In the event of Rangers facing financial Armageddon after the resumption of their HMRC tax hearing a quick – very quick – recovery scenario is available to them. At any point during next month’s hearing they may consider their position is no longer tenable and, unable to meet the tax bill, a new company could be formed which attempts a prepack administration.
A prepack offer from a new company, for example, Rangers Newco FC Ltd, would offer an administrator a deal for all assets of the club, including stadium and offer to meet outstanding player wages. Deals like this seldom offer unsecured creditors much but even a small percentage might realise more cash than the administrator would gamble on raising in an unstructured sale.
In such circumstances, the administrator could accept as little as £4m for the unsecured creditors.
In normal business Rangers Newco FC Ltd would begin trading and this would be the end of the story but football is not normal business. Rangers Newco FC would own a stadium and would employ some footballers but they would not be part of any league structure. They would need to apply for membership to the Scottish Football League or Scottish Premier League.
In this scenario, the death of Rangers Football Club would leave a vacancy in the SPL, presenting several financial, logistical and sporting challenges. Without Rangers, the league would have to invalidate all this season’s results involving the club, one team would be without a game each weekend for the rest of the season, current TV contracts and sponsorship deals could be jeopardised, while future contracts would be worth a fraction of their current values.
Every team in the league would have to downsize and some would have to win fresh support from their bankers, which may or may not be forthcoming.
There is, of course, a resolution to this problem.
Rangers Newco FC Ltd could present an offer to the SPL. The new company, with its stadium and thousands of potential supporters, could take the obligatory 10 point punishment for going into administration and adopt the place of Rangers FC, complete their fixtures and allow every other team in the league to fulfil commercial obligations.
If these events took place before Christmas, Rangers Newco FC could be debt-free and signing players in January to enhance their league challenge.
To force the deal through, Rangers Newco FC would require 10 of the remaining 11 SPL clubs to vote in their favour. If any two clubs stand against them, they would have to apply for membership of the Scottish Football League, but, having researched this story for several days, I expect Rangers Newco FC Ltd would get enough support to pick-up the place of the defunct Rangers FC.
Any natural sympathies towards Rangers aside (which will not exist in all places), money talks and, apart from Celtic, this league is neck-deep in debt. Celtic might be in a position to survive Rangers failing but it would cost our club tens of millions.
Crucially, if the other SPL clubs back Rangers Newco FC, they create a template for a snap recovery from their own troubles. Instead of repaying your debts, simply get yourself into a safe league position, ditch the company, prepack and start again with a clean sheet.
This would create a clear incentive to stiff creditors. While the banks will get wise and not offer unsecured facilities in future, HMRC and small traders are likely to become perennial fall guys. Why would any mid-table team pay millions in tax, rates and policing bills, when they have a sporting incentive to ditch creditors without punitive penalty, freeing income streams to buy football bling in the next transfer window?
This would make a mockery of the Uefa predident Michele Platini’s Financial Fair Play initiative and make our league the poster-boy for Financial Doping.
Scottish football will be mortally wounded if it were to parachute a club straight into the upper echelons of the game while establishing a blueprint for the abandonment of creditors.
It is incumbent on all who care about the game, in Scotland and throughout the world, that we insist Scottish Premier League clubs do not allow a prepack company to phoenix into the shoes of a dead football club.
Celtic fans, as well as those from Aberdeen, Hibernian, Dundee United and St Johnstone, together with fans from Motherwell, who could become genuine championship contenders, and from those clubs who would avoid relegation if Rangers failed, must insist their club votes against any prepack company parachuting into the league.
The SFA executive must use whatever influence it can to prevent the name of Scottish football being brought into disrepute. Politicians, who either have, or aspire to have, tax raising responsibilities, must register their abhorrence that a self-serving oligopoly should attempt to vote themselves an escape from paying tax.
Fifa and Uefa must explain to the Scottish FA that the days of shady financial deals in football are gone.
Watch the media coverage of these events carefully. If and when the decision time comes, the case to acquiesce to Rangers Newco’s demands will be overwhelming. Sincere ‘impartial’ observers will do their upmost to convince us all we must do whatever necessary to save Rangers for the good of the Scottish game. Some voices will even tell you Celtic need Rangers Newco. Whatever part of my club is dependent on Rangers I am willing to lose.
Rangers-HMRC tax hearing resumes next month, when there is also a two week international break. The most important element of making a prepack offer succeed is to offer a fait accompli: ‘Here is a solution, you have no time and you have no alternative’.
Should Rangers go into administration, I believe this is a very, likely scenario. If you are a supporter of Celtic or any other club, make your views known.
Read issue 3 of CQN Magazine free online here or buy a print version at Magcloud.
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philvisreturns says:
27 October, 2011 at 23:25
*********************
I re read youre most excellent post in case there was any tory shit in there that I missed, lol
Good man and HH again
Cyber pint and half on its way to ye —————>
V
dirtymac says:
27 October, 2011 at 23:37
That’s the problem with these comps – next time their brought up is in one of CRC’s Friday night quizzes! :-)
Bourne
Thank you, it has been solitude, comfort and escapism in equal measures.
Sorry Phil
If you weren’t born a Celtic supporter you must leave CQN immediately..in fact I bet you’re a ..
Only jokin’ great post!
I married a Hun (well she actually has no interest in football/sport probably because her mum is a PE teacher.. Her mum however…is football mad – now 72 she still watches just about every game on Sky…anyhow, she had no real allegiance when i started ‘courting’ my now wife 26yr ago but had an anti-catholic/Celtic vibe, not uncommon in the Highlands..I’m pleased to report it only took about 2 year of my influence to completely transform her in to a Celtic mad believer..and most impressively a Hun hater.
Wife’s sister has started courting a Hun a few year ago…MIL can’t take to him..
Vmhan
I did, thank u.
TT
BT, wee Derryghirl has been on max does for yonks including a time on the patches…… she’s came off them all…. a wee rebel …. imagine being on that shit for 4/5 years?
Mind a wee half or two will help :!)
Is Wee Minny coming on Sat ?
V
HH
Huns wages due in the bank at midnight,
any news if this will happen ?
Cultsbhoy
You married a hun. So did I.
Yoda. We could be brothers.
MWD
Expectation management at the DR:
http://i44.tinypic.com/2eowvtz.jpg
Praecepta
i started with the pretext that all the clubs were OUT of meaningful Euro competition ,i.e. us last year and all the other clubs this year – my point was that , in any year , you could find half a dozen ‘so-called’ top teams who are not in Europe beyond september .
hamiltontim says:
27 October, 2011 at 23:46
Thoughts with u buddy
HH
Ah never Saw the Hibs game.
Ah Heard a Commentary of the Hibs Game.
Big Difference.
That being said..
On Saturday, we play the Hibs ,once more.
Hmmmmmmmmmmmm
Frankly, Ah am no too Sanguine ,regarading Ma Feelings,concerning the Result
of that upcoming Meeting.
In fact, if the truth be told, Ah am Filled wi’ Dread and Misgivings..
Noo.. if Ah has actually SAW that First Game, agin the Hibs, An wid
probably be mair confident aboot us getting the result which wid mak
me happy.. But.. like Ah jist told Ye.. Ah Didnae SEE that game.
Noo,if Someone.. who had Actually SEEN the Game agin the Hibs..
wid be kind enuff..
Tae give me whit they think aboot Celtic’s Chances of
Gieing Hibs a Doing at Celtic Park, Ah wid Appreciate it.
Kojo
Wondering.
vmhan
mini not coming this week…
im usually on a smaller dosage but gp upped them om Monday..
HamiltonTim (note the capital H and T)
My last attempt at a wee memory of why we are all here…Celtic
A Whisper in Paradise
Your whisper enticing, as clouds leave the skies
Your warmth so inviting, is calling me home
I turn to avoid you, but you won’t let me roam,
Your heart pulls me closer to my Paradise
CHORUS
El Paradiso, yes our Holy Ground,
When life has deserted it’s there will be found
My ashes upon the green grass in bliss
A breeze soft caressing, a heavenly kiss.
The days when you held me in your welcoming arms
Those nights of great drama when we dared to dream
Of hopes and of pride in Celtic our team
No one can replace your spirit or charms!
CHORUS………………
A choir calls softly then starts to resound
Of Walfrid’s great passion to feed starving souls
Those seeds he sowed then have flourished in shoals
Over St Patrick’s waters, on St Andrew’s ground.
CHORUS………………
Big Jock is awaiting with Jinky to greet
With Bobby and Ronnie a welcoming smile
Till then I’ll just wait at this stage for a while
Where magic was conjured from magical feet!
CHORUS
El Paradiso, yes our Holy Ground,
When life has deserted it’s there will be found
My ashes upon the green grass in bliss
A breeze soft caressing, a heavenly kiss.
Hail hail
Estadio
Alright sannabhoy hows u?
HH
In a pre-pack, the Adminstrator must be able to justify the proceeds received from the sale of the assets sold to Newco as fair value in all of the circumstances.
One of the reasons that pre-packs are distrusted is that the deal – the valuation of the assets to be transferred/sold to Newco – is agreed PRIOR to the Adminstrator being appointed. This of course creates an issue of transparency.
The Odd Nugget, aka MBBCW, is doing his very best to ramp up the debts owed by Rangers plc to Group Ltd in order that he has greater leverage in negotiating the deal with the Adminstrator that he himself will most likely appoint. The greater the sum owed by Rangers plc to Group Ltd, the more difficult it will be for an unsecured creditor to challenge the value of any disposals to Newco.
It is likely that the Adminstrator of choice has already been identified, that discussions have taken place, and valuations for certain assets considered. I suspect that by this time the broad terms of the asset transfer from Rangers plc to Group Ltd have already been defined and agreed in principle.
The end game for the Odd Nugget is ownership of the material assets of Rangers plc without investing any more cash than was required to settle the LBG debt in the first place. This means that Rangers plc are being charged credit card default level interest rates on the pld LBG loan, together with a miscellany of costs, fees and charges. Cost to Rangers is about £20,000 per day, compounding at 3% per month or thereabouts. The longer Rangers remain trading, the greater the debt grows.
I suspect that the original plan foresaw a Tax Case outcome by March, with the club’s cashflow meantime being supported by European football. Clearly missing out on Europe brings forward the point when Rangers plc run out of cash, and this now appears likely to occur well before March, with some suggesting the tipping point is imminent.
At the end of June 2010, the Directors of Rangers issued their Annual Report stating that the fair value of Rangers’ land and properties was £118,000,000. The value of the playing squad was given as £10,000,000.
In the interim, the property will have lost some value to depreciation, £3M being the charge for the previous year. Meanwhile, the value playing staff, while being reduced by the amortisation charge for the year of about £3M, has been bolstered by the values of the signings of Jelavic, Goin, Bocanegra and others. The longer contracts awarded to McGregor, Whittaker, Davis etc also adds instrinsic value to the company.
It is reasonable to estimate the value of the tangible (properties) and intangible (players) assets of Rangers, given the declarations in the last set of accounts, to be in excess of £130 Million.
Of course, around £55M of the property value is tied up in ‘revaluation’, a subjective value applied by a friendly surveyor to suit the circumstances of the previous regime and the cost to replace. Accordingly, a revised fair value of Rangers’ saleable assets is perhaps £75M, being the playing staff, the stadium, the training ground and any other heritable properties on the book after salient factors are applied.
Set against this is the Odd Nugget’s secured debt of £18M, plus interest, charges and fees over the last 6 months or so. A quick fag packet suggests that the debt has grown in the intervening period to around £25M, £30M max if they’re really ripping it. Evidently this is substantially less than the £75M we attribute to the value of property and players, but in a forced sale what is the realisable value of these assets? Is the £18M debt settlement, plus interest and charges applied in the interim, sufficient to get the core assets of Rangers plc netto?
Does the Odd Nugget have enough paper debt now to get the players and properties in exchange for the secured debt he is owed, or will he need to stretch it a little and perhaps compromise on the assets he takes? Or else put some cash in to make up the difference, cash being the last thing he’d be likely to put up.
Pre-pack looks like the favourite in this steeplechase. Do the odds stack up yet though?
BT , my sympathy’s . had a couple of ops 16 years ago on my back and still feel it occasionally.
TT , hoopy birthday. hope it was agood’un
vmhan , long time , no see. when you next up ? Bundoranbhoy wants to organise a wee soiree – your company would be appreciated.
hamiltontim
===========
Thoughts are with you mate. I lost my Dad a year ago in one week’s time. It’s hard but I concentrate on the good times, the laughs we had and we had many. I talk about my Dad as often as I can, as it helps me.
Reading your posts, I know you’ll do your Dad proud with your speech.
Hail Hail
btw
I hear from round the back that life at Rangers will be Deloitteful in due course.
TT de nada amigo!
The 50 posts per page has thrown me a wee bit as you can only search on a page , a few hours after posting its a pain to track back, so never knew if you got it, anyway all good.
HH to you and the family.
Vinny
Bundoran
Thanks mate. Keep your prayers for next Thursday if you would I’ll need them :)
Bundoran , talk o the de’il ,ma brother – not too bad. I see MWD and EN are trying to establish familial ties – don’t they know? we’re all brithers on here .
Sometimes we get on great , other times we’re taking a swing at each other .
Looking forward to meeting up again – see if you can ‘round’ any of those FB’s up for a night on the town .
Paul67.
you have mail.
Can there be a pre pack if league registration is still unresolved?
Can you have a conditional pre pack?
TT
Happy Birthday shun!
I’m doing a Pablo (learned it from Pabbers)
http://www.youtube.com/watch?v=HgqD826HGuI
V
HH
Estadio
Magic, you’ve now made me cry :)
Thank you for that.
Night all
and
Happy birthday, Tiny Tim
just in time
hamiltontim says:
27 October, 2011 at 23:54
No probs buddy
Will be in my prayers always a friend on here to chat when needed too
Hail hail YNWA
HT , my condolences as well, I pray for our lord to grant you the strength to get through these times , the wisdom to appreciate everything your da gave to you and the courage to reach out to friends when you need support.
Take care and may your father RIP.
Sanna
Estadio,
I’d like to hear that on a tyoon… have u got one?
tick tock………whyte meeting lawyers tonight…!!…wages due tonight…!!!
Mmmmmmmmmmm.????………tick tock….?????
Someone needs to put them out of their misery….
Spongebhoy
Just reading your moniker makes me smile, cheers mate.
MWD
…and you have the neck to accuse me of being a hun lover… : ) !!
Great post Philvis!
Not a whiif of the “dangerously glib” (copyright Auldheid) Philvis/Bond wannabe!
Good health to you!
DarnTheHairWeCare!
hamiltontim says:
27 October, 2011 at 23:54
I lost my dad 4 years ago, its hard but gets easier. Good friends n family help
YNWA
The Battered Bunnet says:
27 October, 2011 at 23:54
From their website. Obviously huns.
‘Glaswegians are passionate about sport and in particular football. The city’s two great rival clubs, Rangers and Celtic, are perennial leaders of the Scottish league.’
http://careers.deloitte.com/united-kingdom/students/offices.aspx?OfficeID=176
Bejayzus
Kojo
I was behind the goal last night, so it’s not always the best perspective, but the first half was Ki and Kayal in the middle, with Ledley and Forrest narrow wider of them. Forster, as is his wont, blootered the ball up the park at most opportunities and the ball didn’t stick to Hooper and Stokes (they lost most aerial battles). We were also defensively open and the turning point was a terrific 1on1 save from Forster before half-time. After half-time, we closed down better, put Ki on the left and Ledley in the middle. This to me made a big difference – Ledley’s an unsung scrapper (and accurate passer!), while Ki competed for Forster’s punts. Better movement and better pressing and a cracking second half from Forrest. Reports have said that NL had a few things to say at half-time – one wonders why we can’t start the first half the way we started the second. As usual, if we fight from the start, and play home-match high-tempo, we will be fine. Hibernian have two decent strikers in O’Connor and Griffiths, but are overall not great – as with last night, if they lose one, they lose more. We showed sterner stuff.