as he could of his business empire, as well allowing Murray Capital, a new private concern of Murray and his son, David junior, to cherry-pick some of his most cherished assets.
The reason for this unusual leniency from Lloyds was ascribed to Murray’s tough negotiation skills, and highlighting the number of dependent Scots employees in a diverse group.
In his pomp in the 1990s and early 2000s, David Murray was viewed as one of Scotland’s most successful entrepreneurs. He caught the eye of Bank of Scotland’s former treasurer and managing director Gavin Masterton, and the bank first lent Murray money in 1981.
Bank of Scotland went on to lend him the entire £6 million he needed to buy Rangers FC in 1988. By 2008, as part of HBOS, it had provided him with £900 million of debt to bankroll his wide-ranging business operations, which once encompassed commercial property, coal mining, metals trading and football. This was despite the fact that, even at its peak, the turnover of Murray’s group holding company never exceeded £550m.
HBOS senior bankers including chief executive of corporate banking Peter Cummings and the late Ian Robertson, managing director of corporate banking, gave Murray what amounted to an open cheque book.
Together, Murray and HBOS formed a complex web of joint-venture companies into which hundreds of millions of pounds of the bank’s money were poured. In most of these property deals, the bank was effectively lending up to 40% of the money to itself.
Robertson, nicknamed “Robbo”, was infamous for “Robbo rollovers” – deals by which the bank rolled over existing loans into newly created special purpose vehicles, effectively making bad debts disappear in a puff of smoke.
One banking analyst said: “Property assets that ought to have gone into insolvency, or into HBOS’s intensive-care unit – which would have required the bank to book a provision for bad debt – were instead rolled over.”
The roll-overs are said to have compounded Murray’s situation after the credit markets crashed, complicating his business empire’s problems. However, one of Murray’s more astute moves in the past decade was to sell his Murray International Metals business for £119m in 2005.
From the mid-2000s onwards, having witnessed the success that the likes of Sir Tom Hunter were having in commercial property, Murray massively boosted his group’s exposure to commercial real estate, snapping up provincial shopping centres and office buildings from Edinburgh to London.
The number of deals accelerated after Robbo’s successor, Ray Robertson, former head of real estate at Bank of Scotland Corporate, assumed day-to-day responsibility for his affairs at the bank. Both Robertsons had such faith in Murray and his Premier Property Group they seemed willing to lend millions with few questions asked, though it was the worst of times to be investing in and developing commercial properties.
Things started to go badly awry when Murray moved away from calculated risk-taking and started using HBOS’s loans for what looked more like reckless gambling. This coincided from 2005 onwards with the adoption of what HBOS insiders call “kamikaze lending to the great and the good” as it sought to grow its corporate loan book by some 20% per annum to compensate for a slowdown in other aspects of its business.
Even after property markets weakened, Murray seemed impervious to the risk of a property crash. One month after the global financial crisis started in August 2007, PPG had some £500m of development projects under way, including a 175,000sqft speculative office development in Glasgow’s Bothwell Street.
MIH was going to be able to defy economic gravity thanks to what Murray described in the 2008 annual report as “the breadth and depth of the group’s diversified portfolio and management team”.
When HBOS collapsed under the weight of massive bad debts and a short-sighted funding model, and the bank succumbed to Lloyds TSB in September 2008, the game was up for Murray.
He and other tycoons had been used to picking up the phone to HBOS and receiving hundreds of millions of pounds within hours. That all changed after Murray’s accounts were transferred to Lloyds’s non-core business support unit (BSU), whose goal is to maximise value from distressed borrowers.
One of the BSU’s first goals was to persuade Murray to offload Rangers, partly because the club was such an obvious drain on resources and partly as it was seen as a distraction for the hands-on Murray.
One ex-bank insider said Lloyds simply wanted out of football clubs: “Rangers was just soaking up cash. You can’t build a football business on overdrafts and borrowing, but that is what Murray seemed to be doing.”
Two-and-a-half years after ceasing to be Rangers’ chairman in October 2009, Murray sold his 85.3% equity stake in Rangers Football Club to Craig Whyte for £1. The club subsequently collapsed into chaos that continues to this day.
Lloyds continued to allow Murray to do two massive debt-for-equity swaps which, given the fact that MIH’s equity was by now as good as worthless, were essentially free gifts. The first, in April 2010, saw Lloyds write off £150m of debt in exchange for an additional 12% stake in the company.
Conditions included that Murray must liquidate three-quarters of MIH’s commercial property portfolio by 2015; introduce greater transparency into his business dealings; and stop using cross-guarantees, by which healthy and profitable parts of his empire were used to support more anaemic parts like Rangers. Such cross-support makes it more difficult to hive off businesses to third-party buyers.
A string of disposals, including that of oil and gas business Premier Hytemp and three shopping centres (sold for less than half their purchase price), followed. Unusually, in what seems to have been a sweetheart deal, the bank allowed Murray to personally buy back his private equity business Charlotte Ventures, partly because the assets within it, which included a stake in bus manufacturer Alexander Dennis, were seen as too high risk for the bank.
Murray said the purchase of the unit, later renamed Murray Capital, was “done arm’s length, at market value”. A second £118m debt-for-equity swap followed in March 2012, the negotiations for which are said to have been extended and heated.
Murray claimed the deal – which took the amount of debt that had effectively been written off by Lloyds to £268.5m – did not dilute the Murray family’s 70% voting power over MIH.
Talking about the winding-down of MIH, Murray said: “This has been a consensual approach with the bank, and it has been an orderly, managed process. It’s not been easy – it could have been easier to walk away and not do it – but it was decided with the lender that we would work this out, and we have.”
There are major assets which remain unsold, including Response, the call-centre business. It lost a contract with BSkyB, but has since won one for Scottish Power. In another unusual move, Lloyds let Murray and his family, through Murray Capital, buy Murray Estates, which owns about 1200 acres of prime development sites across Scotland’s central belt for just £13.9m. In addition to Murray Estates, Murray Capital also snapped up other unwanted MIH assets.
The Murray Estates portfolio includes a 13-acre site at Ratho Station on the western edge of Edinburgh, a 26-acre site near Edinburgh Airport, a 300-acre site at Torrance Park in North Lanarkshire, the 135-acre Kingdom Park site in Kirkcaldy and the 675-acre Garden District on greenbelt land adjacent to the Edinburgh City Bypass near Gogarburn.
The latter offers scope for a £1 billion development of 3500 homes, a showcase garden project called Calyx and a new community stadium. For many years Murray has been piecing together so-called “ransom strips” to the east of Edinburgh Airport’s approach road, with a view to galvanising a wider development project called the International Business Gateway.
Things are already moving fast for the some of Murray Estates’ development sites. In November, Fife Council granted planning permission for the construction of a £500m residential district at Kingdom Park over 20 years. The same month, pre-construction work got under way on a £60m mixed-use development for phase one of Torrance Park in Holytown.
In its 2013 annual report, MIH said funding difficulties meant it was unable to develop the Murray Estates sites itself. MIH added it had considered selling the land in a piecemeal fashion to other developers but then “received an unsolicited approach from the Murray family in spring 2013 to acquire the majority of assets in the portfolio of Murray Estates”.
A spokesman for Lloyds said the Murray Estates deal included an “anti-embarrassment clause” which enables the bank to secure a share of the upside should Murray Estates’ projects come good, but declined to give details.
The MIH 2013 accounts noted: “The transaction completed after protracted negotiations and was supported by advice from two independent firms of chartered surveyors … plus significant potential additional consideration based on profits realised over 10 years.”
Intriguingly, even though Murray Capital (formerly known as Charlotte Ventures) also banks with Lloyds, Murray made clear Lloyds did not fund the £13.9m acquisition. He added that the non-embarrassment clause is geared to enable the bank to get a bigger share of gains if projects are sold or developed quickly, saying: “It was put in place to stop us flipping things for a quick gain.”
Overall, Murray has been shown far greater leniency than other failed property tycoons after Lloyds/HBOS was bailed out and commercial property prices crashed. One ex-HBOS insider has suggested that it was because he was “one of the great and good, like Tom Farmer and Tom Hunter”.
All three have been knighted, with Murray receiving his – for services to business in Scotland – in June 2007. The source added: “Sir David never had the great fall, the humiliation that some of the other over-leveraged property tycoons were made to feel.”
His businesses’ outstanding debt to Lloyds stands at up to £346.7m, and the bank has, to date, written off £268.5m through debt-for-equity swaps, which suggests that the collapse of his business has left a £615m hole in Lloyds’s accounts, and that two-thirds of the money Murray’s businesses borrowed has been lost.
And because of the 2008 bailouts, it is effectively taxpayers who are picking up the tab. Meanwhile, he has walked away from the wreckage of his failed group with some of its most promising assets under his belt.
It is perhaps unsurprising that Murray presents the winding-up of his erstwhile business empire as a sort of triumph. Writing in the MIH 2013 accounts, he said: “In the prevailing economic conditions since 2009, the delivery of the numerous asset disposals and debt-reduction programme represents a significant achievement and a very credible performance.”
He said: “It’s not been without some casualties but we’ve done the best we could. The proceeds from the disposals have been optimised, enabling us to secure continued employment for more than 95% of the group’s 2008 workforce and minimising losses to other stakeholders and creditors. One of the reasons we have come through this as well as we have is that we had some prime assets and some good trading businesses. All the small creditors have been paid in full and everyone’s been paid their redundancy.”
Lloyds refused to comment “on the grounds of customer confidentiality”, but others might see Murray, along with bonus-crazed bankers in rescued banks, as the ultimate pet of the sugar daddy state.
Email sent. Well done the Accies!
Batsman = Bawsman
mighty tim supporting wee oscar
Good to see you posting you podium chaser, are you making CQN 11? HH
Fair play to Hamilton yesterday for the reception they gave wee jay enjoyed that better than the game itself..hail hail
the_huddle
That’s the get together I was meaning.
Dallas organises that, I believe and if it involves the UEFA listed refs, how far down the list will they have to go.
When you consider that even these guys have questionable competence, at least they have big game experience.
Embody know the phone code for .Luxembourg?
Luxembourg Country Code 352 Country Code LU – Country Codes countrycode.org/luxembourg EASY TO REMEMBER URL: ‘CountryCode.org/luxembourg’ for Luxembourg country code 352 country codes LU and Luxembourg phone number.
:)))))
Till later all
Doesn’t matter how much money Ashley has if his opponent is sitting with a royal flush.
Canamalar,
Of course there is no way that there will be a spare seat at our end and that there will be some sort of display that will be, by and large, ignored by the media.
What I tried to say that, if an empty Celtic end sent out a definite message, so, too, will a full Celtic end.
That message will say, no matter what, that the Celtic support missed this game and wanted it back.
Unfortunately.
lennon’s passion
Ashley has 30 odd days to do as he likes :)))
Thats what I would call a winning hand.
Sadly true
thomthethim for Oscar OK
15:51 on 18 January, 2015
the_huddle
That’s the get together I was meaning.
Dallas organises that, I believe and if it involves the UEFA listed refs, how far down the list will they have to go.
When you consider that even these guys have questionable competence, at least they have big game experience.
Embody know the phone code for .Luxembourg?
———–
Ahh right, the SFA had their refs break to Spain this past week. Forgot that Dallas would be involved in the UEFA one.
THOMTHETHIM
That there is hardly a mad scramble for tickets undermines the view that we are desperate to have them back.
Years ago,they would have been like gold dust.
67 heaven – thanks for the article
‘Two-and-a-half years after ceasing to be Rangers’ chairman in October 2009, Murray sold his 85.3% equity stake in Rangers Football Club to Craig Whyte for £1. The club subsequently collapsed into chaos that continues to this day.’
they still can’t admit that murray was the one who destroyed rangers – at least now they have a business man who is competent in charge though he couldn’t give a 4x for rangers. long may it continue, the longer they delude themselves the longer it’ll take a community club to get off the ground
for every £5 ponund …… what a joke ?
Bobby,
I think the demand is much higher than you think.
Tomthetim :
what it says is that we are Celtic supporters,if our team is playing we will be there.
“France or Spain it’s all the same”
Lennon’s passion
His opponent might have the flush, but what if Ashley’s got the toilet?
bobby murdoch’s curled-up winklepickers
16:01 on 18 January, 2015
Sevco tickets are like gold dust.